Markets ORCL JUN 20, 2026

Oracle's $638B AI backlog clears Street by $42B as OCI revenue jumps 93%

RPO grew $85B sequentially to $638B, up 363% YoY; Bank of America says OpenAI is more than half of it. Oracle plans another $40B in debt and equity in FY2027.

BY HENLEY MARRAST · MARKETS DESK

Oracle closed FY2026 with $638 billion in remaining performance obligations as of May 31, clearing StreetAccount consensus of $595.67 billion by roughly $42 billion and arriving 363% above the year-ago figure. RPO grew $85 billion sequentially. Bank of America analysts attribute more than 50% of the backlog to a single customer: OpenAI.

The quarter itself was strong on the operating lines. Q4 revenue of $19.2 billion grew 21%, Oracle Cloud Infrastructure revenue jumped 93% to $5.8 billion, total cloud revenue rose 47% to $9.9 billion, and non-GAAP EPS of $2.11 was up 24%. Operating cash flow for the year hit $32 billion, a 54% gain.

Then the financing picture. Oracle raised $43 billion in debt and $5 billion in equity during FY2026, pushing quarterly debt to $162 billion by Q3. Management guided to roughly $40 billion more in debt and equity in FY2027, with $20 billion of that already telegraphed via an at-the-market equity issuance. Net capex steps from $56 billion to $70 billion. FY2026 free cash flow was negative $23.7 billion.

That’s the structural picture: a hyperscaler effectively pre-funding the AI buildout on its balance sheet while one counterparty anchors more than half the book.

Incoming CFO Hilary Maxson walked through the recognition curve on the call: 12% of the $638 billion converts to revenue in the next twelve months, 34% in months 13 to 36, with both ratios expected to accelerate. She also warned gross margins will “step down” as datacenter projects ramp toward full revenue contribution. Oracle’s own release noted most of the Q3 and Q4 backlog growth came from large-scale AI contracts where customers either prepaid for GPUs or supplied them, mechanics that reduce the cash Oracle has to front for construction.

Guidance was reiterated at $90 billion in FY2027 revenue, just above the $88.9 billion consensus, with non-GAAP EPS lifted to $8.05 against $8.01 consensus and Q1 cloud growth guided to 58% to 64%.

Bloomberg has been mapping the circular financing underneath all of this, including Oracle’s role in the Stargate joint venture with OpenAI and SoftBank, drawing the comparison to the late-1990s fiber buildout. The 1999 analog isn’t flattering. Oracle’s bet is that this time the demand curve arrives before the debt schedule does.

Sources

About the author

Henley Marrast

MARKETS DESK

Henley Marrast covers AI-equity flow, accelerator demand, and earnings prints for AI Sheet Report. She leads coverage of the public AI complex from the New York markets desk, with a focus on the daily tape and quarterly results. She has been writing about technology markets for several years.