ORCL 10-Q
Oracle Corp (ORCL)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
or
For the transition period from ____________ to ____________
Commission File Number:
(Exact name of registrant as specified in its charter)
|
||
(State or other jurisdiction of incorporation or organization) |
|
(I.R.S. Employer Identification No.) |
|
|
|
|
||
(Address of principal executive offices) |
|
(Zip Code) |
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
|
Accelerated filer ☐ |
|
Non-accelerated filer ☐ |
|
Smaller reporting company |
|
|
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
The number of shares of registrant’s common stock outstanding as of September 7, 2026 was:
ORACLE CORPORATION
FORM 10-Q QUARTERLY REPORT
TABLE OF CONTENTS
|
|
|
|
Page |
|
|
|
|
|
PART I. |
|
|
1 |
|
|
|
|
|
|
Item 1. |
|
|
1 |
|
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheets as of August 31, 2026 and May 31, 2026 |
|
1 |
|
|
|
|
|
|
|
Condensed Consolidated Statements of Operations for the Three Months Ended August 31, 2026 and 2025 |
|
2 |
|
|
|
|
|
|
|
|
3 |
|
|
|
|
|
|
|
|
|
4 |
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows for the Three Months Ended August 31, 2026 and 2025 |
|
5 |
|
|
|
|
|
|
|
|
6 |
|
|
|
|
|
|
Item 2. |
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|
21 |
|
|
|
|
|
Item 3. |
|
|
35 |
|
|
|
|
|
|
Item 4. |
|
|
36 |
|
|
|
|
|
|
PART II. |
|
|
37 |
|
|
|
|
|
|
Item 1. |
|
|
37 |
|
|
|
|
|
|
Item 1A. |
|
|
37 |
|
|
|
|
|
|
Item 2. |
|
|
37 |
|
|
|
|
|
|
Item 5. |
|
|
37 |
|
|
|
|
|
|
Item 6. |
|
|
38 |
|
|
|
|
|
|
|
|
|
39 |
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
ORACLE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
As of August 31, 2026 and May 31, 2026
(Unaudited)
(in millions, except per share data) |
|
August 31, |
|
|
May 31, |
|
||
ASSETS |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Marketable securities |
|
|
|
|
|
|
||
Trade receivables, net of allowances for credit losses of $ |
|
|
|
|
|
|
||
Prepaid expenses and other current assets |
|
|
|
|
|
|
||
Total current assets |
|
|
|
|
|
|
||
Non-current assets: |
|
|
|
|
|
|
||
Property, plant and equipment, net |
|
|
|
|
|
|
||
Operating lease right-of-use assets |
|
|
|
|
|
|
||
Goodwill |
|
|
|
|
|
|
||
Deferred tax assets |
|
|
|
|
|
|
||
Other non-current assets |
|
|
|
|
|
|
||
Total non-current assets |
|
|
|
|
|
|
||
Total assets |
|
$ |
|
|
$ |
|
||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Notes payable and other borrowings, current |
|
$ |
|
|
$ |
|
||
Accounts payable |
|
|
|
|
|
|
||
Accrued compensation and related benefits |
|
|
|
|
|
|
||
Deferred revenues |
|
|
|
|
|
|
||
Other current liabilities |
|
|
|
|
|
|
||
Total current liabilities |
|
|
|
|
|
|
||
Non-current liabilities: |
|
|
|
|
|
|
||
Notes payable and other borrowings, non-current |
|
|
|
|
|
|
||
Income taxes payable |
|
|
|
|
|
|
||
Operating lease liabilities |
|
|
|
|
|
|
||
Other non-current liabilities |
|
|
|
|
|
|
||
Total non-current liabilities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|||
Oracle Corporation stockholders’ equity: |
|
|
|
|
|
|
||
Preferred stock, $ |
|
|
|
|
|
|
||
Common stock, $ |
|
|
|
|
|
|
||
Accumulated deficit |
|
|
( |
) |
|
|
( |
) |
Accumulated other comprehensive loss |
|
|
( |
) |
|
|
( |
) |
Total Oracle Corporation stockholders’ equity |
|
|
|
|
|
|
||
Noncontrolling interests |
|
|
|
|
|
|
||
Total stockholders’ equity |
|
|
|
|
|
|
||
Total liabilities and stockholders’ equity |
|
$ |
|
|
$ |
|
||
See notes to condensed consolidated financial statements.
1
ORACLE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended August 31, 2026 and 2025
(Unaudited)
|
|
Three Months Ended |
|
|||||
(in millions, except per share data) |
|
2026 |
|
|
2025 |
|
||
Revenues: |
|
|
|
|
|
|
||
Cloud |
|
$ |
|
|
$ |
|
||
Software |
|
|
|
|
|
|
||
Hardware |
|
|
|
|
|
|
||
Services |
|
|
|
|
|
|
||
Total revenues |
|
|
|
|
|
|
||
Operating expenses: |
|
|
|
|
|
|
||
Cloud and software(1) |
|
|
|
|
|
|
||
Hardware(1) |
|
|
|
|
|
|
||
Services(1) |
|
|
|
|
|
|
||
Sales and marketing |
|
|
|
|
|
|
||
Research and development |
|
|
|
|
|
|
||
General and administrative |
|
|
|
|
|
|
||
Amortization of intangible assets |
|
|
|
|
|
|
||
Restructuring and other |
|
|
|
|
|
|
||
Total operating expenses |
|
|
|
|
|
|
||
Operating income |
|
|
|
|
|
|
||
Interest expense |
|
|
( |
) |
|
|
( |
) |
Non-operating income, net |
|
|
|
|
|
|
||
Income before income taxes |
|
|
|
|
|
|
||
Provision for income taxes |
|
|
|
|
|
|
||
Net income |
|
$ |
|
|
$ |
|
||
Preferred stock dividends |
|
|
|
|
|
|
||
Net income available to common shareholders |
|
$ |
|
|
$ |
|
||
Earnings per share attributable to common shareholders: |
|
|
|
|
|
|
||
Basic |
|
$ |
|
|
$ |
|
||
Diluted |
|
$ |
|
|
$ |
|
||
Weighted average common shares outstanding: |
|
|
|
|
|
|
||
Basic |
|
|
|
|
|
|
||
Diluted |
|
|
|
|
|
|
||
See notes to condensed consolidated financial statements.
