Oracle is spending on data centres at a pace few software companies have ever matched. In its first fiscal quarter, which ended on 31 August, capital spending reached 28.5 billion dollars and free cash flow was negative 5.4 billion dollars. Total debt stands at about 125 billion dollars.
That is not a forecast of trouble. Oracle remains very profitable at the operating level, and it reported record operating cash flow of 23 billion dollars in the same quarter. But for a customer signing a multi-year cloud commitment, the company’s financing and build schedule are relevant facts. They bear on one question above all: will the capacity and service you are paying for arrive when the contract says it will?
What Oracle has said about funding
In fiscal 2026 Oracle raised 43 billion dollars of debt and 5 billion dollars of equity, and it said it expected to raise about 40 billion dollars more in fiscal 2027, including a 20 billion dollar at-the-market equity programme. It said it did not expect to issue additional debt in calendar year 2026. In the first quarter it completed the equity sale, and interest expense rose 55 percent to 1.4 billion dollars, according to ERP Today.
Management’s explanation is that most of the new AI contracts signed in the quarter are paid in advance or use hardware supplied by the customer, so they do not need extra cash from Oracle. ERP Today also reports that roughly half of the backlog is tied to a single customer, OpenAI. Both points are worth understanding. Prepayment and customer-supplied hardware move risk toward the buyer, and concentration means Oracle’s plans lean on one very large relationship.
Where timing has slipped
Capacity is not arriving evenly. CNBC reported that the chief financial officer said some timelines had moved against the schedules in Oracle’s fiscal 2027 outlook, and that co-chief executive Clay Magouyrk said the company was working to obtain an air permit at a New Mexico site. This week, Oracle asked federal regulators to speed approval of a gas pipeline needed to power its New Mexico data centre project, saying that time was of the essence.
None of that says anything about your own tenancy. It does show that Oracle’s delivery depends on permits, power and suppliers that sit outside its direct control. A contract that treats delivery dates as certain is carrying a risk nobody has priced.
What to ask for in the contract
Put delivery in the order document. If you are buying capacity, a new region or a go-live date, write the committed date into the contract rather than relying on a sales presentation, and agree what happens if it is missed. The usual remedies are service credits, the right to reduce or defer your commitment, and the right to exit without penalty if a delay runs past an agreed point.
Ask how capacity is allocated. ERP Today’s advice to ERP buyers is to ask how Oracle prioritises capacity between AI infrastructure customers and SaaS tenants, and to secure service level language that does not depend on Oracle’s data centre delivery pace. That applies to anyone with a large Fusion, NetSuite or OCI commitment. Ask for a written statement of what is reserved for your committed volumes.
Be careful with prepayment. If Oracle asks you to pay in advance, ask what happens to the money if capacity is delayed, and whether it is refundable or creditable. Keep price protection for the full term and for any expansion, so that higher costs on Oracle’s side cannot be passed on mid-contract. Make sure you can move commitment between services or regions as your needs change.
Finally, plan the exit before you need it. Agree data export formats, transition support and notice periods, and read the change of control and assignment clauses. A long commitment is easier to live with when leaving is possible and priced.
Keep it in proportion
Oracle has delivered a great deal of capacity this year, and its backlog is large. The point is not that Oracle will fail to deliver. It is that a company funding growth on this scale has a different risk profile from the one many customers assumed when they signed their last agreement, and the contract is the place to reflect that.
Ask early, ask in writing, and expect different answers depending on how much you spend. Even when Oracle declines a request, the answer tells you how it ranks your account.
Check what you have already signed
Most customers reading this are already mid-term on an agreement, so the first job is a review of what is already in place. Read the order documents and the cloud services terms for what they say about delivery dates, service levels, credits, termination rights and price changes. Many agreements say less than people remember, and some of the protections discussed here may be missing altogether.
Where gaps exist, the best moment to raise them is when you add to the agreement or approach renewal. Oracle is more willing to discuss terms when it wants more of your business. Keep a record of the gaps you find so they are ready to be raised when that moment comes.
Map your own dependency
It also helps to understand how much of your business actually rests on each Oracle service. List the processes that depend on Fusion, NetSuite, OCI or the databases you run in Oracle’s cloud, and note what you would do if capacity or service were delayed or degraded for a period. For some processes the answer will be that you can wait. For others you may need a fallback environment or an exit plan.
That exercise turns a general worry about vendor risk into a short list of specific protections you can ask for, and it gives your procurement, finance and legal colleagues a shared view of where the exposure really is.
Conclusion
Oracle’s financing and build schedule are now part of the risk picture for any long cloud commitment. The company is strong operationally, but it is borrowing heavily, relying on prepayment structures, and dealing with real-world delays on some of its largest projects.
Reflect that in your contract. Write delivery dates and remedies into the order, ask how capacity is allocated, treat prepayment with care, and agree your exit terms while you still have negotiating leverage.
