Oracle Sets Date For Positive Free Cash Flow And Caps New Funding At $20 Billion
Oracle targets $225 billion or more in fiscal 2030 revenue and positive free cash flow in the second half of fiscal 2028.
Oracle said free cash flow should turn positive in the second half of fiscal 2028 and reach at least $30 billion in fiscal 2029, as it capped new capital-markets funding through fiscal 2030 at $20 billion. Management laid out the plan at its Investor Day in Las Vegas, according to an 8-K filed Wednesday.
A fiscal 2030 revenue target
Oracle, which sells cloud applications, databases and cloud infrastructure to businesses, set a fiscal 2030 outlook of $225 billion or more in total revenue, more than 35% compound annual growth from fiscal 2026. It also targets an adjusted operating margin of 40% or better and adjusted earnings per share of $21 or more.
Co-CEOs Clay Magouryk and Mike Sicilia and CFO Hilary Maxson presented the plan. The company said it expects strong profitability and free cash flow from each of its three business models.
It reaffirmed its fiscal 2027 outlook for total revenue of at least $90 billion and adjusted earnings per share of $8.10.
Funding the build-out
Capital spending is expected to peak in fiscal 2027 and 2028, then step down in fiscal 2029, which supports the free cash flow target of at least $30 billion that year.
Oracle committed to limit additional capital-markets funding for its fiscal 2027-2030 investment cycle to $20 billion, currently expected as $10 billion in equity and $10 billion in gross debt. That excludes refinancing of existing debt and comes on top of the $20 billion at-the-market equity raise completed in the first quarter of fiscal 2027.
Vendor financing, customer-provided hardware and customer prepayments are expected to reduce upfront cash needs until free cash flow turns positive. Oracle said growth will be self-funded from fiscal 2029, when net debt to adjusted EBITDA should be below 3.5 times. Its priorities remain investment-grade credit ratings, a dividend and funding growth.
Shares up 8.62% on the day
Oracle shares rose 8.62% to $141.78 in Wednesday trading, from a prior close of $130.53.
Before the event, RBC Capital Markets said it wanted timelines for AI infrastructure margins to stabilize and a clearer path to better free cash flow conversion amid elevated capital spending.
The fiscal 2027 outlook of at least $90 billion in revenue and $8.10 in adjusted earnings per share is the first benchmark for the spending plan.
