Compile Oracle's latest reported and analyst-estimated figures for capex…

Oracle is funding an AI data-center build that already outruns the cash the business produces. In the quarter ended August 31, 2026 (Q1 FY2027), operating cash flow hit a record $23.1 billion, but $11.4 billion of that was customer prepayments, and capital spending was $28.5 billion. Company free cash flow was therefore −$5.4 billion even after the strongest operating quarter Oracle has reported. Management’s full-year FY2027 plan keeps the same structure: reported capex of $90–95 billion, of which Oracle’s own net cash outlay is guided to no more than $70 billion, with the gap filled by prepayments, customer-supplied hardware, and external capital.

Fiscal year ends May 31. As of October 13, 2026, the latest reported period is Q1 FY2027 (ended August 31, 2026; released September 10, 2026). FY2026 (ended May 31, 2026) is the last completed year. “Current fiscal year” below is FY2027.

Capex: reported vs. net cash outlay

Oracle now guides two different capex numbers because a large share of the build is no longer funded by Oracle’s own cash. Reported capex is what hits the cash-flow statement. “Net cash outlay” subtracts customer prepayments with a significant financing component and certain short-term financing tied to capex. That second number is the cash Oracle itself expects to write.

• FY2026 reported capex: $55.66–55.7 billion, up from $21.2 billion in FY2025 and above the roughly $50 billion guidance then in force. FY2026 net cash outlay for capex was presented at about $48 billion.
• FY2027 company guidance (reaffirmed on the September 10, 2026 call): reported capex $90–95 billion; net cash capex not more than $70 billion. The $20–25 billion gap is customer prepayments and timing, not a cut in the physical build.
• Q1 FY2027 reported capex: $28.499 billion. Company supplemental math put net cash outlay for the quarter near $18.0 billion after $11.363 billion of customer prepayments with a financing component and an $830 million repayment of short-term financing related to capex.
• Analyst estimates: S&P Global Ratings, after the June guidance jump, forecasts a fiscal 2027 free operating cash flow deficit of nearly $42 billion (inclusive of prepayment benefits, aligned with the ~$70 billion net cash outlay). A pre-print sell-side snapshot on September 10, 2026 put the full-year FY2027 free-cash-flow loss near $45 billion. Q1 free cash flow of −$5.40 billion beat the LSEG consensus of about −$9.56 billion.

What this means for anyone modeling the stock: the $90–95 billion figure is the capacity Oracle is installing; the ≤$70 billion figure is the cash hole shareholders and lenders have to fill. If prepayments slip, reported capex does not fall—Oracle’s cash requirement rises.

Debt, cash, and the lease stack

On the balance sheet, borrowings fell slightly in Q1 because Oracle repaid debt and did not issue new bonds. The real leverage increase is in leases that have not started.

As of August 31, 2026 (Form 10-Q):

• Notes payable and other borrowings: current $7.625 billion + non-current $117.712 billion = $125.337 billion.
• Cash and cash equivalents $36.369 billion + marketable securities $708 million = $37.077 billion (MD&A).
• Company-style net debt (borrowings minus cash and marketable securities, leases excluded): $88.26 billion.
• Operating lease liabilities $34.621 billion (current $4.027 billion) + finance lease liabilities $9.185 billion (current $749 million) = $43.806 billion of recognized lease liabilities.
• Additional lease commitments not yet commenced: $288 billion, substantially all data-center leases expected to start between Q2 FY2027 and FY2029, with terms of 15–19 years, and not on the balance sheet. At May 31, 2026 that figure was about $260 billion.
• Undiscounted payments on leases already running: about $48.1 billion operating + $15.2 billion finance.
• Purchase obligations rose to about $34.2 billion at August 31, 2026, from $13.3 billion at May 31, 2026.

May 31, 2026 comparison: borrowings $129.54 billion ($7.199 billion current + $122.342 billion non-current); cash and marketable securities $31.89 billion; net debt before leases about $97.7 billion; recognized lease liabilities about $37.9 billion.

Borrowings + recognized leases + leases not yet started were about $457 billion at August 31, 2026, against remaining performance obligations of $664 billion. RPO is contracted future revenue, not cash already collected; the 10-Q expects about 13% of that $664 billion to be recognized within 12 months.

Six-quarter cash-flow trend

Oracle defines free cash flow as operating cash flow minus capital expenditures. That is the series below. Q1 FY2027 operating cash flow includes $11.4 billion of customer prepayments with a significant financing component, so the “record” operating figure is not all earnings converting to cash.