2
ORACLE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Three Months Ended August 31, 2026 and 2025
(Unaudited)
|
|
Three Months Ended |
|
|||||
(in millions) |
|
2026 |
|
|
2025 |
|
||
Net income |
|
$ |
|
|
$ |
|
||
Other comprehensive (loss) income, net of tax: |
|
|
|
|
|
|
||
Net foreign currency translation (losses) gains |
|
|
( |
) |
|
|
|
|
Net unrealized gains (losses) on cash flow hedges |
|
|
|
|
|
( |
) |
|
Other, net |
|
|
( |
) |
|
|
|
|
Total other comprehensive (loss) income, net |
|
|
( |
) |
|
|
|
|
Comprehensive income |
|
$ |
|
|
$ |
|
||
See notes to condensed consolidated financial statements.
3
ORACLE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
For the Three Months Ended August 31, 2026 and 2025
(Unaudited)
|
|
Three Months Ended |
|
|||||
(in millions, except per share data) |
|
2026 |
|
|
2025 |
|
||
Preferred stock and additional paid in capital |
|
|
|
|
|
|
||
Balance, beginning and end of period |
|
$ |
|
|
$ |
|
||
Common stock and additional paid in capital |
|
|
|
|
|
|
||
Balance, beginning of period |
|
$ |
|
|
$ |
|
||
Common stock issued via at-the-market program |
|
|
|
|
|
|
||
Net share issuances from employee stock programs |
|
|
|
|
|
|
||
Stock-based compensation |
|
|
|
|
|
|
||
Repurchases of common stock |
|
|
|
|
|
( |
) |
|
Other, net |
|
|
( |
) |
|
|
|
|
Balance, end of period |
|
$ |
|
|
$ |
|
||
Accumulated deficit |
|
|
|
|
|
|
||
Balance, beginning of period |
|
$ |
( |
) |
|
$ |
( |
) |
Repurchases of common stock |
|
|
|
|
|
( |
) |
|
Preferred stock dividends |
|
|
( |
) |
|
|
|
|
Common stock dividends |
|
|
( |
) |
|
|
( |
) |
Net income |
|
|
|
|
|
|
||
Balance, end of period |
|
$ |
( |
) |
|
$ |
( |
) |
Other stockholders’ equity, net |
|
|
|
|
|
|
||
Balance, beginning of period |
|
$ |
( |
) |
|
$ |
( |
) |
Other, net |
|
|
( |
) |
|
|
( |
) |
Balance, end of period |
|
$ |
( |
) |
|
$ |
( |
) |
Total stockholders’ equity |
|
$ |
|
|
$ |
|
||
Preferred stock dividends declared per share |
|
$ |
|
|
$ |
|
||
Common stock dividends declared per share |
|
$ |
|
|
$ |
|
||
See notes to condensed consolidated financial statements.
4
ORACLE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended August 31, 2026 and 2025
(Unaudited)
|
|
Three Months Ended |
|
|||||
(in millions) |
|
2026 |
|
|
2025 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net income |
|
$ |
|
|
$ |
|
||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation |
|
|
|
|
|
|
||
Amortization of intangible assets |
|
|
|
|
|
|
||
Deferred income taxes |
|
|
( |
) |
|
|
|
|
Stock-based compensation |
|
|
|
|
|
|
||
Other, net |
|
|
( |
) |
|
|
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Increase in trade receivables, net |
|
|
( |
) |
|
|
( |
) |
Decrease in prepaid expenses and other assets |
|
|
|
|
|
|
||
Decrease in accounts payable and other liabilities |
|
|
( |
) |
|
|
( |
) |
Increase (decrease) in income taxes payable |
|
|
|
|
|
( |
) |
|
Increase in deferred revenues from customer prepayments with significant financing component |
|
|
|
|
|
|
||
Increase in other deferred revenues |
|
|
|
|
|
|
||
Net cash provided by operating activities |
|
|
|
|
|
|
||
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchases of marketable securities and other investments |
|
|
( |
) |
|
|
( |
) |
Proceeds from sales and maturities of marketable securities and other investments |
|
|
|
|
|
|
||
Capital expenditures |
|
|
( |
) |
|
|
( |
) |
Net cash used for investing activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Proceeds from issuances of common stock via at-the-market program, net of issuance costs |
|
|
|
|
|
|
||
Net proceeds from employee stock programs |
|
|
|
|
|
|
||
Payments of dividends to stockholders |
|
|
( |
) |
|
|
( |
) |
Repayments of commercial paper, net |
|
|
|
|
|
( |
) |
|
(Repayments of) proceeds from short-term financing related to capital expenditures, net |
|
|
( |
) |
|
|
|
|
Repayments of senior notes, term loan credit agreements and other borrowings |
|
|
( |
) |
|
|
( |
) |
Other financing activities, net |
|
|
( |
) |
|
|
( |
) |
Net cash provided by financing activities |
|
|
|
|
|
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
|
|
|
|
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
|
|
|
|
( |
) |
|
Cash, cash equivalents and restricted cash at beginning of period |
|
|
|
|
|
|
||
Cash, cash equivalents and restricted cash at end of period |
|
$ |
|
|
$ |
|
||
Non-cash investing activities: |
|
|
|
|
|
|
||
Unpaid capital expenditures |
|
$ |
|
|
$ |
|
||
See notes to condensed consolidated financial statements.
5
ORACLE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2026
(Unaudited)
Basis of Presentation
We have prepared the condensed consolidated financial statements included herein pursuant to the rules and regulations of the United States (U.S.) Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and regulations. However, we believe that the disclosures herein are adequate to ensure the information presented is not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2026.
We believe that all necessary adjustments, which consisted only of normal recurring items, have been included in the accompanying financial statements to present fairly the results of the interim periods. The results of operations for the interim periods presented are not necessarily indicative of the operating results to be expected for any subsequent interim period or for the fiscal year ending May 31, 2027. We reclassed certain prior period balances presented in our condensed consolidated financial statements to conform to the current period’s presentation. Such reclassifications did not affect total revenue, income from operations, net income, total assets or cash flows.
We believe that our current cash, cash equivalents and marketable securities balances, together with cash generated from operations and available financing arrangements, will be sufficient to meet our working capital, committed capital expenditures and contractual obligations for at least the next twelve months. Thereafter, we expect that our existing sources of liquidity, together with potential access to additional financing, will continue to be sufficient for the foreseeable future. Further, we have flexibility in managing the timing of certain discretionary capital expenditures.
