Oracle’s $664 Billion RPO Extends Across Multiple Years

Oracle reported $664 billion in companywide remaining performance obligations as of Aug. 31, while quarterly capital expenditures exceeded operating cash flow and 13% of the balance is expected to become revenue within a year.

Remaining performance obligations (RPO) are contracted revenue that a company has not yet recognized. Oracle’s total rose $209 billion from a year earlier. It also booked more than $30 billion in new AI cloud contracts during its fiscal first quarter, but the $664 billion RPO covers the company’s overall business, not AI alone.

Oracle expects about 13% of its RPO to become revenue in the 12 months after Aug. 31. It expects 37% in months 13 to 36 and 34% in months 37 to 60, with the rest recognized later.

Cloud infrastructure revenue rose 121% year over year to $7.4 billion in Oracle’s first-quarter results. Oracle added 850 megawatts of data-center capacity during the quarter and had delivered more than 300,000 GPUs to AI cloud customers since the end of fiscal fourth-quarter 2026.

For the three months ended Aug. 31, capital expenditures totaled $28.499 billion, compared with $23.103 billion in operating cash flow. Non-GAAP free cash flow was negative $5.396 billion. Operating cash flow included $11.4 billion in customer prepayments with a significant financing component. Oracle says free cash flow should not replace operating cash flow when assessing liquidity.

Oracle completed a $20 billion at-the-market stock sale during the quarter, receiving $19.9 billion in net proceeds. It also had $288 billion in additional lease commitments, substantially all related to data centers. Those commitments were not reflected on the balance sheet as of Aug. 31 and generally were expected to begin between fiscal second-quarter 2027 and fiscal 2029, with terms of 15 to 19 years.

Oracle said its cash and cash equivalents, marketable securities, cash from operations and available financing would cover working capital, committed capital expenditures and contractual obligations for at least 12 months.

Oracle Vice President Michael Egbert said Sept. 24, “Project Jupiter remains on our planned schedule.” Its New Mexico project projections for tax revenues, jobs, investment and economic impact assume approval of an air permit and a pipeline. The New Mexico Department of Justice filed responses backing emergency petitions challenging the project’s permitting decisions. Customer deliveries are scheduled to begin in the first half of 2027 at Doña Ana County, New Mexico, and are expected in the second half of 2027 at Port Washington, Wisconsin.