Quick overview

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 Oracle raised its FY2027 revenue outlook to $90 billion and non-GAAP EPS guidance to $8.05, forecasting 27% to 29% revenue growth for the upcoming Q1

Capital expenditure (CapEx) has skyrocketed because Oracle is building out massive data centers to support AI workloads as fast as humanly possible. This resulted in a negative free cash flow of $23.7 billion for the fiscal year.

Oracle Cloud Infrastructure (OCI) revenue surged 93% year-over-year to $5.8 billion in Q4 alone. Tech giants and AI companies (like OpenAI, xAI, and Meta) are aggressively buying up Oracle’s cloud capacity.

 Oracle’s Remaining Performance Obligations (RPO)—essentially contracted revenue waiting to be recognized—climbed to a staggering $638 billion (up 363% YoY).

 Gross margins took a noticeable hit in Q4 due to accelerated infrastructure ramp-up costs. The market reacted nervously to this, causing the stock to pull back following the announcement.

 To fund this relentless build-out, Oracle raised $43 billion in debt financing over the past year. Its Net Debt-to-EBITDA ratio sits near 3.4x, which is on the higher side for mega-cap tech.

Oracle is no longer the slow-growing legacy database company it was a few years ago. It is operating like a high-growth AI infrastructure play. The revenue pipeline ($638B RPO) provides incredible visibility for the next few years, but the business is temporarily burning cash and accumulating debt to capture this market share.