Oracle expects its FY 2026 capital expenditures will be $15 billion higher that previously predicted, as the cloudy database biz invests to accommodate AI workloads.

Big Red’s reason for the extra spending is growth in its Remaining Performance Obligations (RPO), services its clients have contracted to consume but haven’t yet paid for.

During the company's fiscal Q2 2026 earnings call, Doug Kehring, Oracle Principal Financial Officer, said, "Given the added RPO this quarter that can be monetized quickly starting next year, we now expect fiscal 2026 capex will be about fifteen billion higher than we forecasted after Q1."

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Oracle said its backlog increased by $68 billion in the quarter ended Nov. 30, driven by commitments from Meta and Nvidia, and now totals $523 billion. The promised business offers a hedge against Oracle's reliance on OpenAI, which is reportedly aiming to pay [2]$300 billion to Big Red over the next five years despite having never yet shown a profit.

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The database biz also saw significant growth in its restructuring costs, which reached $406 million for the quarter, an increase of 387 percent year-on-year, but a few million less than the $415 million recognized in fiscal Q1 2026. The outlay is attributable largely to the [5]layoffs and severance obligations following from the company's $1.6 billion [6]Fiscal 2026 Restructuring Plan .

All told, Oracle [7]reported revenue of $16.1 billion, up 14 percent year-on-year, for EPS of $2.10, an increase of 91 percent.

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By segment: cloud revenue was $8 billion (up 34 percent); cloud infrastructure revenue was $4.1 billion, up 68 percent; cloud application revenue was $3.9 billion, up 11 percent; fusion cloud revenue was $1.1 billion, up 18 percent; and NetSuite Cloud ERP revenue was $1 billion, up 13 percent.

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Those numbers proved insufficiently robust for investors, whose dissatisfaction led to a share price decline of more than 11 percent in after-hours trading.

Oracle in November suffered an even more severe stock shock when shares fell 23 percent – shares started the month around $250 and ended the month around $200. That appears to be largely the result of concern about the amount of debt Oracle has taken on to fund its AI buildout, a financial bet sufficient to prompt financial firm Morgan Stanley [13]to argue for shorting Oracle stock .

Kehring attempted to calm investors during the earnings call by insisting that the company can access capital from several sources, including public bonds, banks, and private debt markets.

"In addition, there are other financing options through customers that may bring their own chips to be installed in our data centers and suppliers who may lease their chips rather than sell them," he explained. "Both of these options enable Oracle to synchronize our payments with our receipts and borrow substantially less than most people are modeling. As a foundational principle, we expect and are committed to maintaining our investment grade debt rating."

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Oracle stock is still up about 20 percent for the year, roughly the same as the NASDAQ. ®

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[2] https://www.theregister.com/2025/09/11/openai_reportedly_on_the_hook/

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[5] https://www.theregister.com/2025/09/03/oracle_cuts_more_jobs/

[6] https://www.sec.gov/Archives/edgar/data/1341439/000119312525200095/orcl-20250831.htm

[7] https://investor.oracle.com/investor-news/news-details/2025/Oracle-Announces-Fiscal-Year-2026-Second-Quarter-Financial-Results/default.aspx

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[9] https://www.theregister.com/2025/12/09/okta_agent_control/

[10] https://www.theregister.com/2025/12/10/teenagers_ai_chatbot_use/

[11] https://www.theregister.com/2025/12/10/really_simple_licensing_spec_takes/

[12] https://www.theregister.com/2025/12/10/nvidia_chip_tracking/

[13] https://www.ft.com/content/d2fd7846-9e79-431c-a91e-06cea8c809b6

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[15] https://whitepapers.theregister.com/