In the first quarter of fiscal 2027, we
Cash, Cash Equivalents and Restricted Cash
Restricted cash as of August 31, 2026 was $
Remaining Performance Obligations from Contracts with Customers
Trade receivables, net of allowances for credit losses, and deferred revenues are reported net of related uncollected deferred revenues in our condensed consolidated balance sheets as of August 31, 2026 and May 31, 2026. The revenues recognized during the three months ended August 31, 2026 and 2025 that were included in the opening deferred revenues balances as of May 31, 2026 and 2025 were approximately $
6
ORACLE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
August 31, 2026
(Unaudited)
Remaining performance obligations were $
Customer Prepayments and Sales of Financing Receivables
Certain of our customer contracts include a significant financing component either because the customer has made significant prepayments before the corresponding performance obligations are delivered or because we have provided long-term payment plans to the customer. In determining whether a contract contains a significant financing component, we consider: (1) the expected timing between the transfer of goods and services and customer payment; (2) the difference between the promised consideration and the cash selling price; and (3) prevailing market interest rates. We apply the practical expedient and do not adjust the promised amount of consideration for the effects of a significant financing component when the period between the transfer of goods or services and customer payment is one year or less. During the first quarter of fiscal 2027, we received $
We offer certain of our customers the option to acquire certain of our products and services offerings through separate long-term payment contracts. We generally sell these contracts that we have financed for our customers on a non-recourse basis to financial institutions within 90 days of the contracts’ dates of execution. We record the transfers of amounts due from customers to financial institutions as sales of financing receivables because we are considered to have surrendered control of these financing receivables. Financing receivables sold to financial institutions were $
Non-Marketable Investments
Our non-marketable equity securities and debt investments totaled $
Non-Operating Income, net
Non-operating income, net consists primarily of interest income, net foreign currency exchange losses, the noncontrolling interests in the net profits of our majority-owned subsidiaries (primarily Oracle Financial Services Software Limited and Oracle Corporation Japan), net gains and losses related to marketable and non-marketable investments, including net gains and losses attributable to equity method investments and net other income and expenses, including net gains and losses from our investment portfolio related to our deferred compensation plan, for which an equal and offsetting amount was recorded to our operating expenses during the same period, and non-service net periodic pension income and losses.
7
ORACLE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
August 31, 2026
(Unaudited)
|
|
Three Months Ended |
|
|||||
(in millions) |
|
2026 |
|
|
2025 |
|
||
Interest income |
|
$ |
|
|
$ |
|
||
Foreign currency losses, net |
|
|
( |
) |
|
|
( |
) |
Noncontrolling interests in income |
|
|
( |
) |
|
|
( |
) |
Gains (losses) from marketable and non-marketable investments, net |
|
|
|
|
|
( |
) |
|
Other income, net |
|
|
|
|
|
|
||
Total non-operating income, net |
|
$ |
|
|
$ |
|
||
Recent Accounting Pronouncements
Income Statement: In November 2024, the Financial Accounting Standards Board (FASB) issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses and also issued subsequent guidance clarifying the effective date of the initial guidance (collectively, Subtopic 220-40), which enhances the disclosures required for expense disaggregation in our annual and interim consolidated financial statements. This guidance is effective for us for our annual reporting for fiscal 2028 and for interim period reporting beginning in fiscal 2029 on a prospective basis. Both early adoption and retrospective application are permitted. We are currently evaluating the impact of our pending adoption of Subtopic 220-40 on our consolidated financial statements.
We perform fair value measurements in accordance with FASB Accounting Standards Codification (ASC) 820, Fair Value Measurement (ASC 820). ASC 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at their fair values, we consider the principal or most advantageous market in which we would transact and consider assumptions that market participants would use when pricing the assets or liabilities, such as inherent risk, transfer restrictions and risk of nonperformance.
ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset’s or a liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 establishes three levels of inputs that may be used to measure fair value:
8
ORACLE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
August 31, 2026
(Unaudited)
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Our assets and liabilities measured at fair value on a recurring basis consisted of the following (Level 1 and Level 2 inputs are defined above):
|
|
August 31, 2026 |
|
|
May 31, 2026 |
|
||||||||||||||||||
|
|
Fair Value Measurements |
|
|
|
|
|
Fair Value Measurements |
|
|
|
|
||||||||||||
(in millions) |
|
Level 1 |
|
|
Level 2 |
|
|
Total |
|
|
Level 1 |
|
|
Level 2 |
|
|
Total |
|
||||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Money market funds |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Time deposits and other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivative financial instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Our cash equivalents and marketable securities investments consist of money market funds, time deposits and marketable equity securities. Marketable securities as presented per our condensed consolidated balance sheets included debt securities with original maturities at the time of purchase greater than three months and the remainder of the debt securities were included in cash and cash equivalents. We classify our marketable debt securities as available-for-sale debt securities at the time of purchase and reevaluate such classification as of each balance sheet date. As of August 31, 2026 and May 31, 2026, all of our marketable debt securities investments mature within one year. Our valuation techniques used to measure the fair values of our instruments that were classified as Level 1 in the table above were derived from quoted market prices and active markets for these instruments that exist. Our valuation techniques used to measure the fair values of Level 2 instruments listed in the table above were derived from the following: non-binding market consensus prices that were corroborated by observable market data, quoted market prices for similar instruments, or pricing models, such as discounted cash flow techniques, with all significant inputs derived from or corroborated by observable market data including reference rate yield curves, among others.
Based on the trading prices of the $
Property, plant and equipment, net consisted of the following:
(Dollars in millions) |
|
Estimated |
|
August 31, |
|
|
May 31, |
|
||
Computer, network, machinery and equipment |
|
|
$ |
|
|
$ |
|
|||
Buildings and improvements |
|
|
|
|
|
|
|
|||
Furniture, fixtures and other |
|
|
|
|
|
|
|
|||
Land |
|
— |
|
|
|
|
|
|
||
Construction in progress(2) |
|
— |
|
|
|
|
|
|
||
Total property, plant and equipment |
|
|
|
|
|
|
|
|||
Accumulated depreciation |
|
|
|
|
( |
) |
|
|
( |
) |
Total property, plant and equipment, net |
|
|
|
$ |
|
|
$ |
|
||
9
ORACLE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
August 31, 2026
(Unaudited)
Depreciation expenses on property, plant and equipment during the three months ended August 31, 2026 and 2025 were $
The restructuring and other expenses line item on our condensed consolidated statement of operations consist of restructuring expenses for employee severance costs, contract termination costs and certain other exit costs to improve our cost structure prospectively. The restructuring expenses resulted from the execution of management-approved restructuring plans that were developed for certain strategic initiatives and/or to improve operational efficiencies, as further described below; and other operating expenses, net.