Quarter ended	Operating cash flow	Capex	Free cash flow	Leases not yet commenced (period end)
May 31, 2025 (Q4 FY2025)	~$6.2B	$9.08B	−$2.92B	$43.4B
Aug 31, 2025 (Q1 FY2026)	$8.140B	$8.502B	−$0.362B	$99.8B
Nov 30, 2025 (Q2 FY2026)	~$2.06B	$12.03B	−$9.97B	$248B
Feb 28, 2026 (Q3 FY2026)	~$7.16B	$18.64B	−$11.48B	$261B
May 31, 2026 (Q4 FY2026)	~$14.62B	$16.49B	−$1.87B	~$260B
Aug 31, 2026 (Q1 FY2027)	$23.103B	$28.499B	−$5.396B	$288B

Trailing twelve months to August 31, 2026: operating cash flow about $46.9 billion, capex $75.7 billion, free cash flow −$28.7 billion. Full FY2026: operating cash flow $31.98 billion, capex $55.66 billion, free cash flow −$23.7 billion (versus −$0.39 billion in FY2025).

The burn is not steadily worsening quarter by quarter—Q3 FY2026 was the trough at −$11.5 billion, and Q4 improved sharply—but every one of the last six quarters was free-cash-flow negative, and the full-year FY2027 plan implies a much larger annual deficit than FY2026.

Financing, dividends, and buybacks

Oracle has not completed a new public bond deal since February 2026. It has, however, already used the equity side of its 2026 funding plan, and press reports in early October 2026 said it was exploring off-balance-sheet chip financing.

• September 2025: $18.0 billion senior notes (six tranches, due 2030–2065).
• February 2–4, 2026: $25.0 billion fixed-rate notes across eight tranches (4.550% to 6.850%, due 2029–2066) plus $500 million floating-rate notes due 2029. Together with the September deal, fiscal 2026 senior-note issuance was about $43 billion of par.
• February 2026: $5.0 billion of 6.50% Series D mandatory convertible preferred stock (depositary shares trade as ORCL-PRD). Preferred carrying value was $4.954 billion at both May 31 and August 31, 2026. Preferred dividend in Q1 FY2027 was $81 million.
• Q1 FY2027: at-the-market common-stock program fully used—141 million shares, gross proceeds of $20 billion, net proceeds $19.909 billion.
• June 10, 2026 guidance: expect to raise about $40 billion of debt and equity in FY2027, including the already-announced $20 billion ATM (not on top of it), and do not expect additional debt issuance in calendar 2026. The ATM is done; the remaining ~$20 billion of that FY2027 plan had not been raised as new Oracle bonds as of the Q1 print.
• October 8, 2026 press: Oracle was reportedly in talks with Apollo and Goldman Sachs on a structure in which investors would fund a separate vehicle that buys chips Oracle would lease—explicitly to avoid more borrowing on Oracle’s own balance sheet. That is not a completed issuance.

Dividend: quarterly common dividend remains $0.50 per share ($2.00 annualized). It was raised from $0.40 to $0.50 in the dividend paid January 2025 and has not been increased since. Latest declaration (with Q1 results): payable October 23, 2026 to holders of record October 9, 2026. Preferred dividend of $1,625 per preferred share payable October 15, 2026. Q1 cash dividends to stockholders were $1.565 billion.

Buybacks: effectively paused. No repurchases in the three months ended August 31, 2026. About $6.3 billion of authorization remains, with no expiration, but the 10-Q says the pace depends on capex and other cash needs. FY2026 share repurchases were only about $0.1 billion, versus multi-billion-dollar programs earlier in the decade.

Company-reported vs. analyst-adjusted leverage

The gap is almost entirely leases that GAAP has not yet put on the balance sheet, plus how rating agencies treat preferred stock and prepayments.

