Oracle Targets More Than $30 Billion in Free Cash Flow in 2029
Key Facts
Oracle Chief Financial Officer Hilary Maxson said at the company’s investor day on October 28 that free cash flow is expected to turn positive in the second half of fiscal 2028 and exceed $30 billion in fiscal 2029. The timeline gives the company a clear financial target after it recorded negative free cash flow in fiscal 2026 and the first quarter of 2027. Oracle said capital spending would peak in fiscal 2027 and 2028 before declining in 2029. It said growth would be self-funded starting in fiscal 2029. The projections reflect a shift from a period of heavy infrastructure spending to one in which investment is expected to begin generating positive free cash flow.
The company’s announcement capped additional financing at $20 billion through fiscal 2030, excluding the refinancing of existing debt. The amount is split equally between $10 billion in equity and $10 billion in gross debt. The commitment sets out the financing mix Oracle intends to use in the coming years, alongside its plan to expand capital spending. The company said vendor financing, customer-provided equipment and customer prepayments would reduce upfront cash needs in the period before free cash flow turns positive. The approach therefore combines a stated cap on additional capital with temporary operating financing sources to ease cash requirements before the target takes effect.
Oracle’s results show a divergence between operating cash flow and free cash flow in the recent period. Operating cash flow was $32.0 billion in fiscal 2026, up 54% year over year, while free cash flow was negative $23.7 billion. In the first quarter of fiscal 2027, operating cash flow rose 184% year over year to $23.103 billion, while free cash flow was negative $5.396 billion. The comparison shows that growth in cash generated by operations did not prevent free cash flow from remaining negative in either period. These figures put the stated turnaround target in the context of capital investment that the company says will peak in 2027 and 2028.
At investor day, Oracle also reaffirmed its fiscal 2027 guidance, forecasting total revenue of at least $90 billion and non-GAAP earnings of $8.10 a share. The guidance provides a near-term framework for tracking the company’s plans, while the free cash flow target extends to fiscal 2029. The financial targets came as news reports covered separate developments involving contracts related to cloud computing and artificial intelligence. Reuters, citing a Financial Times report, said a deal to lease Oracle chips to Tencent had been canceled, valuing the reported deal at about $7 billion; Reuters said it could not immediately verify the report. Reuters also cited Bloomberg as saying Microsoft was reducing the computing capacity it rented from Oracle after deciding not to renew the arrangement, whose financial terms were not disclosed.
The market’s response to the investor day outlook was separate from Oracle’s share movement in the November 11 session. Reuters reported that the stock jumped more than 12% on October 28 after the outlook was announced. On November 11, Reuters reported that Oracle shares and those of other AI infrastructure companies rose between 4.7% and 11.8% in premarket trading, as AI-related cloud computing stocks rallied more broadly after CoreWeave’s results. The latest move provides market context for the November 11 session, but came two weeks after the company announced its cash flow plan. The cited reports did not include a specific price for Oracle shares in the November 11 session.
The next date the company set for investors is December 14, 2026, when it will report results for the second quarter of fiscal 2027. The results will follow Oracle’s fiscal 2027 guidance and precede the horizon when the company expects free cash flow to begin turning positive in the second half of 2028. The release is a near-term milestone for assessing revenue and financial results against the guidance the company reaffirmed. The target of more than $30 billion in free cash flow in 2029 falls within the capital spending and financing path Oracle laid out at investor day. Its plan relies on capital spending declining after peaking in 2027 and 2028, followed by self-funded growth from 2029.