|
|
Three Months Ended |
|
|||||
(in millions) |
|
2026 |
|
|
2025 |
|
||
Restructuring |
|
$ |
|
|
$ |
|
||
Other, net |
|
|
( |
) |
|
|
|
|
Total restructuring and other expenses |
|
$ |
|
|
$ |
|
||
Fiscal 2026 Oracle Restructuring Plan
During fiscal 2026, our management approved, committed to, initiated and further supplemented plans to restructure to implement certain strategic measures and further improve operational efficiencies, including through the adoption and integration of artificial intelligence technologies across certain functions and other operational activities (2026 Restructuring Plan). The total estimated restructuring costs associated with the 2026 Restructuring Plan are up to $
10
ORACLE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
August 31, 2026
(Unaudited)
Summary of All Plans
|
|
Accrued |
|
|
Three Months Ended August 31, 2026 |
|
|
Accrued |
|
|
Total |
|
|
Total |
|
|||||||||||||||||
(in millions) |
|
May 31, |
|
|
Initial |
|
|
Adj. to |
|
|
Cash |
|
|
Others(5) |
|
|
August 31, |
|
|
Accrued |
|
|
Program |
|
||||||||
2026 Restructuring Plan(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cloud and software |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Hardware |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Services |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total 2026 Restructuring Plan |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Total other restructuring plans(6) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
|
|
|
|
|
||||||
Total restructuring plans |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
|
|
|
|
|
|||||||
Deferred revenues consisted of the following:
(in millions) |
|
August 31, |
|
|
May 31, |
|
||
Cloud |
|
$ |
|
|
$ |
|
||
Software |
|
|
|
|
|
|
||
Hardware |
|
|
|
|
|
|
||
Services |
|
|
|
|
|
|
||
Deferred revenues, current |
|
|
|
|
|
|
||
Deferred revenues, non-current (in other non-current liabilities) |
|
|
|
|
|
|
||
Total deferred revenues |
|
$ |
|
|
$ |
|
||
Deferred cloud revenues, deferred software revenues and deferred hardware revenues substantially represent customer payments made in advance for cloud or support contracts that are billed in advance with corresponding revenues generally being recognized ratably or based upon customer usage over the respective contractual periods. Deferred services revenues include prepayments for our services business and revenues for these services are generally recognized as the services are performed.
11
ORACLE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
August 31, 2026
(Unaudited)
Leases
We have operating and finance leases that primarily relate to our data centers and real estate facilities.
The components of lease expense were as follows:
|
|
Three Months Ended |
|
|||||
(in millions) |
|
2026 |
|
|
2025 |
|
||
Operating lease expense |
|
$ |
|
|
$ |
|
||
Finance lease expense: |
|
|
|
|
|
|
||
Amortization of ROU assets |
|
$ |
|
|
$ |
|
||
Interest on lease liabilities |
|
|
|
|
|
|
||
Total finance lease expense |
|
$ |
|
|
$ |
|
||
Supplemental balance sheet information related to leases was as follows:
(in millions) |
|
August 31, |
|
|
May 31, |
|
||
Operating leases: |
|
|
|
|
|
|
||
|
$ |
|
|
$ |
|
|||
Operating lease liabilities: |
|
|
|
|
|
|
||
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|||
Total operating lease liabilities |
|
$ |
|
|
$ |
|
||
Finance leases: |
|
|
|
|
|
|
||
|
$ |
|
|
$ |
|
|||
Finance lease liabilities: |
|
|
|
|
|
|
||
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|||
Total finance lease liabilities |
|
$ |
|
|
$ |
|
||
Supplemental cash flow information related to leases was as follows:
|
|
Three Months Ended |
|
|||||
(in millions) |
|
2026 |
|
|
2025 |
|
||
Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
|
|
|
||
Operating leases |
|
$ |
|
|
$ |
|
||
Finance leases |
|
$ |
|
|
$ |
|
||
ROU assets obtained in exchange for lease obligations: |
|
|
|
|
|
|
||
Operating leases |
|
$ |
|
|
$ |
|
||
Finance leases |
|
$ |
|
|
$ |
|
||
12
ORACLE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
August 31, 2026
(Unaudited)
Maturities of lease liabilities were as follows as of August 31, 2026 (in millions):
|
|
Operating |
|
|
Finance |
|
||
Remainder of fiscal 2027 |
|
$ |
|
|
$ |
|
||
Fiscal 2028 |
|
|
|
|
|
|
||
Fiscal 2029 |
|
|
|
|
|
|
||
Fiscal 2030 |
|
|
|
|
|
|
||
Fiscal 2031 |
|
|
|
|
|
|
||
Fiscal 2032 |
|
|
|
|
|
|
||
Thereafter |
|
|
|
|
|
|
||
Total lease payments |
|
|
|
|
|
|
||
Less: imputed interest |
|
|
( |
) |
|
|
( |
) |
|
$ |
|
|
$ |
|
|||
As of August 31, 2026, we had $
Unconditional Obligations
In the ordinary course of business, we enter into certain unconditional purchase obligations with our suppliers. These are agreements that are enforceable and legally binding and specify terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the payment.
Remainder of fiscal 2027 |
|
$ |
|
|
Fiscal 2028 |
|
|
|
|
Fiscal 2029 |
|
|
|
|
Fiscal 2030 |
|
|
|
|
Fiscal 2031 |
|
|
|
|
Fiscal 2032 |
|
|
|
|
Thereafter |
|
|
|
|
Total |
|
$ |
|
Common Stock
On February 2, 2026, we entered into an equity distribution agreement with certain sales agents party thereto, as amended on June 23, 2026, pursuant to which we may sell shares of our common stock having aggregate sales proceeds of up to $
During the first quarter ended August 31, 2026, we fully utilized the ATM Program and issued
13
ORACLE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
August 31, 2026
(Unaudited)
indebtedness, future investments or acquisitions and payment of cash dividends on or repurchases of our common stock.
Common Stock Repurchases
Our Board of Directors (the Board) has approved a program for us to repurchase shares of our common stock. As of August 31, 2026, approximately $
Our stock repurchase authorization does not have an expiration date and the pace of any future repurchase activity will depend on factors such as our working capital needs, our cash requirements for capital expenditures, acquisitions and dividend payments, our debt repayment obligations or repurchases of our debt, our stock price and economic and market conditions. Our stock repurchases may be effected from time to time through open market purchases or pursuant to a Rule 10b5-1 trading plan. Our stock repurchase program may be accelerated, suspended, delayed or discontinued at any time.
