Oracle spent $55.7 billion on capital expenditures in fiscal 2026, consuming roughly 82.6% of its $67.4 billion in revenue and leaving negative free cash flow of $23.7 billion. Shares fell after hours once investors absorbed the scale of that spending, and Oracle's fiscal 2027 guidance points to even steeper outlays ahead.
Oracle reported fiscal year 2026 capital expenditures of $55.7 billion, consuming roughly 82.6% of its total revenue of $67.4 billion. That left the company with negative free cash flow of $23.7 billion, and shares declined in after-hours trading once the results were released on June 10. For every dollar Oracle brought in, it spent about 83 cents building out its infrastructure.
Revenue growth and a record backlog
Revenue climbed 17% year-over-year in fiscal 2026, a healthy pace for a company of Oracle's size. However, the $55.7 billion capex figure exceeded Oracle's own prior guidance of $50 billion.
Oracle has also amassed a record $638 billion in remaining performance obligations, the total value of contracts yet to be fulfilled, reflecting a wave of large AI deals moving into its pipeline. Customer prepayments for AI contracts alone total $75 billion, suggesting enterprise clients are backing Oracle's cloud strategy with real money.
Fiscal 2027 guidance goes further
The company's outlook for fiscal 2027 calls for total capital expenditures of up to $95 billion, a sharp jump from the year just completed. It expects $20 to $25 billion of that total to be reimbursed by customers, leaving a net outlay from Oracle's own coffers of about $70 billion, according to CFO Hilary Maxson. To finance the build-out, Oracle plans to raise about $40 billion through a combination of debt and equity, and Maxson said the remaining $70 billion represents the company's own capital contribution.
A cushion from customer prepayments
Negative free cash flow means Oracle is consuming cash rather than generating it from operations. As a result, it must tap debt and equity markets at a time when interest rates, while off their recent peaks, remain elevated by historical standards.
Still, the $75 billion in customer prepayments provides a cushion that skeptics might underweight, since those are commitments enterprises have already made rather than speculative contracts.
Source: Crypto Briefing
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