Oracle caps new financing at $20 billion and targets positive cash flow

Oracle pledged on 28 October to raise no more than $20 billion in additional financing through fiscal 2030, split evenly between debt and equity, and forecast positive free cash flow in the second half of fiscal 2028. Chief financial officer Hilary Maxson set out the plan at the company’s investor day in Las Vegas, Reuters reported.

Maxson sets a $20 billion funding limit

Maxson said Oracle needed up to $20 billion more for the remainder of fiscal 2027. She described that sum as the last funding required for the current investment cycle, with half to come from borrowing and half from selling shares. The ceiling extends through fiscal 2030.

The commitment follows Oracle’s earlier plan to raise $40 billion through debt and equity in its current fiscal year. That plan included a $20 billion stock sale, which the company completed in the first quarter. Maxson’s latest figure covers funding still needed for the remainder of fiscal 2027.

At 31 August, Oracle had $125.34 billion in notes payable and other borrowings, against around $36.37 billion in cash and cash equivalents. The investor-day commitment places a limit on additional financing while the company continues to build the cloud capacity behind its AI contracts.

Oracle shares rose more than 8 per cent on the forecast, and other cloud stocks gained. The market reaction followed a plan that pairs a limit on outside funding with dates for lower capital spending and positive free cash flow.

Oracle’s cloud buildout and OpenAI backlog

Oracle expects capital spending to peak across fiscal 2027 and fiscal 2028 as it adds cloud capacity. It expects spending to decline in fiscal 2029, the year in which it forecasts free cash flow of more than $30 billion.

The company’s work with OpenAI, the loss-making creator of ChatGPT, has put hundreds of billions of dollars into Oracle’s cloud backlog. Building the data centres and other AI infrastructure needed to fulfil those contracts has led Oracle to rely heavily on borrowing and stock sales, Reuters reported.

OpenAI’s place in that backlog has also made Oracle’s reliance on one customer a focus for investors. Oracle does not have the revenue base of Microsoft or Amazon, the cloud competitors identified in the report, as it funds its expansion.

Oracle and OpenAI have also announced four products for enterprise computing, as AI Affairs previously reported. The investor-day figures concern the financing and cash-flow timetable for Oracle’s wider cloud buildout.

Oracle targets fiscal 2029 cash generation

Oracle projects a return to positive free cash flow during fiscal 2028’s second half. Its forecast calls for the figure to exceed $30 billion in fiscal 2029, alongside the planned decline in capital spending after two years at its expected peak.

Oracle also retained its fiscal 2027 targets: revenue exceeding $90 billion, with adjusted per-share earnings at $8.10. Those targets cover the first of the two fiscal years in which the company expects capital spending to peak.

Oracle forecast revenue of more than $225 billion for fiscal 2030. For fiscal 2030, it also sees its adjusted operating margin topping 40 per cent, with adjusted per-share earnings surpassing $21.