Dividends on Preferred and Common Stock
In September 2026, the Board declared a quarterly cash dividend of $
Fiscal 2027 Stock‑Based Awards Activity and Compensation Expense
During the first quarter of fiscal 2027, we issued
The SOs were granted with an exercise price not less than the closing share price of our common stock on the grant date, generally become exercisable over
14
ORACLE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
August 31, 2026
(Unaudited)
Stock-based compensation expense is included in the following operating expense line items in our condensed consolidated statements of operations:
|
|
Three Months Ended |
|
|||||
(in millions) |
|
2026 |
|
|
2025 |
|
||
Cloud and software |
|
$ |
|
|
$ |
|
||
Hardware |
|
|
|
|
|
|
||
Services |
|
|
|
|
|
|
||
Sales and marketing |
|
|
|
|
|
|
||
Research and development |
|
|
|
|
|
|
||
General and administrative |
|
|
|
|
|
|
||
Total stock-based compensation |
|
$ |
|
|
$ |
|
||
Our effective tax rates for each of the periods presented are the result of the mix of income earned and losses incurred in various tax jurisdictions that apply a broad range of income tax rates. Our provision for income taxes varied from the tax computed at the U.S. federal statutory income tax rate for the periods presented primarily due to earnings in foreign operations, state taxes, the U.S. research and development tax credit, settlements with tax authorities, the tax effects of stock-based compensation, the Foreign Derived Intangible Income deduction and the tax effect of Global Intangible Low-Taxed Income. Our effective tax rates were
Our net deferred tax assets were $
Domestically, U.S. federal and state taxing authorities are currently examining income tax returns of Oracle and various acquired entities for years through fiscal 2025. Our U.S. federal income tax returns have been examined for all years prior to fiscal 2013 and, with some exceptions, we are no longer subject to audit for those periods. Our U.S. state income tax returns, with some exceptions, have been examined for all years prior to fiscal 2010, and we are no longer subject to audit for those periods.
Internationally, tax authorities for numerous non-U.S. jurisdictions are also examining or have examined returns of Oracle and various acquired entities for years through fiscal 2025. Many of the relevant tax years are at an advanced stage in examination or subsequent controversy resolution processes. With some exceptions, we are generally no longer subject to tax examinations in non-U.S. jurisdictions for years prior to fiscal 2001.
We are under audit by the U.S. Internal Revenue Service and various other domestic and foreign tax authorities with regards to income tax and indirect tax matters and are involved in various challenges and litigation in a number of countries, including, in particular, Australia, Brazil, Canada, Egypt, India, Indonesia, Ireland, Israel, Pakistan, Saudi Arabia, South Korea and Spain, where the amounts under controversy are significant. In some, although not all, cases, we have reserved for potential adjustments to our provision for income taxes and accrual of indirect taxes that may result from examinations by, or any negotiated agreements with, these tax authorities or final outcomes in judicial proceedings and we believe that the final outcome of these examinations, agreements or judicial proceedings will not have a material effect on our results of operations. If events occur which indicate payment of these amounts is unnecessary, the reversal of the liabilities would result in the recognition of benefits in the period
15
ORACLE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
August 31, 2026
(Unaudited)
we determine the liabilities are no longer necessary. If our estimates of the federal, state and foreign income tax liabilities and indirect tax liabilities are less than the ultimate assessment, it could result in a further charge to expense.
We believe that we have adequately provided under GAAP for outcomes related to our tax audits. However, there can be no assurances as to the possible outcomes or any related financial statement effect thereof.
ASC 280, Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision makers (CODMs) are our . We are organized by line of business and geographically. While
We have
Our cloud and software business engages in the sale, marketing and delivery of our enterprise applications and infrastructure technologies through cloud and on-premise deployment models, including our cloud offerings and our software offerings. Cloud revenues are generated from applications and infrastructure offerings that are typically contracted with customers directly, delivered to customers over time with our revenue recognition occurring over the contractual terms and renewed by customers upon completion of the contractual terms. Our cloud contracts provide customers with access to the latest technological updates as they become available and for which the customer contracted together with related technical support services over the contractual term. Software revenues represent:
(1) fees earned from granting customers software licenses, generally on a perpetual basis, to use our database and middleware and our applications software products within cloud and on-premise information technology (IT) environments. We generally recognize revenues at the point in time the software is made available to the customer to download and use, which typically is immediate upon signature of the license contract; and
(2) software support revenues, which are typically contracted with customers directly, billed to customers in advance, delivered to customers over time with our revenue recognition occurring over the contractual terms and renewed by customers upon completion of the contractual terms.
Software support contracts provide customers with technical support services and unspecified license upgrades and enhancements during the term of the support period. In each fiscal year, our cloud and software business’ contractual activities, excluding the impact of timing of booking of large contracts, are typically highest in our fourth fiscal quarter, and the related cash flows are typically highest in the following quarter (i.e., in the first fiscal quarter of the next fiscal year) as we receive payments from these contracts. Costs associated with our cloud and software business are largely infrastructure- and personnel-related, including the cost of providing our cloud and software offerings, salaries and commissions earned by our sales force for the sale of our cloud and software offerings and marketing program costs.
Our hardware business provides infrastructure technologies including Oracle Engineered Systems, servers, storage, industry-specific hardware, operating systems, virtualization, management and other hardware-related software to
16
ORACLE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
August 31, 2026
(Unaudited)
support diverse IT environments. Our hardware business also offers hardware support, which provides customers with software updates for the software components that are essential to the functionality of their hardware products and can also include product repairs, maintenance services and technical support services that are typically delivered and recognized ratably over the contractual term. Costs associated with our hardware business include the cost of hardware products, which consists of expenses for materials and labor used to produce these products by our internal manufacturing operations or by third-party manufacturers; the cost of materials used to repair customer products with eligible support contracts; the cost of labor and infrastructure to provide support services; and sales and marketing expenses, which are largely personnel-related and include variable compensation earned by our sales force for the sales of our hardware offerings.
Our services business provides services to customers and partners to help maximize the performance of their investments in Oracle applications and infrastructure technologies and include our consulting services and customer success services offerings. Costs associated with our services business consist primarily of personnel-related expenses, technology infrastructure expenditures, facilities expenses and external contractor expenses.
We do not track our assets for each business. Consequently, it is not practical to show assets by operating segment.
