Oracle's first-quarter fiscal 2027 earnings report on September 10 has become a focal point for investors weighing the company's massive AI infrastructure spending against growing cash-flow pressures. The company is scheduled to report after the market close, with its earnings call at 4 p.m. Central Time / 5 p.m. Eastern. The update follows a fiscal 2026 in which Oracle's workforce declined by about 21,000 employees, from roughly 162,000 to 141,000, according to Reuters reporting on its annual filing. Oracle recorded roughly $1.84 billion in restructuring expenses, compared with $374 million the prior year, and cited AI adoption, management changes, product shifts, performance issues, strategic moves and acquisitions as factors behind workforce adjustments.
Investors are also focused on Oracle's cash generation. In fiscal 2026, the company posted $32 billion in operating cash flow, but capital expenditures of about $55.7 billion produced a negative free cash flow of $23.7 billion. Management separately described fiscal 2026 net cash outlay for capital expenditure at approximately $48 billion after roughly $8 billion in customer prepayments and timing effects. For fiscal 2027, Oracle has outlined approximately $70 billion in net cash outlay for capital expenditure, while reported capex could reach $90 billion to $95 billion once customer prepayments and timing effects are included. The company said in June it expects to raise roughly $40 billion through debt and equity in fiscal 2027, including its previously announced $20 billion at-the-market share issuance, and does not expect additional debt issuance during calendar 2026.
Oracle's June guidance called for first-quarter revenue growth of 27% to 29%, total cloud revenue growth of 58% to 64% in dollars, and adjusted earnings of $1.72 to $1.76 per share. The company also reported $638 billion of remaining performance obligations at the end of May, with approximately 12% expected to become revenue within 12 months.
In Friday trading, Oracle shares rose 2% to $157.13, building on Thursday's 5.7% rally that followed Federal Reserve Governor Christopher Waller signaling a preference for holding interest rates steady until more inflation data arrives. Morgan Stanley raised its price target to $210 from $207 with an Equalweight rating, citing improved gross margin visibility in Oracle's GPU-as-a-Service business. Bernstein reiterated an Outperform rating and suggested Oracle may be nearing the end of its capital-raising cycle. Jefferies kept a Buy rating but trimmed its target to $290 from $320, pointing to OCI revenue growth and operating margin as key metrics. Mizuho reiterated an Outperform rating with a $320 target and highlighted an expanded Department of Veterans Affairs contract with a ceiling increase of approximately $17 billion that could extend through May 2031. Options data suggests the market is pricing a potential 10% move in either direction following the earnings report.
