Oracle's Capital Budget More Than Doubles Operating Cash Flow; Q1 Report Due Thursday
Editorial responsibility
- No named human review is recorded for this page.
- Source reporting is collected, normalized, translated or condensed automatically when needed.
- Automatically published source-backed update
Oracle (NYSE: ORCL) is set to report its fiscal first-quarter results on Thursday, September 10, 2026. The article, authored by Daniel Sparks of The Motley Fool, highlights that Oracle's capital expenditure plan for fiscal 2027 is approximately $70 billion in net cash outlay, more than double the $32 billion in operating cash flow the business generated in fiscal 2026. CFO Hilary Maxson outlined the spending plan on the June earnings call, noting that customer prepayments could bring reported capital expenditures to $90-$95 billion. To bridge the gap, Oracle expects to raise about $40 billion through debt and equity in fiscal 2027, including an at-the-market stock program of up to $20 billion. The company spent $55.7 billion on capital expenditures in fiscal 2026, resulting in negative free cash flow of $23.7 billion. The heavy spending is driven by growth in cloud infrastructure revenue, which rose 77% to $18.1 billion in fiscal 2026, as Oracle builds data centers to support AI contracts. The article notes that borrowing adds interest costs and selling stock dilutes existing shareholders. Oracle's stock has rallied over 10% in the past week to around $162, still far below its record high of $345.72.
Source report
Daniel Sparks, The Motley Fool Wed, September 9, 2026 at 3:24 PM PDT | 5 min read
- ORCL: -5.38%
- NVDA: -2.37%
Oracle (NYSE: ORCL) is set to report its fiscal first-quarter results on Thursday, Sept. 10, after market close. The tech company's shares have rallied into the report, climbing more than 10% over the past week to approximately $162 as of this writing. Even after that run, the stock would need to more than double to return to its record high of $345.72.
Most attention on Thursday will likely focus on revenue and the company's artificial intelligence (AI) contracts. However, the line I'll be reading first is capital expenditures — and, right below it, how Oracle is paying for them.
How Big Is the Gap?
On Oracle's June earnings call, Chief Financial Officer Hilary Maxson laid out the spending plan. Oracle expects a net cash outlay of approximately $70 billion for capital expenditures in fiscal 2027, which runs through next May. Customer prepayments and timing effects should add another $20 billion to $25 billion on top, meaning the capital expenditures Oracle reports could reach $90 billion to $95 billion. The $70 billion, however, is the cash Oracle itself expects to pay out, and it's the figure I'll use here.
Now compare that against what the business generates. Operating cash flow climbed 54% in fiscal 2026, which ended this past May, to a record $32 billion. Growth like that is impressive.
But Oracle spent $55.7 billion on capital expenditures in fiscal 2026, up 162% from the $21.2 billion it spent in fiscal 2025. The result was free cash flow of negative $23.7 billion. And the fiscal 2027 plan steps spending up again.
To be fair, the headline comparison mixes two periods: the $70 billion is a forward guide for fiscal 2027, while the $32 billion is what fiscal 2026 delivered. That mismatch, however, is the point.
Even if operating cash flow grew another 54% this year, it would land near $49 billion — still well short of the capital budget. On this net basis, Oracle plans to spend more than twice the cash its business produced last year.
Borrowed Money and New Shares
Where does the rest come from? Oracle expects to raise approximately $40 billion of debt and equity in fiscal 2027, Maxson said on the call.
This includes an at-the-market program the company announced in February, which allows Oracle to sell up to $20 billion of new stock over time at market prices.
The $40 billion would be new money, on top of what Oracle has already borrowed. The company issued $43 billion of senior notes in fiscal 2026, and as of May 31, it had not sold any shares under the new stock program.
Neither tool is free. Borrowing adds interest costs, and selling stock spreads future profits across more shares.
Of course, management has its reasons. Oracle's cloud infrastructure revenue grew 77% in fiscal 2026, to $18.1 billion, and the company is building the data centers its AI contracts will require.
Source
Yahoo FinanceWestern