Oracle Expects Positive Cash Flow in FY2028 as AI Spending Peaks

Oracle expects its free cash flow to turn positive in the second half of fiscal 2028 and exceed $30 billion in fiscal 2029, as the company plans to reduce spending on artificial intelligence (AI) and cloud infrastructure.

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The company announced the outlook at its investor day on October 28, 2026. Oracle also said it would limit additional capital raising to $20 billion through fiscal 2030, excluding the refinancing of existing debt.

Oracle Plans to Reduce AI Infrastructure Spending

Oracle expects capital expenditure to peak in fiscal 2027 and fiscal 2028 before declining in fiscal 2029. The reduction is expected to help the company generate positive free cash flow and fund its future growth through internal resources.

Hilary Maxson, Oracle’s Chief Financial Officer, said the company expects to begin funding its growth without additional external capital from fiscal 2029.

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To manage its cash requirements during the expansion phase, Oracle plans to use vendor financing, customer-provided hardware and customer prepayments. The company expects these arrangements to reduce the amount of cash required upfront to build its cloud infrastructure.

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Oracle also expects its net debt to fall below 3.5 times its annual adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) in fiscal 2029.

The company’s announcement comes amid investor concerns about the cost of building data centres and computing infrastructure to meet rising demand for AI services.

Oracle Sets $225 Billion Revenue Target for FY2030

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Oracle has set a target of at least $225 billion in revenue for fiscal 2030, along with an adjusted operating margin of more than 40% and adjusted earnings of over $21 per share.

The company reaffirmed its fiscal 2027 outlook, which includes:

• Revenue of at least $90 billion.
• Adjusted earnings per share of $8.10.
• Positive free cash flow in the second half of fiscal 2028.
• Free cash flow exceeding $30 billion in fiscal 2029.

Oracle said it would limit additional capital raising through fiscal 2030 to $20 billion, split equally between equity and gross debt. This is separate from refinancing existing debt.

What It Means for the AI Business

Oracle has expanded its cloud infrastructure business to support AI workloads and large customer contracts, including its partnership with OpenAI. However, building the required data centres and computing capacity has increased its funding requirements.

The latest outlook provides a timeline for reducing capital spending and dependence on external funding. For investors, Oracle’s ability to meet these targets will depend on controlling infrastructure costs and converting its growing cloud business into cash.

The company’s projections are forward-looking targets and are not guaranteed results.