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At its Investor Day, Oracle laid out a computing capacity expansion roadmap, planning to increase from about 1GW in FY25 to about 3GW in FY26, and to reach about 10GW by FY28. Its remaining performance obligations grew from $138B at the end of FY25 to $638B at the end of FY26, adding about $500B in contracted business in one year. Based on Oracle's own estimate of roughly $11B to $16B in annual revenue per 1GW at full capacity, about 7GW corresponds to annual revenue of roughly $77B to $112B. Subsequently, Oracle CFO Hilary Maxson said at Investor Day that free cash flow will turn positive in the second half of fiscal 2028, provided that capital expenditures peak in fiscal 2027 and 2028 and then decline and that new capacity begins generating revenue; the company also expects free cash flow of at least $30 billion in fiscal 2029.
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Oct 29
Rohan Paul
Oracle plans to increase computing capacity to approximately 10GW within three years, with AI remaining performance obligations rising to $638B
At its Investor Day, Oracle laid out its computing expansion roadmap, increasing from approximately 1GW in FY25 to approximately 3GW in FY26, and plans to reach approximately 10GW by FY28. Its remaining performance obligations (RPO) increased from $138B at the end of FY25 to $638B at the end of FY26, adding approximately $500B in contracted business in one year. Based on Oracle's own estimate of approximately $11B to $16B in annual revenue per 1GW at full capacity, approximately 7GW corresponds to annual revenue of approximately $77B to $112B.
Rohan Paul
Oracle expects free cash flow of at least $30 billion in fiscal 2029
At its investor day, Oracle set a target of expecting free cash flow of at least $30 billion in fiscal 2029, whereas investors had previously expected a negative figure. In fiscal 2026, the company consumed $23.7 billion in free cash flow to build AI data centers for customers including OpenAI, and this year it plans capital expenditure of $90 billion to $95 billion. CFO Hilary Maxson said free cash flow will turn positive in the second half of fiscal 2028, provided that capital expenditure peaks in fiscal 2027 and fiscal 2028 and then declines and new capacity begins generating revenue. Oracle also set a cap of $20 billion on new financing through fiscal 2030, split equally between equity and debt, after having completed a $20 billion stock offering. After the announcement, the stock rose as much as 9.6%, while the shares had fallen 33% year to date as of Tuesday.