Oracle reports $162B debt, $638B backlog as AI spending rises

Oracle reported fiscal Q4 revenue of $19.2 billion, including $9.9 billion in cloud sales, a 47% increase from the prior year. Cloud made up roughly half of the company’s business in fiscal 2026. Cloud Infrastructure revenue grew 93% in the quarter to $5.8 billion. Remaining performance obligations rose by $85 billion from the prior quarter to $638 billion.

The company plans to raise about $40 billion in fiscal 2027 through a mix of debt and equity. About $20 billion of that is a previously disclosed at-the-market equity program, implying roughly $20 billion in additional capital plans. In the prior fiscal year Oracle raised about $43 billion in debt and $5 billion in equity and spent nearly $56 billion on capital expenditures. Oracle now forecasts roughly $70 billion in net capex for fiscal 2027.

Despite operating profits, Oracle’s cash flow has been negative after capital spending, requiring ongoing access to external capital markets to fund infrastructure. Each round of financing can result in equity dilution or higher costs from servicing additional debt.

Total debt was $162 billion at the end of Q3, up from about $60 billion six years earlier. Analysts place the company’s debt-to-equity ratio at more than 400%. Credit-risk measures such as the Altman Z-Score have moved Oracle into a grey zone used to flag elevated bankruptcy risk.

Much of Oracle’s AI infrastructure spending is tied to large customer commitments. Reports link a sizable portion of the buildout to a multiyear contract with OpenAI estimated at $300 billion over five years. Remaining performance obligations represent contracted future revenue but convert to cash only if contracts run on schedule and customers do not renegotiate.

If AI demand softens, contract timelines extend, or interest rates increase, the company could face higher funding costs and lower cash conversion from its backlog. Oracle’s infrastructure plans rely on sustained large-scale demand for cloud and AI services and continued access to capital markets.