en.Wedoany.com Reported - Oracle Corp. plans to raise an additional $40 billion through debt and equity financing for artificial intelligence data center construction and raised its earnings forecast for the next fiscal year, but the news sent its shares down 9% in after-hours trading, despite the latest quarterly report showing revenue and profit exceeding market expectations.

Oracle reported fourth-quarter fiscal results, with earnings per share (excluding stock compensation and other costs) of $2.03 and revenue up 21% year-over-year to $19.18 billion, beating Wall Street estimates of $1.96 and $19.10 billion, respectively. Net profit for the quarter rose to $4.22 billion from $3.43 billion in the same period last year.

For the full fiscal year, Oracle's free cash flow was negative $23.7 billion, with depreciation nearly doubling to $7.62 billion. Capital expenditures reached $55.66 billion, up 162% year-over-year, reflecting the scale of AI infrastructure construction. The company maintained its fiscal 2027 revenue guidance of $90 billion and raised its adjusted earnings per share forecast to $8.05, above Wall Street expectations of $8.01 and $88.9 billion.

Oracle said the additional $40 billion raised will be used for AI infrastructure construction, including the previously announced $20 billion stock offering. This fiscal year, the company has raised $43 billion through debt financing and $5 billion through equity sales. Investors are concerned about whether AI can generate sufficient revenue to justify such high borrowing costs.

For the current quarter, Oracle expects earnings per share between $1.72 and $1.76, with revenue growth of 27% to 29%. Wall Street expects earnings per share of about $1.68 and revenue of $19.06 billion, representing growth of about 28%. Looking back at the previous quarter, Oracle's cloud product revenue grew 47% year-over-year to $9.91 billion, slightly below Wall Street's target of $9.97 billion. Software revenue (including license sales and support) was $6.93 billion, down 2% year-over-year, but above Wall Street's expectation of $6.82 billion. Cloud infrastructure segment sales grew 93% to $5.8 billion. Remaining performance obligations (RPO, including contracted but not yet recognized revenue) at quarter-end were $638 billion, up 363% year-over-year, above Wall Street's forecast of $595.67 billion.

Oracle CEO Clay Magouyrk said on the conference call that RPO growth was primarily driven by large-scale AI contracts, with customers prepaying for graphics processing units (GPUs) or purchasing them for supply to the company. Analysts at Bank of America noted in a report that over 50% of Oracle's RPO came from OpenAI Group PBC. Valoir analyst Rebecca Wettemann told SiliconANGLE that this situation worries investors, as a failure by OpenAI to meet growth targets could materially impact Oracle's profits. Constellation Research analyst Holger Mueller pointed out that Oracle must build AI data centers because business is growing rapidly, setting full-year records in both total revenue and cloud revenue. RPO represents Oracle's future revenue for nine years at current pace, which explains the company's massive spending and aggressive refinancing. However, he noted that Oracle's debt remained stable entering the new fiscal year, suggesting no further funding may be needed for infrastructure expansion. Magouyrk revealed that Oracle plans to bring online approximately 1 gigawatt of new computing capacity this quarter, roughly equivalent to the total computing capacity brought online in the entire fiscal 2026. This quarter, Oracle hired former Schneider Electric executive Hilary Maxson as chief financial officer. She explained on the call that the company's net cash expenditure for capital expenditures in fiscal 2027 is approximately $70 billion, excluding about $20 billion to $25 billion in customer prepayments. Wall Street expects capital expenditures of $71.77 billion. Wettemann believes capital expenditures are another concern for investors, but once new data centers come online, Oracle will be able to improve margins in its cloud infrastructure business. She said Oracle's investment in its own infrastructure will drive higher efficiency and expects the company to further explain how it can deliver data center performance more efficiently than peers.

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