Oracle spent $28bn of cash in the three months it reported $4.68bn of net income

Oracle did not publish a capital expenditure figure for the quarter, so it has to be backed out of the cash flow it did publish: $23bn in from operations, free cash flow of negative $5bn, a difference of $28bn ^[7][8][1]. Against revenue of $19.35bn, that is about 1.45 times sales ^[3][2]. There is no depreciation figure and no asset-life assumption in the release either ^[14].

Infrastructure revenue of $7.4bn annualises to $29.6bn ^[10][3]. One quarter of spending is roughly a year of infrastructure sales at the current run rate ^[1][3].

The growth is concentrated. Revenue rose $4.42bn year on year ^[3][4]. Growth of 121% implies a prior-year infrastructure base near $3.35bn, so that one line supplied about $4.05bn of the increase ^[10][5]. That is roughly 92% of it ^[6]. Applications cloud grew 10% to $4.2bn and software revenue fell 3% to $5.55bn ^[11][12].

Diluted earnings per share rose 55% to $1.56, five points slower than net income ^[2][1]. The gap implies a diluted share count about 3% larger than a year ago ^[7]. Oracle completed a $20bn common stock sale during the quarter as part of its capital investment programme ^[18], four times the quarter's free cash shortfall ^[11]. The company said the structuring of the more than $30bn in AI cloud contracts booked in the period had no incremental impact on its capital raising plans ^[15][16].

Operating cash flow is the line that moved most. Up 184%, it implies a year-ago quarter near $8.1bn and an increase of about $14.9bn ^[7][8], against a $1.75bn increase in net income ^[9]. Customer cash arriving ahead of revenue recognition would explain a gap that size, but the release does not break it out ^[14].

The backlog is the counter-argument. Remaining performance obligations of $664bn against annualised first-quarter revenue of $77.4bn is about 8.6 years of contracted sales ^[14][3][10]. "Virtually all of Oracle's enterprise customers want to use AI to reason on their private data and to use AI agents to automate their business processes," Oracle said in a statement ^[21].

The quarter is a financing story, and $28bn is the figure I would underwrite against ^[1]. Two ways that read is wrong. If the contracted work converts on the schedule the backlog implies, the negative free cash flow is timing and the capacity is pre-sold ^[14]. If bookings slow while the outlay holds, the spending comes out of issuance and debt, and the most recent raise was $20bn of common stock ^[18].