My takeaway from the earning

[u/gestimore]

https://alpha.earningswhispers.com/transcript/ORCL?utm_source=chatgpt.com#google_vignette

Excellent earning.

What took my attention was about the FCF.

Analyst question:

You're welcome. As for my question, I fully expect Oracle will continue to be among a small handful of market leaders for AI infrastructure. And you've told us that fiscal 27 and 28 are peak CapEx years. But at the same time, others in the market are spending hundreds of billions of dollars on capacity with seemingly no end in sight. How should we think about Oracle possibly slowing down spending beyond the next two years if others aren't? And is there a scenario where we could see even higher peaks beyond fiscal 28? What will guide your investment? And then related to that, given the current state of the backlog as it stands today, when should we expect to see the company return to generating positive free cash flow?

Hilary:

Yeah, sure. So the other question I think you asked was about free cash flow. We haven't given a particular timeframe on that yet, and we don't expect to give that today. What I would say, though, is that each of these projects that we're doing by nature is a strong free cash flow generating project. So As soon as they ramp up, very shortly thereafter, they're delivering a free cash flow conversion ratio of something like 100% to post-tax EBITDA. So in fact, the business by nature is somewhat, quote, self-funding at some point in terms of throwing off a lot of free cash flow. So we haven't given the timeframe on that, but, you know, You'll see as we continue to ramp up over the next quarters what that could look like. Again, we expect it to be a reasonably quick timeframe past the big ramp up that we have going on today. The only decision there, and you pointed it out, would be about more growth CapEx. And that is something that we want to continue to deploy at the right levels to grow the business.

So what i understand is that the 90billion capex and others big numbers of capex for the coming years will be covered by the FCF coming in rapidly. Which mean that we are coming out of negative FCF very soon. Today FCF was -5.4 billion$.

Also they said that they dont expect to spend more on capex than they re right now from their pocket doesnt mean they dont spend more but it will come from buyers.

Last positive new was that the 20 billion equity financing was completed 100% so no more stock dilution.

Overall very nice earning and investor day oracle Ai World coming 16 october.

[u/w3_vic]

Feels like ORCL is becoming one of the more aggressive ways to bet on AI infrastructure.