Oracle posted record revenue, but its earnings highlighted how the company is financing its AI infrastructure expansion. CFO Hilary Maxson said remaining performance obligations, or RPO, rose $26 billion from Q4, with most new contracts structured through prepayments or bring-your-own-hardware arrangements that do not require incremental capital from Oracle. The additional RPO is not expected to affect capex or revenue until fiscal 2028 or later. Co-CEO Clay Magouyrk said Oracle closed more than $30 billion of additional AI contracts in Q1 without requiring additional capital from the company. Management described the funding approach as an ongoing strategy in which new capacity does not necessarily become Oracle capex. Maxson said completed projects can reach free cash flow conversion of something like 100% to post-tax EBITDA shortly after ramp-up, making the business somewhat self-funding over time. Oracle spent $28 billion on capex during the quarter, producing negative free cash flow of $5 billion. Full-year capex guidance remains $90 billion to $95 billion, including no more than $70 billion in net cash capex. Management expects about half of RPO to convert into sales over the next 36 months, with prepayments and bring-your-own-hardware structures moving financing exposure toward customers, suppliers and lessors. Oracle shares were up 0.55% at $153.78 at publication Friday, according to Benzinga Pro.