Measure (Aug 31, 2026 unless noted)	Amount	What it includes
Gross borrowings	$125.3B	Notes and other borrowings only
Company-style net debt	$88.3B	Borrowings minus cash and marketable securities; excludes all leases
Recognized lease liabilities	$43.8B	Operating + finance leases already commenced
Net debt + recognized leases	~$132B	On-balance-sheet debt-like claims
Leases not yet commenced	$288B	Signed, mostly 15–19 year data-center leases; off balance sheet
Borrowings + all lease claims	~$457B	One filing-based stack used by independent analysis
S&P adjusted leverage (FY2027 forecast)	mid-4x	Debt adjusted to include the ~$260B of additional lease commitments (May 31 figure) and purchase obligations; rating BBB− (cut from BBB on July 9, 2026), stable outlook
Filing-based net debt / EBITDA, leases excluded (TTM)	~2.5–2.6x	Independent calculation from filed operating income, depreciation, and net debt before leases
Same source, net debt and recognized leases / EBITDA	~3.7x	Still excludes the $288B not-yet-commenced pile

S&P’s FY2027 free-operating-cash-flow deficit of nearly $42 billion is an analyst-adjusted view that already gives Oracle credit for customer prepayments, and it is still far worse than the −$23.7 billion company free cash flow of FY2026. Fitch has been cited at BBB, with a prior threshold that leverage above 3.5x EBITDA—or above 4x if rents are included—would pressure the rating. Moody’s has been cited at Baa2 with a negative outlook. Those agency ratios are not the same as Oracle’s borrowings-minus-cash figure, and they are the ones that govern index eligibility and borrowing cost if the rating slips below investment grade.

Implication: a competitor or creditor who stops at “net debt of $88 billion and 2.6x” is looking at the narrowest definition. The binding constraint is the combination of ≤$70 billion of FY2027 cash capex, $7.2 billion of debt principal due in FY2027, a dividend that still costs more than $6 billion a year at the current rate, and $288 billion of leases that start whether or not the contracted AI tenants pay on the schedule embedded in the $664 billion backlog.

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Recent Findings Supplement (October 2026)

Oracle's aggressive AI/cloud infrastructure buildout has driven record capex far exceeding operating cash flow, funded primarily by equity raises, customer prepayments, and prior debt issuances, with negative FCF persisting but showing some moderation in the most recent quarter amid strong backlog growth.[1][2]

Recent data (primarily from Q4/FY2026 results released June 2026 and Q1/FY2027 results released September 10, 2026, plus related 10-Q/10-K filings and analyses) focus on the period after April 13, 2026. Oracle's fiscal year ends May 31 (FY2026: June 2025–May 2026; FY2027 ongoing). No significant new dividend or share buyback policy changes were reported.[3][4]

Capex (Reported and Guidance)

Oracle distinguishes between headline (reported) capex and "net cash outlay" after customer prepayments/financing effects. Guidance emphasizes the latter for funding needs.[5][6]

• FY2027 guidance (issued/updated in Q1 FY2027 reporting): Reported capex $90–95 billion; net cash outlay at most ~$70 billion (after ~$20–25 billion in expected customer prepayments). This is above prior analyst estimates (~$67–68 billion) and follows FY2026 actuals exceeding the company's ~$50 billion target.[1][2]
• Q1 FY2027 (ended Aug. 31, 2026): Reported capex $28.5 billion (already over half of full FY2026 total; ~51% of FY2026 spend in one quarter). Net cash outlay ~$18 billion after ~$11.4 billion customer prepayments.[2][4]
• FY2026: Reported capex $55.66–55.7 billion (up ~162% YoY from $21.2 billion in FY2025).[7][8]

Implications for competitors/entrants: The scale of spending (tied to AI demand outpacing supply) creates a high barrier; rivals must match capacity or differentiate via efficiency/partnerships, while Oracle's prepayment model reduces net cash needs but locks in contracted revenue.[9]

Operating Cash Flow (OCF), Free Cash Flow (FCF), and Quarterly Trends

OCF has risen sharply with prepayments and growth, but FCF remains deeply negative due to capex. TTM figures reflect the cumulative impact.[10][4]

• Q1 FY2027: OCF $23.1 billion (up ~184% YoY; includes $11.36 billion customer prepayments with financing component); FCF –$5.4 billion (better than analyst expectations of ~–$9.56 billion; improved from prior quarter's –$11.48 billion but still negative).[2][2]
• FY2026: OCF ~$32.0 billion (up ~54% YoY from ~$20.8 billion in FY2025); FCF –$23.7 billion (vs. –$0.394 billion in FY2025).[7][8]
• TTM to Q1 FY2027 (four quarters ended Aug. 31, 2026): FCF –$28.7 billion; capex $75.7 billion.[1]

Last six quarters trend (approximate quarterly figures drawn from earnings releases, 10-Q/analyses; quarters aligned to fiscal calendar; prepayments increasingly material in later periods):[4][1]

