Oracle’s RPO Soars 438% to $523B as Cash Flow Sinks Negative $13B
Oracle’s fiscal Q3 is due March 10, with consensus at $1.70 EPS on $16.92B revenue after missing estimates in eight of the last ten quarters. RPO jumped 438% to $523B as free cash flow fell negative $13B, driving plans for $50B raise and thousands of job cuts for AI data centers.
1. Q3 Earnings Preview
Oracle will report fiscal third-quarter results on March 10 after the market close, with analysts expecting $1.70 per share in adjusted earnings on $16.92 billion in revenue. The company has missed revenue estimates in eight of the last ten quarters, raising concerns about its growth trajectory.
2. Performance Obligations Surge
Remaining performance obligations rose 438% year-over-year to $523 billion in the last quarter, exceeding forecasts and indicating strong contracted bookings. Stakeholders are focused on the timing of converting these obligations into recognized revenue amid substantial capital deployment.
3. Cash Flow and Financing Plans
Oracle posted negative $13 billion in free cash flow last quarter, driven by extensive AI data center investments. To fund its infrastructure buildout, the company plans up to $50 billion in debt and equity financing and will cut thousands of jobs to preserve liquidity.
4. Texas Data Center Expansion Cancellation
Oracle and OpenAI have ended plans for new AI data center expansions in Texas, reflecting a reassessment of capital allocation and strategic priorities amid cash constraints and evolving partnership dynamics.