Oracle has its $20 billion. What does the funding cost?

Oracle closed a $10 billion stock sale and a $10 billion bond sale on November 4, completing the funding mix it announced a week earlier. Management had described the $20 billion as its last additional capital raise through fiscal 2030, excluding the refinancing of existing debt.

Research by Ticker Byline shows that the five new bond series carry about $777 million a year in cash interest while they remain outstanding. We calculated the total by applying each series' fixed rate to its principal.

The stock sale adds 86.2 million common shares at $116 each. That is a 2.85% increase against the historical August 31 share count used in the offering documents. Oracle receives new capital in exchange, while existing owners hold a smaller percentage of the expanded share base.

The cash arrives before the full interest bill

The bonds have fixed coupons ranging from 7% to 8.65% and mature between 2029 and 2046. Interest payments start in February and May 2027.

The $20 billion headline is also a gross amount. Together, the offerings produce about $19.84 billion after underwriting and bond issue-price discounts, before other offering expenses.

Oracle's stated uses include capital spending, debt repayment, investments or acquisitions, dividends and share repurchases.

Customers are already helping fund the build-out

Oracle's latest reported quarter, which ended August 31, shows why the timing of funding matters. Operating cash flow reached $23.1 billion, including $11.4 billion of customer prepayments with a financing component.

Those customers supplied cash before Oracle delivered the corresponding services. Capital spending was $28.5 billion, leaving negative free cash flow of $5.4 billion after subtracting spending from operating cash flow.

The business was growing quickly during that quarter. Cloud infrastructure revenue rose 121% from a year earlier to $7.4 billion, while group operating income increased 57% to $6.7 billion. Oracle is spending ahead of revenue from the capacity it is building.

At its October investor day, Oracle said vendor financing, customer-supplied hardware and prepayments would reduce its upfront cash requirements. That model underpins its expectation of positive free cash flow in the second half of fiscal 2028 and at least $30 billion of free cash flow in fiscal 2029.

The funding plan now has an execution test

With the announced stock-and-bond mix completed, the next milestones are delivering capacity and reaching that cash-flow timeline. The new debt creates a recurring payment obligation as the investment program develops.

The build-out also reaches power infrastructure. Our analysis of DTE's data-center investment plan examines the capital that a utility needs as demand from large computing customers grows.

The Oracle company profile tracks the completed financing, the latest financial results and management's longer-term targets.