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Oracle Corporation ORCL

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Oracle's contracted future revenue went from $138B to $638B in one year, and the stock fell 59% from its high while that happened.

The reconciliation of those two facts is on the cash flow statement: capital spending of $55.7B against $32.0B of operating cash, so free cash flow was negative $23.7B, funded with $43.0B of new bonds.

ORCL · price with moving averages

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

Source: market data.

The business

Oracle sells the database most large institutions run their records on, the applications that sit on top of it for finance and human resources, and increasingly the raw computing capacity underneath. The last of those, Oracle Cloud Infrastructure, grew 77% last year to $18.1B and is the only reason anyone is discussing the company. The database licence and support business, roughly $24.5B combined, grows about 1% a year and pays for everything.

What changed is that Oracle agreed to supply enormous quantities of artificial-intelligence training capacity to a small number of customers, which requires building data centers before the revenue arrives.

Inside the complete Back of Napkin

  1. 01The business
  2. 02The numbers
  3. 03Management
  4. 04How it fails or surprises you
  5. 05The shape of the payoff
  6. 06Closing thoughts
  7. 07Methodology

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