ORCL · Forward model · Bear case
The Bear case, 20 quarters out
Model as of
Each segment is projected from its own operating driver, rolled up into consolidated cash flow, and discounted back to a fair value per share. The assumptions below are editable — change them and every number on this page moves with them.
Oracle publishes all six revenue lines by quarter, and they sum exactly to reported consolidated revenue in all nine quarters. Quarter labels are fiscal: 2027 Q1 ended 31 August 2026. Revenue history is disclosed; the cost split is assumed. Hardware and Services carry disclosed segment margins, while the four cloud-and-software offerings use assumed margins that weight-average to the disclosed segment result. Software license and hardware use trend-adjusted seasonality derived from Oracle's fiscal 2025 and 2026 offering tables. The factors average to one, so the Q4 peak and Q1 reset move revenue between quarters without altering the underlying annual trend. Live OCI megawatts remain undisclosed, so the 2,850 MW basis and resulting $2.66M revenue per megawatt-quarter are inferred. Capex uses Oracle's net cash-outlay basis. The $20B ATM equity sale completed in Q1 FY2027 is reflected in the basis share count; remaining planned FY2027 issuance and mandatory-convertible dilution are still excluded, and base free cash flow remains negative until FY2030.
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Latest: $41.83B (2032Q1E)
| Period | Value |
|---|---|
| 2025Q1 | $13.31B |
| 2025Q2 | $14.06B |
| 2025Q3 | $14.13B |
| 2025Q4 | $15.90B |
| 2026Q1 | $14.93B |
| 2026Q2 | $16.06B |
| 2026Q3 | $17.19B |
| 2026Q4 | $19.18B |
| 2027Q1 | $19.34B |
| 2027Q2E | $20.69B |
| 2027Q3E | $21.74B |
| 2027Q4E | $23.58B |
| 2028Q1E | $23.55B |
| 2028Q2E | $24.88B |
| 2028Q3E | $25.95B |
| 2028Q4E | $27.73B |
| 2029Q1E | $27.86B |
| 2029Q2E | $29.20B |
| 2029Q3E | $30.30B |
| 2029Q4E | $32.02B |
| 2030Q1E | $32.31B |
| 2030Q2E | $33.67B |
| 2030Q3E | $34.81B |
| 2030Q4E | $36.50B |
| 2031Q1E | $36.96B |
| 2031Q2E | $38.34B |
| 2031Q3E | $39.53B |
| 2031Q4E | $41.23B |
| 2032Q1E | $41.83B |
Where each case comes from
Bear case — primary sources
The primary sources this case is built from — filings, calls and posts. Where they are claims by an interested party rather than disclosures, every number in the Bear column is what happens if they are taken at face value.
Gross margin steps down in FY2027
The financing requirement
- Jun 10, 2026 In fiscal year 2027, Oracle expects to raise approximately $40 billion through a combination of debt and equity financing including its previously announced $20 billion at-the-market equity issuance.
- Jun 10, 2026 Free cash flow was negative $23.7 billion for fiscal year 2026 as Oracle continued to execute on investments to support the growth of its Cloud Infrastructure business.
Bull case — primary sources
The primary sources this case is built from — filings, calls and posts. Where they are claims by an interested party rather than disclosures, every number in the Bull column is what happens if they are taken at face value.
The multi-year OCI revenue schedule
Long-term CAGRs reconfirmed at Q4 FY2026
Prepaid and customer-supplied hardware reduce the capital Oracle must raise
Concentration case — primary sources
The primary sources this case is built from — filings, calls and posts. Where they are claims by an interested party rather than disclosures, every number in the Concentration column is what happens if they are taken at face value.
Q4 signings and customer concentration
The GPU renewal cohort
From cash flow to fair value
The published model, discounted at 9.5% a year with an exit multiple of 4.5x on revenue. The horizon and sliders above do not change this walk.
| Present value of free cash flow, 20 quarters | −$55.67B |
| Terminal-year revenue | $160.93B |
| Terminal-year EBITDA | $67.52B |
| Exit multiple, on revenue | 4.5x |
| Terminal value | $724.20B |
| Discounted at 9.5% a year, terminal value becomes | $460.03B |
| Share of enterprise value from the terminal | 114% |
| Enterprise value | $404.36B |
| Net cash | −$88.26B |
| Equity value | $316.10B |
| Shares | 3.00B |
| Fair value per share | $105.37 |
| Against the deployed price of $137.30, as of | −23% |
9.5% pays for an investment-grade mega-cap carrying $125.3B of debt, negative free cash flow and about $40B of planned FY2027 issuance, of which the $20B ATM equity sale completed in Q1. The 5.5x exit is a cloud-and-software blend at maturity, between the house marks for CRM at 4.5x and META at 6.0x.
Read the other way round: at $137.30 the market is paying 5.4x terminal-year revenue, holding every other assumption on this page fixed. That is the number to argue about.
