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Oracle Corporation ORCL

Three-pass checkedFresh as companies report

At $146.47 Oracle is priced at 18.2x FY2027 consensus earnings, 57.6% below its high, while the street was raising its revenue estimates.

The whole question is one number: $55.7B of capital spending against $32.0B of operating cash flow, closed with $40.1B of borrowing.

Key data

ItemValue
Market capitalization$421.9B
Enterprise value$546.8B
FY2026 revenue$67.4B, up 17.4%
Net debt$124.9B, about 3.9x EBITDA
Total debt vs book equity$156.2B vs $42.5B
Gross margin65.8%
Operating margin30.8%
FY2026 free cash flownegative $23.7B

ORCL · price with moving averages

Daily · 6MWeekly · 3Y
$84$145$205$265$325 Sep '23Apr '24Nov '24Jun '25Jan '26Sep '26 BID
EMAs82140

Source: market data.

The business

Oracle sells three things: the database software that stores corporate records, the applications that run finance and human resources departments, and rented cloud compute. The first two are a mature annuity with decades of switching costs behind them, sold to large enterprises on multi-year licenses and subscriptions. Gross margin is 65.8% and operating margin is 30.8%, which is what a software toll booth looks like.

What changed is the third business. Oracle committed to building enormous AI compute capacity and renting it to a short list of very large customers under multi-year contracts, and it is funding that with debt. Revenue grew 17.4% to $67.4B in the year ended 31 May 2026, capital spending hit $55.7B, and free cash flow was negative $23.7B. The annuity now finances a construction project.

Inside the complete One Pager

  1. 01The business
  2. 02Things you might not know
  3. 03Fundamentals
  4. 04Valuation
  5. 05Management
  6. 06Compensation
  7. 07The linchpins
  8. 08Last word

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