Oracle Caps Debt at $20 Billion, Forecasts $225 Billion Revenue by 2030

Oracle shares climbed 11% on Wednesday after the company outlined a financial plan designed to curb borrowing costs. The new strategy sets a hard ceiling on new fundraising over the next four years, a move intended to address investor anxieties about the company's expanding balance sheet.

During an investor day event, Oracle projected total revenue of $225 billion for fiscal year 2030. That figure implies an average annual growth rate of 35%. The company stated that financing for fiscal years 2027 through 2030 will be split evenly between equity and debt issuance, capping total new capital raised at $20 billion.

In a filing with the Securities and Exchange Commission, Oracle noted that vendor financing and customer prepayments would lower upfront cash needs. The company expects these measures to help transition its operations to positive free cash flow.

Analysts tracked by LSEG had previously forecast revenue of $224.2 billion for fiscal 2030. Their models anticipated 8% growth in fiscal 2027, followed by faster expansion in subsequent years. The new corporate guidance aligns closely with these market expectations.

Oracle stock had lost approximately one-third of its value this year. Investors worried that high interest rates and the company's $117 billion in long-term debt would make its artificial intelligence infrastructure buildout prohibitively expensive. S&P Global Ratings currently assigns Oracle a BBB- credit rating, the lowest tier of investment grade before junk status.

The company increased capital expenditures to $55.7 billion in fiscal 2026. FactSet data indicates that spending is expected to rise another 65% this year to $91.9 billion. Oracle claims its operating margin will exceed 40% by fiscal 2030. The firm also stated it will generate positive free cash flow in the second half of fiscal 2028, reaching $30 billion in the following year. Analysts currently project negative free cash flow of $35 billion for both the current and next fiscal years.

The five-year credit default swap spread for Oracle stands at 277 basis points. This metric, which reflects the cost of insurance against default, had reached roughly 320 basis points earlier this month and is up nearly 100% since the start of the year.