Oracle is under pressure from more than $100 billion in debt and massive layoffs as it pushes ahead with Larry Ellison’s 3-step transformation
$400 billion enterprise software and cloud infrastructure giant Seer It is on the hot seat as earnings decline in the fiscal third quarter on Tuesday amid a focus on heavy borrowing and negative free cash flow.
Top analysts to set the stage to wait Nearly 20% increase in quarterly revenues to roughly $17 billion; This is in line with Oracle’s forecast for 19% to 21% growth over the previous year. Earnings per share, excluding certain items, are expected to increase approximately 16% to $1.71. But under the hood? There’s a lot more going on, and these issues floating around have helped its shares fall nearly 20% so far in 2026.
Oracle’s stock prices after it reports results on Tuesday will largely depend on which story Wall Street chooses to focus on.
First, layoffs. Last quarter Oracle announced 2026 restructuring plan It said it was expected to cost the company up to $1.6 billion, mainly due to “employee severance costs.” Of that $1.6 billion, Oracle recognized approximately $826 million as charges against the plan; That means Oracle still has $788 million left. Bloomberg reported Last week, Oracle expected to cut thousands of jobs as it rebalances its workforce and moves further in its transition from an enterprise software licensing company to a cloud infrastructure provider that competes with the cloud infrastructure provider. Microsoft And Amazon.
Meanwhile, Oracle also turned to bonds to raise capital. other hyperscalersIt completed its last fiscal year with $92.6 billion. total debt outstanding. In the first half of the current financial year, this figure rose to $108.1 billion following a major issuance of $18 billion in September 2025. notes Oracle, with maturities ranging from 2030 to 2065, also disclosed $248 billion in future data center lease obligations not yet on its balance sheet, which it hopes will translate into customer demand and increased revenues.
Co-CEO in the last quarter Clay Magouyrk sought to reassure investors about future additional capital needs. Magouyrk said the company is determined to maintain its performance investment grade debt note. Moody’s odds Two tiers above junk and lower than Amazon, Oracle Baa2 Alphabet, Metaand Microsoft.
“We read a lot of analyst reports and a lot of reports that showed an expectation of over $100 billion for Oracle to go out and complete these builds,” Magouyrk said last quarter, referring to outside estimates of the company’s planned capital expenditures. “And based on what we’re seeing right now, we expect we’re going to need as much money, if not less, than that amount to fund this structure.”
