Oracle: 10Q Cut | $248 Bn Lease Commits
Jordan Chalfin, CFA: Head of Technology - CreditSights
Michael Pugh: Analyst - CreditSights
15 December 2025
Insights into Oracle Financial Metrics and Strategic Transactions, including:
- Robust Revenue Growth: Oracle posted double-digit revenue increases, with LTM F2Q26 revenues reaching $61.0bn and YoY growth accelerating to 11.1%, highlighting momentum in cloud and tech services.
- Massive CapEx Expansion: Capital expenditures surged to $35.5bn LTM F2Q26—now 58.1% of sales—reflecting Oracle’s aggressive infrastructure build-out to support future growth.
- Strategic Stake Sale in Ampere: Oracle sold its entire stake in Ampere Computing for $4.3bn, realizing a $2.7bn gain and reinforcing its focus on core business and capital allocation. Discover more in our Oracle Financial Metrics and Strategic Transactions analysis.
- Leverage and Balance Sheet Trends: Net leverage remains stable at 2.8x despite rising debt, while lease liabilities and CapEx weigh on free cash flow and credit metrics.
- Credit Ratings and Outlook: Fitch rates Oracle BBB/STABLE post-Ampere sale, while Moody’s and S&P maintain negative outlooks, underscoring ongoing credit watchpoints for investors.
Executive Summary
- Oracle disclosed in its 10Q filing that it had $248 bn of additional lease commitments that are expected to commence through FY2028, which is up massively from the $100 bn figure as of the prior quarter.
- Oracle has new purchase obligations of $10 bn for cloud capacity arrangements; it sounds like Oracle might be renting capacity from a third-party cloud provider, which would be surprising to us.
- While the company downplayed its capex requirements on its earnings call, the 10Q filing said that capex will continue on an “upward trend” in the next few fiscal years.
- The company provided a breakdown in its 10Q filing on the $523 bn RPO balance; we note that roughly 25% of the balance is expected to be converted into revenue in more than 5 years from now.
- Oracle’s sale of its stake in Ampere during the quarter generated cash proceeds of $4.3 bn; the company disclosed its $2.7 bn pre-tax gain on earnings night although did not specify the $4.3 bn in M&A proceeds.
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