Oracle Targets $30B Free Cash Flow in FY29 After $23.7B Burn

Oracle said on 28 October 2026 that it expects free cash flow to turn positive in the second half of fiscal 2028 and set a target of at least $30 billion for fiscal 2029. Free cash flow was negative $23.7 billion in fiscal 2026, according to its annual results.

At its Investor Day in Las Vegas, Oracle also committed to limit additional capital raises through fiscal 2030 to $20 billion, split between $10 billion of equity and $10 billion of gross debt. By our arithmetic, going from negative $23.7 billion to positive $30 billion is a swing of about $54 billion.

Update, 29 Oct: Oracle’s shares closed 10.7% higher on the day of the investor day. In Yahoo Finance quote data, Oracle closed at $144.54 on 28 October, against $130.53 on 27 October. A CNBC headline read “Oracle stock pops 11% as long-term revenue forecast and clarity on financing ease debt concerns”, and a Reuters headline read “Oracle eases AI spending worries with plan to turn cash flow positive”. By our arithmetic, applying the $14.01 rise to the 3,023.7 million shares on the cover of Oracle’s September 10-Q, its market value rose by about $42 billion that day. ServiceNow’s shares moved the other way after its own results; see our piece on ServiceNow’s 20% drop.

Short explainer · Oracle brief

A vertical news Short narrated from the published headlines and opening lines of this piece and four related FourWeekMBA pieces on AI financing and Oracle.

Business Pill · Free Cash Flow

An evergreen Business Engineer explainer on free cash flow, the cash a company has left after capital expenditures. It explains the general idea only and does not discuss Oracle.

What Oracle Set Out

Oracle set a long-term outlook for fiscal 2030 of $225 billion or more in total revenue, which it said represents more than 35% compound annual growth from fiscal 2026, with a non-GAAP operating margin of 40% or more and non-GAAP earnings per share of $21 or more. Total revenue was $67.4 billion in fiscal 2026, Oracle said in June.

Oracle reaffirmed its fiscal 2027 outlook of at least $90 billion in total revenue and non-GAAP earnings per share of $8.10. Co-CEO Clay Magouryk, co-CEO Mike Sicilia and CFO Hilary Maxson presented at the event, according to the release.

By our arithmetic, $225 billion is about 3.3 times fiscal 2026 revenue of $67.4 billion.

What Was Posted on X

Wall St Engine posted that Oracle is projecting a nearly $54B turnaround in annual free cash flow over three years, now expects to turn free cash flow positive in the second half of FY28 and generate at least $30B in FY29, expects its AI data center spending to peak in FY27-FY28 before declining in FY29, and says that by FY29 its growth will be self-funded.

Walter Bloomberg posted that Oracle shares added to gains following the guidance, last up about 12.6%.

Techmeme, citing Reuters, reported that Oracle shares jumped more than 11% after it pledged to limit new financing to $20 billion through fiscal 2030.

Rohan Paul on X, 29 Oct, citing Oracle’s investor day slides: compute capacity from about 1GW (FY25) to about 3GW (FY26) to a planned about 10GW by FY28; RPO from $138B to $638B in a year; and, by his arithmetic from Oracle’s 1GW example of about $11B to $16B a year, roughly $77B to $112B a year for about 7GW at full ramp.

The Capex Peak and the Cash Flow Plan

Oracle said that following a period of peak capex in fiscal 2027 and fiscal 2028, capital expenditures are expected to step down in fiscal 2029, supporting positive free cash flow of at least $30 billion that year. It said growth will be self-funded beginning in fiscal 2029, with net debt to adjusted EBITDA below 3.5 times.

Oracle’s net debt measure includes borrowings, vendor financing and operating and finance lease liabilities, less cash and marketable securities, according to a footnote in the release.