• Q1 FY2026 (ended ~Aug. 2025): Capex ~$8.5 billion; OCF ~$8.1 billion; FCF ~–$0.4 billion.
• Q2 FY2026 (~Nov. 2025): Capex ~$12.0 billion; OCF ~$2.1 billion (low); FCF ~–$10.0 billion (ex-prepayments).
• Q3 FY2026 (~Feb. 2026): Capex ~$18.6 billion; OCF ~$7.2 billion; FCF ~–$11.5 billion.
• Q4 FY2026 (~May 2026): Capex ~$16.5 billion; OCF ~$14.6 billion (incl. ~$4.6 billion prepayments); FCF ~–$1.9 billion.
• Q1 FY2027 (~Aug. 2026): Capex $28.5 billion; OCF $23.1 billion (incl. $11.4 billion prepayments); FCF –$5.4 billion.

Trend insight: Capex and negative FCF accelerated through FY2026 as AI buildout ramped (peaking in Q3 before partial moderation), with OCF boosted by prepayments in Q4 FY2026 and especially Q1 FY2027. TTM FCF worsened to –$28.7 billion. Prepayments mitigate but do not eliminate cash burn.[4]

Implications: Sustained negative FCF pressures balance sheet and ratings (S&P downgraded to BBB–); success depends on backlog conversion and utilization (reported at ~98% in Q1).[7]

Total Debt, Net Debt, and Lease Commitments

Debt has risen with prior issuances but showed slight sequential decline in Q1 FY2027 due to repayments and equity funding. Off-balance-sheet leases represent a massive future obligation.[11][1]

• Latest (Aug. 31, 2026): Total borrowings/notes payable ~$125.3 billion (down from $129.5 billion at May 31, 2026); lease liabilities on balance sheet ~$43.8 billion; net debt (before leases) ~$88 billion.[12][1]
• Off-balance-sheet lease commitments not yet commenced: $288 billion (primarily data center leases, 15–19 year terms, expected to commence Q2 FY2027–FY2029). Purchase obligations also rose sharply (~$34 billion).[11][4]
• Company-reported vs. analyst-adjusted (lease-inclusive) leverage: Reported metrics focus on on-balance-sheet debt (~$125 billion) plus leases (~$44 billion). Adjusted figures incorporating off-balance-sheet leases would show substantially higher leverage (potentially hundreds of billions in total obligations), contributing to credit concerns and the S&P downgrade.[13]

Implications: High lease commitments amplify long-term obligations beyond reported debt; competitors or new entrants face similar scaling challenges but without Oracle's contracted AI backlog cushion.[7]

Latest Bond Issuances, Equity/Convertible Raises, and Capital Plan

No new bond issuances in calendar 2026 beyond February; equity filled the gap.[6][14]

• Recent raises (post-April 2026 focus): $20 billion at-the-market (ATM) common stock issuance completed in Q1 FY2027 (~141 million shares, ~$19.9 billion net proceeds).[1][4]
• Prior (within scope): $18 billion senior notes (Sep. 2025, multiple tranches 4.45–6.10%); $25 billion senior notes + $500 million floater (Feb. 2026, tranches up to 6.85%); $5 billion 6.50% Series D mandatory convertible preferred (Feb. 2026).[14][1]
• FY2027 plan: ~$40 billion in debt + equity (includes the completed $20 billion equity); no additional debt expected in calendar 2026.[5]

No notable changes to dividends (ongoing payments) or buybacks (minimal/reduced activity noted in some periods).[4]

Table of Key Sources (selected recent primary/analytical sources; full list includes earnings releases, 10-Q/10-K, and analyses):

• Oracle Q1 FY2027 earnings/10-Q (Sep. 2026 filings and releases): Capex, OCF/FCF, debt, leases, RPO, guidance.[4]
• Oracle FY2026/Q4 earnings (Jun. 2026): Historical FY2026 figures and initial FY2027 outlook.[3]
• SEC analyses/filings summaries (e.g., sec-api.io Oct. 2026): Debt, leases, TTM aggregates, quarterly breakdowns.[1]
• News/analyst reports (WSJ, Reuters, Economic Times, etc., Sep.–Oct. 2026): Confirmation of figures, expectations vs. actuals, financing details.[2][5]

Differences between company-reported and adjusted leverage stem mainly from the $288 billion off-balance-sheet leases (not included in standard debt metrics but disclosed in footnotes). All monetary values are in USD. Data is current as of the latest October 2026 sources; further 10-Q details or updates could refine quarterly splits.