Oracle's cash burn and backlog both beat estimates as customers cover part of the AI bill

Oracle told investors on Thursday that customers prepaid $11.36 billion of its capital spending in the first quarter, a disclosure analysts said was a bullish signal for a company whose ballooning AI spending stoked a year of cash-burn worries.

The revelation yielded a smaller-than-expected cash shortfall and a larger-than-expected order backlog, and it sent Oracle’s beaten-down stock up 4% in after-hours trading.

Free cash flow fell $5.40 billion, well under the $9.56 billion forecast

Oracle reported a negative free cash flow of $5.40 billion for its fiscal first quarter, well short of the $9.56 billion shortfall analysts had penciled in, according to LSEG data.

That burn was more than the previous quarter, but nowhere near the negative free cash flow of $11.48 billion Oracle reported in the third quarter of fiscal 2026.

Revenue rose 30% to $19.3 billion, above estimates of $19.14 billion, and adjusted earnings of $1.92 a share topped expectations of $1.74.

Capital expenditure was $28.50 billion for the quarter, and Oracle said about $11.36 billion of that spending was funded by prepayments from its own customers and not its own cash.

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