Oracle Plans $45–50B Equity Raise as $21.2B Capex Drives Negative Cash Flow
Oracle’s $520 billion enterprise value faces $22.3 billion operating cash flow but FY2025 capex of $21.2 billion drove free cash flow to negative $394 million. It plans $45–50 billion in equity-linked financing, holds $523 billion in performance obligations and targets $15–20 billion free cash flow by FY2028.
1. Valuation and Cash Flow Pressure
Oracle’s enterprise value of about $520 billion and net debt around $108 billion stand against trailing operating cash flow of $22.3 billion, but FY2025 capital expenditures surged to $21.2 billion, resulting in a free cash flow shortfall of $394 million.
2. Equity-Linked Financing Plan
Management is considering raising $45–50 billion through common stock issuances and leveraged bonds, which would increase debt-to-equity above the current 4.33× level, potentially diluting existing shareholders and altering the company’s capital structure.
3. AI and Cloud Growth Outlook
Q2 FY2026 GPU-related revenue jumped 177% while cloud infrastructure sales grew 68% to $4.1 billion, and remaining performance obligations reached $523 billion (438% year-over-year increase), with an estimated $172 billion rolling into revenues within 12 months.