2 hours ago - Business
Oracle posts strong sales growth and negative free cash flow
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Oracle shares jumped in after-hours trading Thursday after the company reported strong revenue growth in the unit that houses its AI hyperscaler business.
Why it matters: The company is closely watched as it is seen as less financially strong than the other tech giants sinking hundreds of billions of dollars into the AI buildout.
- Standard & Poor's has a BBB- rating on the company, just one notch above junk territory. (Moody's has it two notches above junk.)
The latest: Oracle reported better-than-expected sales and earnings and a big jump in contract backlogs.
Yes, but: The company continues to be free cash flow-negative — a major change from the decades when it minted money as a business software giant. That's because of its large capital expenditures.
- Oracle reported $28.50 billion in capital expenditures in the just-completed quarter.
- Free cash flow was a negative $5.40 billion versus a negative $362 million during the same quarter last year.