In fiscal 2026 Oracle reported operating cash flow of $32.0 billion and capital expenditures of $55.7 billion. In the first quarter of fiscal 2027 alone, capital expenditures were $28.5 billion and free cash flow was negative $5.4 billion, according to its September results.

How Oracle Says It Will Fund the Cycle

Oracle committed to limiting additional funding raised in the capital markets for its fiscal 2027 to fiscal 2030 investment cycle to $20 billion, “currently expected to be $10 billion in equity and $10 billion in gross debt.” The release says the figure excludes refinancing of existing debt and comes in addition to the $20 billion at-the-market equity raise completed in the first quarter of fiscal 2027.

Oracle said vendor financing, customer-provided hardware and customer prepayments are expected to reduce upfront cash requirements through the transition to positive free cash flow. By our arithmetic, the completed $20 billion equity sale and the new $20 billion cap add up to $40 billion for the cycle.

For comparison, Oracle raised $43 billion in debt financing and $5 billion in equity financing in fiscal 2026, according to its June results release.

Connecting the Coverage

Oracle set out the targets a day after its AI World conference, where, as we reported, Oracle said it will rent out Google’s TPUs on its cloud from 2027. Its remaining performance obligations stood at $664 billion at the end of the first quarter of fiscal 2027, Oracle said in September.

The financing question runs across the sector. We tallied how leases for Anthropic and SpaceX hit $103B as AI credit strains, and how Meta and Microsoft lead $1.2T of leases not yet on the books. Separately, The Information reported this week that OpenAI plans to buy Google’s AI chips.

The Structural Read

As we read it, the new commitments are about funding rather than demand: Oracle capped additional capital raises at $20 billion through fiscal 2030 and said vendor financing, customer-provided hardware and customer prepayments are expected to reduce upfront cash requirements.

By our arithmetic, capital expenditures of $28.5 billion in the first quarter of fiscal 2027 already equal about half of the $55.7 billion Oracle spent in all of fiscal 2026, according to its results releases.

Oracle defines net debt to include vendor financing and operating and finance lease liabilities, so its target of net debt below 3.5 times adjusted EBITDA in fiscal 2029 counts more than borrowings, according to a footnote in the release.

Three Implications

FOR FUNDING Oracle said its additional capital raises through fiscal 2030 will be limited to $20 billion, excluding refinancing of existing debt, currently expected to be split between $10 billion of equity and $10 billion of gross debt.

FOR LEVERAGE Oracle said net debt to adjusted EBITDA will be below 3.5 times in fiscal 2029, and that its capital allocation priorities remain investment-grade credit ratings, paying a dividend and funding growth.

FOR THE BACKLOG Oracle said in September that it booked more than $30 billion of additional AI cloud contracts in the first quarter of fiscal 2027, taking remaining performance obligations to $664 billion.

The Business Engineer Lens

This story maps onto the Business Engineer framework The AI Capex Map.

The framework argues: “This is not a continuation of the cloud capex cycle.” It describes the subject of its analysis as the financing: how the money flows, where it cracks, what it buys and who can absorb it.

Oracle’s Investor Day put numbers on its own part of that question: a capex peak in fiscal 2027 and fiscal 2028, a $20 billion cap on additional capital raises and a fiscal 2029 free cash flow target. The framework does not discuss these Oracle targets.

What Is Not Established

The release does not give a capital expenditure figure for fiscal 2027, fiscal 2028 or fiscal 2029, and it does not give a revenue figure for fiscal 2028 or fiscal 2029. The release does not name any customer. The targets are forward-looking statements, and the release lists risks including Oracle’s ability to secure and manage data center capacity.

The Bottom Line

Oracle set a fiscal 2029 free cash flow target of at least $30 billion, after negative $23.7 billion in fiscal 2026, and said capex will peak in fiscal 2027 and fiscal 2028. It capped additional capital raises through fiscal 2030 at $20 billion, on top of a $20 billion equity sale already completed, and set a fiscal 2030 revenue outlook of $225 billion or more.