The following table presents summary results for each of our three businesses:
|
|
Three Months Ended |
|
|||||
(in millions) |
|
2026 |
|
|
2025 |
|
||
Cloud and software: |
|
|
|
|
|
|
||
Revenues |
|
$ |
|
|
$ |
|
||
Cloud and software expenses |
|
|
|
|
|
|
||
Sales and marketing expenses |
|
|
|
|
|
|
||
Margin(1) |
|
$ |
|
|
$ |
|
||
Hardware: |
|
|
|
|
|
|
||
Revenues |
|
$ |
|
|
$ |
|
||
Hardware expenses |
|
|
|
|
|
|
||
Sales and marketing expenses |
|
|
|
|
|
|
||
Margin(1) |
|
$ |
|
|
$ |
|
||
Services: |
|
|
|
|
|
|
||
Revenues |
|
$ |
|
|
$ |
|
||
Services expenses |
|
|
|
|
|
|
||
Margin(1) |
|
$ |
|
|
$ |
|
||
Totals: |
|
|
|
|
|
|
||
Revenues |
|
$ |
|
|
$ |
|
||
Expenses |
|
|
|
|
|
|
||
Margin(1) |
|
$ |
|
|
$ |
|
||
17
ORACLE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
August 31, 2026
(Unaudited)
The following table reconciles total margin for operating segments to income before income taxes:
|
|
Three Months Ended |
|
|||||
(in millions) |
|
2026 |
|
|
2025 |
|
||
Total margin for operating segments |
|
$ |
|
|
$ |
|
||
Research and development |
|
|
( |
) |
|
|
( |
) |
General and administrative |
|
|
( |
) |
|
|
( |
) |
Amortization of intangible assets |
|
|
( |
) |
|
|
( |
) |
Restructuring and other |
|
|
( |
) |
|
|
( |
) |
Stock-based compensation for operating segments |
|
|
( |
) |
|
|
( |
) |
Expense allocations and other, net |
|
|
( |
) |
|
|
( |
) |
Interest expense |
|
|
( |
) |
|
|
( |
) |
Non-operating income, net |
|
|
|
|
|
|
||
Income before income taxes |
|
$ |
|
|
$ |
|
||
Disaggregation of Revenues
We have considered information that is regularly reviewed by our CODMs in evaluating financial performance and disclosures presented outside of our financial statements in our earnings releases and used in investor presentations to disaggregate revenues to depict how the nature, amount, timing and uncertainty of revenues and cash flows are affected by economic factors. The principal category we use to disaggregate revenues is the nature of our products and services as presented in our condensed consolidated statements of operations.
The following table presents a summary of our total revenues by geographic region, which are generally based on the location of our customers:
|
|
Three Months Ended |
|
|||||
(in millions) |
|
2026 |
|
|
2025 |
|
||
Americas |
|
$ |
|
|
$ |
|
||
EMEA(1) |
|
|
|
|
|
|
||
Asia Pacific |
|
|
|
|
|
|
||
Total revenues |
|
$ |
|
|
$ |
|
||
The following table presents our cloud revenues by offerings:
|
|
Three Months Ended |
|
|||||
(in millions) |
|
2026 |
|
|
2025 |
|
||
Cloud applications |
|
$ |
|
|
$ |
|
||
Cloud infrastructure |
|
|
|
|
|
|
||
Total cloud revenues |
|
$ |
|
|
$ |
|
||
18
ORACLE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
August 31, 2026
(Unaudited)
The following table presents our software revenues by offerings:
|
|
Three Months Ended |
|
|||||
(in millions) |
|
2026 |
|
|
2025 |
|
||
Software license |
|
$ |
|
|
$ |
|
||
Software support |
|
|
|
|
|
|
||
Total software revenues |
|
$ |
|
|
$ |
|
||
Basic earnings per share is computed by dividing net income available to common shareholders for the period by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income available to common shareholders for the period by the weighted-average number of common shares outstanding during the period, plus the dilutive effect of outstanding restricted stock-based awards, stock options and shares issuable under the employee stock purchase plan as applicable pursuant to the treasury stock method and the dilutive effect of Mandatory Convertible Preferred Stock pursuant to the if-converted method.
|
|
Three Months Ended |
|
|||||
(in millions, except per share data) |
|
2026 |
|
|
2025 |
|
||
Net income |
|
$ |
|
|
$ |
|
||
Preferred stock dividends |
|
|
|
|
|
|
||
Net income available to common shareholders |
|
$ |
|
|
$ |
|
||
Weighted-average common shares outstanding |
|
|
|
|
|
|
||
Dilutive effect of employee stock plans |
|
|
|
|
|
|
||
Dilutive weighted-average common shares outstanding |
|
|
|
|
|
|
||
Basic earnings per share attributable to common shareholders |
|
$ |
|
|
$ |
|
||
Diluted earnings per share attributable to common shareholders |
|
$ |
|
|
$ |
|
||
Stock awards and shares excluded from calculation(1) |
|
|
|
|
|
|
||
Netherlands Privacy Class Action
On August 14, 2020, The Privacy Collective (TPC), a foundation having its registered office in Amsterdam, filed a purported class action lawsuit against Oracle Nederland B.V., Oracle Corporation and Oracle America, Inc. (the Oracle Defendants), Salesforce.com, Inc. and SFDC Netherlands B.V. in the District Court of Amsterdam. TPC alleges that the Oracle Defendants’ Data Management Platform product violates certain articles of the European Union Charter of Fundamental Rights, the General Data Protection Regulation (GDPR) and the Dutch Telecommunications Act (Telecommunicatiewet). TPC claims damages under a number of categories, including: “immaterial damages” (at a fixed amount of €
19
ORACLE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
August 31, 2026
(Unaudited)
and compensation for the costs of the litigation funder (
We filed our defense on March 3, 2021, and on December 29, 2021, the District Court issued a judgment, holding that all of TPC’s claims were deemed inadmissible because of fundamental procedural flaws. TPC filed an appeal with the Court of Appeal in Amsterdam challenging the District Court’s judgment, except for the claims regarding the alleged data breach, which were dropped. On June 18, 2024, the Court of Appeal overturned the District Court’s decision regarding admissibility, thus permitting the case to proceed. The Court of Appeal granted Oracle’s request for an interim appeal to the Supreme Court, and on July 17, 2026, the Supreme Court found that the Court of Appeal had applied the wrong standard for evaluating a class action and remanded the case to the Court of Appeal for further proceedings. On July 27, 2026, Oracle filed and served a Writ of Summons to the Court of Appeal with the first court date being on August 4, 2026 and a submission following referral by the Supreme Court due on September 15, 2026.
