Oracle Corp. (NYSE:ORCL) shares are exploding Wednesday after the company set a fiscal 2030 revenue goal above $225 billion, kept its fiscal 2027 forecast and said spending will ease in fiscal 2029. Here’s what you should know.
- Oracle shares are climbing with conviction. Why is ORCL stock surging?
Oracle Stock Rises On Long-Term Revenue Target
Oracle used its Wednesday Investor Day, held in Las Vegas, to set a fiscal 2030 revenue goal above $225 billion, hold its fiscal 2027 forecast and promise lower spending in fiscal 2029. Co-CEOs Clay Magouyrk and Mike Sicilia presented the plan alongside finance chief Hilary Maxson, and the three took questions.
The 2030 goal implies revenue growth above 35% a year from fiscal 2026. Oracle also wants a 40%-plus operating margin, excluding certain items, and adjusted earnings of $21 a share or more.
For fiscal 2027, Oracle still expects revenue of $90 billion or more and adjusted earnings of $8.10 per share. Its cash priorities are unchanged too: funding growth, paying the dividend and holding an investment-grade credit rating.
Oracle Expects Spending to Fall and Cash Flow to Turn Positive
Spending is about to peak. Oracle says its capital expenditures, the money it puts into data centers and equipment, will be highest across fiscal 2027 and 2028, then drop in fiscal 2029.
Cash generation should improve in step. Free cash flow, what remains after that spending, should turn positive late in fiscal 2028 and reach $30 billion or more the following year. From fiscal 2029, Oracle says it can fund growth from its own cash.
Debt should shrink relative to earnings, too, with net debt under 3.5 times adjusted EBITDA, a common measure of earnings power.
Oracle Caps New Capital Raises at $20 Billion
Outside money has a ceiling. Oracle says it will raise no more than $20 billion of new capital through fiscal 2030, and it currently expects $10 billion to come from selling stock and $10 billion from borrowing. Refinancing old debt falls outside that limit, and so does a $20 billion stock sale Oracle completed earlier in its fiscal 2027 opening quarter.
To ease cash needs in the meantime, Oracle points to customer prepayments, equipment that customers supply and financing from vendors.
ORCL Shares Are Soaring
ORCL Price Action: Oracle shares were up 11.68% at $145.78 at the time of publication on Wednesday, according to Benzinga Pro.
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