The projected path
The published model's 20 quarters. The horizon and sliders above do not change this table.
| Quarter | Cloud infrastructure (OCI) | Cloud applications (SaaS) | Software support | Software license | Hardware | Services | Revenue | YoY | EBITDA | Capex | FCF | R40 | PV of FCF |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2027 Q2E | $8.51B | $4.26B | $4.82B | $827M | $875M | $1.39B | $20.69B | +29% | $8.52B | $17.04B | −$8.52B | −12 | −$8.33B |
| 2027 Q3E | $9.64B | $4.30B | $4.74B | $861M | $820M | $1.37B | $21.74B | +26% | $8.98B | $17.33B | −$8.35B | −12 | −$7.98B |
| 2027 Q4E | $10.79B | $4.33B | $4.66B | $1.42B | $1.02B | $1.36B | $23.58B | +23% | $9.87B | $17.46B | −$7.58B | −9 | −$7.08B |
| 2028 Q1E | $11.94B | $4.36B | $4.58B | $559M | $758M | $1.35B | $23.55B | +22% | $9.71B | $17.43B | −$7.72B | −11 | −$7.05B |
| 2028 Q2E | $13.10B | $4.39B | $4.50B | $703M | $852M | $1.34B | $24.88B | +20% | $10.31B | $17.31B | −$7.00B | −8 | −$6.25B |
| 2028 Q3E | $14.27B | $4.42B | $4.41B | $730M | $796M | $1.33B | $25.95B | +19% | $10.78B | $17.12B | −$6.34B | −5 | −$5.53B |
| 2028 Q4E | $15.45B | $4.45B | $4.33B | $1.20B | $986M | $1.32B | $27.73B | +18% | $11.62B | $16.88B | −$5.26B | −1 | −$4.49B |
| 2029 Q1E | $16.63B | $4.47B | $4.24B | $471M | $732M | $1.31B | $27.86B | +18% | $11.56B | $16.60B | −$5.05B | 0 | −$4.21B |
| 2029 Q2E | $17.83B | $4.49B | $4.15B | $592M | $822M | $1.31B | $29.20B | +17% | $12.15B | $16.32B | −$4.17B | +3 | −$3.40B |
| 2029 Q3E | $19.04B | $4.51B | $4.06B | $614M | $767M | $1.30B | $30.30B | +17% | $12.63B | $16.03B | −$3.40B | +5 | −$2.71B |
| 2029 Q4E | $20.25B | $4.53B | $3.98B | $1.01B | $949M | $1.30B | $32.02B | +15% | $13.44B | $15.76B | −$2.32B | +8 | −$1.81B |
| 2030 Q1E | $21.48B | $4.55B | $3.89B | $395M | $704M | $1.30B | $32.31B | +16% | $13.46B | $15.49B | −$2.03B | +10 | −$1.55B |
| 2030 Q2E | $22.72B | $4.56B | $3.80B | $496M | $791M | $1.29B | $33.67B | +15% | $14.06B | $15.26B | −$1.20B | +12 | −$894M |
| 2030 Q3E | $23.97B | $4.58B | $3.72B | $514M | $737M | $1.29B | $34.81B | +15% | $14.55B | $15.05B | −$491M | +13 | −$357M |
| 2030 Q4E | $25.23B | $4.59B | $3.64B | $844M | $912M | $1.29B | $36.50B | +14% | $15.34B | $14.87B | $400M | +15 | $284M |
| 2031 Q1E | $26.51B | $4.60B | $3.55B | $330M | $677M | $1.29B | $36.96B | +14% | $15.45B | $14.71B | $625M | +16 | $435M |
| 2031 Q2E | $27.80B | $4.61B | $3.47B | $414M | $759M | $1.28B | $38.34B | +14% | $16.06B | $14.60B | $1.24B | +17 | $843M |
| 2031 Q3E | $29.10B | $4.62B | $3.39B | $429M | $708M | $1.28B | $39.53B | +14% | $16.58B | $14.51B | $1.75B | +18 | $1.16B |
| 2031 Q4E | $30.42B | $4.63B | $3.31B | $705M | $876M | $1.28B | $41.23B | +13% | $17.35B | $14.47B | $2.45B | +19 | $1.59B |
| 2032 Q1E | $31.75B | $4.64B | $3.23B | $276M | $650M | $1.28B | $41.83B | +13% | $17.54B | $14.45B | $2.63B | +19 | $1.67B |
Every row is projected. A year-over-year change is shown only where the quarter it compares against exists — an em dash means there is no comparable quarter, not a flat year.
Model revisions
Assumptions are marked to reality as each quarter prints. Every change is appended here, with the fair value the model produced at the time, so the model's own history stays visible.
| Date | Fair value then | Note |
|---|---|---|
| 2026-09-10 | — | Rolled the basis to fiscal 2027 Q1 from the 10 September release: all six revenue lines appended (total $19,345M), shares 3,000M diluted, net debt $88.3B, price $161.63 at the 9 September close. OCI re-anchored at an inferred 2,850 MW live (850 MW delivered in the quarter) and $2.66M per megawatt-quarter falling out of the disclosed $7,388M. Drivers, economics, scenarios and valuation multiples otherwise unchanged. |
| 2026-08-27 | — | Added two-year, trend-adjusted seasonality to software license and hardware. Replaced the artificial first-quarter growth shocks with underlying annual rates: -2.3% quarterly for license (about -9% annually) and +1.2% for hardware (about +5%). OCI and cloud applications remain driven by capacity and recurring growth rather than calendar factors. |
| 2026-08-23 | — | First cut, built from the scope-model intake brief on the fiscal 2026 Q4 basis. |