On September 24, 2025, TPC filed a motion in the District Court to lift the suspension of proceedings. On September 25, 2025, Oracle opposed that motion. The court has not yet ruled on that motion.
We believe that we have meritorious defenses against this action, including defenses to the quantum of damages claimed, and we will continue to vigorously defend it.
While the final outcome of this matter cannot be predicted with certainty, we do not believe that it will have a material impact on our financial position or results of operations.
Securities Class Action Regarding Oracle Cloud Infrastructure
On February 3, 2026, a putative class action, brought by an alleged stockholder of Oracle, was filed in the U.S. District Court for the District of Delaware, and on July 14, 2026, the plaintiff filed an amended class action complaint against us, our Chief Technology Officer, one of our Chief Executive Officers, two other Oracle executives, and one member of the Board. The plaintiff seeks to represent a class of Oracle stockholders, alleging that the defendants made or are responsible for false and misleading statements regarding Oracle’s cloud infrastructure business. The plaintiff seeks a ruling that this case may proceed as a class action and seeks damages, equitable relief, and attorneys’ fees and costs. The defendants must respond to the amended complaint by September 16, 2026. If the defendants move to dismiss the amended complaint, that motion will be fully briefed by December 18, 2026.
We believe that we have meritorious defenses against this action, and we will continue to vigorously defend it.
While the final outcome of this matter cannot be predicted with certainty, we do not believe that it will have a material impact on our financial position or results of operations.
Other Litigation
We are party to various other legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business, including proceedings and claims that relate to acquisitions we have completed or to companies we have acquired or are attempting to acquire. While the outcome of these matters cannot be predicted with certainty, we do not believe that the outcome of any of these matters, individually or in the aggregate, will result in losses that are materially in excess of amounts already recognized, if any.
20
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
This Quarterly Report on Form 10-Q (Quarterly Report) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact, including statements regarding our business, strategy, customer demand, products and services, results of operations, financial condition, cash flows, capital expenditures and other future events or results, are forward-looking statements. Words such as “anticipates,” “believes,” “continues,” “could,” “expects,” “future,” “intends,” “may,” “plans,” “projects,” “seeks,” “should,” “will” and similar expressions are intended to identify forward-looking statements.
These forward-looking statements are based on current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in “Risk Factors” included in documents we file from time to time with the United States (U.S.) Securities and Exchange Commission (the SEC), including in Part I, Item 1A beginning on page 15 of our Annual Report on Form 10-K for the fiscal year ended May 31, 2026 as well as in other sections of such report. The following Management’s Discussion and Analysis of Financial Condition and Results of Operations and other portions of this Quarterly Report should be read in conjunction with those filings.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements.
Business Overview
Oracle provides products and services that build, run and support enterprise information technology (IT) frameworks. Our products and services include enterprise applications and infrastructure offerings that incorporate and are enhanced by artificial intelligence (AI) technologies, including embedded AI-driven automation and analytics and generative AI capabilities. These offerings are delivered worldwide through a variety of flexible and interoperable IT deployment models. These models include cloud-based, on-premise and hybrid deployments. We provide choice and flexibility to our customers as to when and how they deploy Oracle applications and infrastructure technologies. Through our worldwide sales force and Oracle Partner Network, we sell to customers all over the world, including businesses of various sizes and industries, government agencies, educational institutions and resellers.
We have three businesses: cloud and software; hardware; and services; each of which is comprised of a single operating segment. The descriptions set forth below as a part of this Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations and the information contained within Note 9 of Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report provide additional information related to our businesses and operating segments and align to how our chief operating decision makers (CODMs), which are our Chief Executive Officers and Chief Technology Officer, view our operating results and allocate resources.
Cloud and Software Business
Our cloud and software business, which represented 88% of our total revenues on a trailing four-quarter basis, markets, sells and delivers a broad spectrum of enterprise applications and infrastructure technologies through our cloud and software offerings. Revenue streams included in our cloud and software business are:
21
Providing choice and flexibility to our customers as to when and how they deploy Oracle applications and infrastructure technologies are important elements of our corporate strategy. In recent periods, customer demand for our applications and infrastructure technologies delivered through our Oracle Cloud has increased. To address customer demand and enable customer choice, we have certain programs for customers to pivot their applications and infrastructure software licenses and the related software support to the Oracle Cloud for new deployments and to migrate to and expand with the Oracle Cloud for their existing workloads. The proportion of our cloud revenues relative to our total revenues has increased and we expect this trend to continue. Cloud revenues represented 60% and 48% of our total revenues for the three-month periods ended August 31, 2026 and 2025, respectively.
Our cloud and software business’ revenue growth is affected by many factors, including the strength of general economic and business conditions, including the effects of inflation, tariffs and trade policy, geopolitical conditions and other macroeconomic factors on customer demand; governmental budgetary constraints; the strategy for and competitive position of our offerings; customer satisfaction with our offerings; the continued renewal of our cloud and software support customer contracts by the customer contract base; substantially all customers continuing to purchase software support contracts in connection with their license purchases; the pricing of software support contracts sold in connection with the sales of licenses; the pricing, amounts and volumes of cloud services and licenses sold; our ability to manage Oracle Cloud capacity requirements to meet existing and prospective customer demand; and foreign currency rate fluctuations.
On a constant currency basis, we expect that our total cloud and software revenues generally will continue to increase due to:
We believe these factors should contribute to future growth in our cloud and software business’ total revenues, which should enable us to continue to make investments in research and development and our cloud operations to develop, improve, increase the capacity of and expand the geographic footprint of our cloud and software products and services. We continue to place significant emphasis, both domestically and internationally, on direct sales through our own sales force. We also continue to market certain of our cloud and software offerings through indirect channels.
Costs associated with our cloud and software business are included in cloud and software expenses and sales and marketing expenses. These costs are largely infrastructure- and personnel-related and include the cost of providing
22
our cloud and software support offerings, salaries and commissions earned by our sales force for the sale of our cloud and software offerings and marketing program costs.
Our cloud and software business’ margin has historically trended upward over the course of the four quarters within a particular fiscal year due to the historical upward trend of our cloud and software business’ revenues over those quarterly periods and because the majority of our costs for this business are generally fixed in the short term. The historical upward trend of our cloud and software business’ revenues over the course of the four quarters within a particular fiscal year is primarily due to the addition of new cloud and software support contracts to the customer contract base, which we generally recognize as revenues ratably or based upon customer usage over the respective contractual terms and the renewal of existing customers’ cloud and software support contracts over the course of each fiscal year, which we generally recognize as revenues in a similar manner; and the historical upward trend of our software license revenues, which we generally recognize at a point in time upon delivery; in each case over those four fiscal quarterly periods. Our margin for this business may be adversely impacted due to increases in supply chain and energy costs, the impact of tariffs and other trade barriers on our costs, and our ability to pass such costs on to customers; inflation; foreign currency rate fluctuations; governmental budgetary constraints; trade policy and other factors.
