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As Oracle makes a 'will not do' pledge to worried investors; analysts say company is trying to show that there's a method to the madness in ...
The Times of India • • business
Key Points:
- Oracle has pledged not to raise more than $20 billion in additional financing for AI projects through fiscal 2030, aiming to reassure investors amid concerns over its heavy borrowing for data-center expansion.
- CFO Hilary Maxson stated that Oracle expects free cash flow to turn positive in the second half of fiscal 2028 and to exceed $30 billion by fiscal 2029 as capital spending declines.
- Oracle faces investor concerns due to its lack of steady cloud revenue streams compared to giants like Microsoft and Amazon, and its heavy reliance on OpenAI, which is still unprofitable.
- To manage cash needs, Oracle plans to reduce initial spending through vendor financing, hardware contributions from customers, and advance payments, aiming to stop external funding dependence by fiscal 2029.
- As of August 31, Oracle held $125.34 billion in debt with $36.37 billion in cash, and the company confirmed that the announced $20 billion funding, split evenly between debt and equity, will be the final amount needed for the current investment cycle.
