...May 31, 2023 The company's 3.5x leverage target is critical for the rating. Oracle Corp. defined its target in November 2022 following years of deploying excess cash to shareholders and executing leveraged share buybacks. S&P Global Ratings believes Oracle's commitment to keeping share buybacks at $600 million per quarter or lower until gross leverage reaches 3.5x will be sufficient to achieve its goal in fiscal 2024 (ending in May). We believe maintaining investment-grade ratings is important because managing a capital structure this large in the high-yield market would be difficult. Accelerating constant currency revenue growth puts Oracle on the path to achieving its fiscal 2026 targets. Oracle's 2026 targets entail high-single-digit percentage revenue growth and 300 basis points of margin expansion. Organic constant currency revenue growth was 6%-10% over the past six quarters. Converting its on-premises customers to the cloud typically entails a doubling of revenue because they get...
