Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Oracle's free cash flow turned deeply negative in the current quarter, driven by a substantial capital expenditure outlay that far exceeded operating cash flow. The cash conversion cycle showed a marked deterioration compared to both the prior quarter and the year-ago period.
- Revenue increased from the prior quarter, but operating cash flow dropped sharply, resulting in a much weaker cash conversion rate. The combination of lower operating cash flow and significantly higher capital expenditure produced a large negative free cash flow and a deeply negative margin.
- Compared to the immediately preceding quarter, operating cash flow was lower and capital expenditure was higher, causing free cash flow to worsen from a modest negative to a large negative. Versus the same quarter one year earlier, revenue was higher and operating cash flow improved, but capital expenditure increased more than proportionally, resulting in a similar but larger negative free cash flow outcome.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$13.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
-$10.0B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.1B
Cash generated by operations before capital spending.
CapEx
$12.0B
Capital spending and related asset purchases.
FCF margin
-62.1%
The share of revenue converted into free cash flow.
Cash flow trend
A short quarterly history shows whether FCF is scaling with revenue or only spiking for one period.
| Period | Revenue | Operating CF | CapEx | FCF | FCF margin |
|---|---|---|---|---|---|
| 2025-02-28 | $14.1B | $5.9B | $5.9B | $71.0M | 0.5% |
| 2025-05-31 | $15.9B | $6.2B | $9.1B | -$2.9B | -18.4% |
| 2025-08-31 | $14.9B | $8.1B | $8.5B | -$362.0M | -2.4% |
| 2025-11-30 | $16.1B | $2.1B | $12.0B | -$10.0B | -62.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -162.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 74.9% | Lower capital intensity usually supports FCF margin. |
| Net cash | n/a | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Elevated Capital Expenditure
Capital expenditure surged in the current quarter, far exceeding operating cash flow, which drove free cash flow deeply negative. This is the strongest observable driver of the quarter's cash flow performance.
If capital spending remains at this elevated level without a commensurate rise in operating cash flow, free cash flow will continue to be pressured.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased from the prior quarter, but operating cash flow dropped sharply, resulting in a much weaker cash conversion rate. The combination of lower operating cash flow and significantly higher capital expenditure produced a large negative free cash flow and a deeply negative margin.
Compared to the immediately preceding quarter, operating cash flow was lower and capital expenditure was higher, causing free cash flow to worsen from a modest negative to a large negative. Versus the same quarter one year earlier, revenue was higher and operating cash flow improved, but capital expenditure increased more than proportionally, resulting in a similar but larger negative free cash flow outcome.
Monitor whether capital expenditure levels normalize in upcoming quarters, as the current spending rate is the primary factor behind the negative free cash flow.