Overview
- Oracle reported Thursday that remaining performance obligations, its contracted future revenue backlog, surged to $638 billion driven largely by large‑scale AI deals and customer prepayments for hardware.
- Cloud momentum was strong in the quarter with total revenue up 21% and Oracle Cloud Infrastructure revenue rising roughly 93% to about $5.8 billion.
- Management disclosed a steep increase in capital plans, guiding about $70 billion in net capex for fiscal 2027 and citing gross figures up to roughly $95 billion that include potential customer prepayments.
- To fund the buildout, Oracle said it will raise about $40 billion in debt and equity after already securing roughly $43 billion in debt and $5 billion in equity in the past year, a move that helped produce roughly negative $23.7 billion in free cash flow for the fiscal year.
- Investors reacted sharply with shares falling about 7–13% after the report and analysts highlighted key risks to watch: timing and pace of backlog conversion into revenue, concentration of much of the RPO in an OpenAI agreement, and execution and credit stress from the rapid data‑center expansion.