Hardware Business
Our hardware business, which represented 4% of our total revenues on a trailing four-quarter basis, provides a broad selection of enterprise hardware products and hardware-related software products including Oracle Engineered Systems, servers, storage, industry-specific hardware offerings, operating systems, virtualization, management and other hardware-related software and related hardware support. Each hardware product and its related software, such as an operating system or firmware, are highly interdependent and interrelated and are accounted for as a combined performance obligation. The revenues for this combined performance obligation are generally recognized at the point in time that the hardware product and its related software are delivered to the customer and ownership is transferred to the customer. Our hardware support offerings provide customers with unspecified software updates for software components that are essential to the functionality of our hardware products and associated software products. Our hardware support offerings can also include product repairs, maintenance services and technical support services. Hardware support contracts are entered into and renewed at the option of the customer, are generally priced as a percentage of the net hardware products fees and are generally recognized as revenues ratably as the hardware support services are delivered over the contractual term, which is generally one year. The majority of our hardware products are sold through indirect channels, including independent distributors and value-added resellers, and we also market and sell our hardware products through our direct sales force. We expect to continue to make investments in research and development to improve existing hardware products and services and to develop new hardware products and services.
Costs associated with our hardware business include the cost of hardware products, which consists of expenses for materials and labor used to produce these products generally by third-party manufacturers, warranty and related expenses and the impact of periodic changes in inventory valuation, including the impact of inventory determined to be excess and obsolete; the cost of materials used to repair customer products with eligible support contracts; the cost of labor and infrastructure to provide support services; and sales and marketing expenses, which are largely personnel-related and include variable compensation earned by our sales force for the sales of our hardware offerings.
Our quarterly hardware revenues are difficult to predict. Our hardware revenues, cost of hardware and hardware operating margins that we report are affected by many factors, including our manufacturing partners’ abilities to timely and cost-effectively manufacture or deliver a few large hardware transactions; our strategy for and the pricing and position of our hardware products relative to competitor offerings; customer demand for competing offerings, including cloud infrastructure offerings; the strength of general economic and business conditions, including the effects of inflation, tariffs and trade policy, geopolitical conditions and other macroeconomic factors on customer demand; governmental budgetary constraints; whether customers decide to purchase hardware support contracts at or in close proximity to the time of hardware product sale; the percentage of our hardware support contract customer base that renews its support contracts; the effect of tariffs and other trade barriers on our costs, and our ability to pass such costs on to customers; the geographic locations of our customers; the close association between hardware products, which have a finite life, and customer demand for related hardware support as hardware
23
products age; customer decisions to either maintain or upgrade their existing hardware infrastructure to newly developed technologies that are available; and foreign currency rate fluctuations.
Services Business
Our services business, which represented 8% of our total revenues on a trailing four-quarter basis, helps customers and partners maximize the performance of their investments in Oracle applications and infrastructure technologies. We believe that our services are differentiated based on our focus on Oracle technologies, extensive experience, broad sets of intellectual property and best practices. Our services offerings include consulting services and customer success services. Services revenues are generally recognized over time as the services are performed. The cost of providing our services consists primarily of personnel-related expenses, technology infrastructure expenditures, facilities expenses and external contractor expenses. Our services business has lower margins than our cloud and software and hardware businesses. Our services revenues are affected by many factors including our strategy for, and the competitive position of, our services; customer demand for our cloud and software and hardware offerings and the related services that we may market and sell in connection with these offerings; general economic conditions; governmental budgetary constraints; personnel reductions in our customers’ IT departments; tighter controls over customer discretionary spending; and foreign currency rate fluctuations.
Acquisitions
Our selective acquisition program is another element of our corporate strategy. Historically, we have invested billions of dollars to acquire a number of complementary companies, products, services and technologies. As compelling opportunities become available, we may acquire companies, products, services and technologies in furtherance of our corporate strategy. We estimate the financial impact of any potential acquisition with regard to earnings, operating margin, cash flows and return on invested capital targets, among others, before deciding to move forward with an acquisition.
Critical Accounting Estimates
Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires us to make certain estimates, judgments and assumptions that can affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. Critical accounting estimates are those estimates that involve a significant level of estimation uncertainty and have had, or are reasonably likely to have, a material impact on our financial condition or results of operations. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. To the extent that there are differences between these estimates, judgments or assumptions and actual results, our financial statements will be affected. We have critical accounting estimates in the area of income taxes.
During the first quarter of fiscal 2027, there were no significant changes to our critical accounting estimates. Refer to “Critical Accounting Estimates” under Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended May 31, 2026 for a more complete discussion of our critical accounting estimates.
Results of Operations
Presentation of Operating Segment Results and Other Financial Information
In our results of operations discussion below, we provide an overview of our total consolidated revenues, total consolidated operating expenses and total consolidated operating margin, all of which are presented on a GAAP basis. We also present a GAAP-based discussion below for substantially all of the other expense items as presented in our condensed consolidated statements of operations that are not directly attributable to our three businesses.
In addition, we discuss below the results of each of our three businesses—cloud and software, hardware and services—which are our operating segments as defined pursuant to ASC 280, Segment Reporting. The financial reporting for our three businesses that is presented below is presented in a manner that is consistent with that used by our CODMs. Our operating segment presentation below reflects revenues, direct costs and sales and marketing
24
expenses that correspond to and are directly attributable to each of our three businesses. We also utilize these inputs to calculate and present a segment margin for each of our three businesses in the discussion below.
Consistent with our internal management reporting processes, research and development expenses, general and administrative expenses, stock-based compensation expenses, amortization of intangible assets, certain other expense allocations, restructuring and other expenses, interest expense, non-operating income, net and provision for income taxes are not attributed to our three operating segments because our management does not view the performance of our three businesses including such items and/or it is impracticable to do so. Refer to “Supplemental Disclosure Related to Certain Charges” below for additional discussion of certain of these items and Note 9 of Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for more information about our operating segments and a reconciliation of the summations of total segment margin as presented in the discussion below to total income before income taxes as presented per our condensed consolidated statements of operations for all periods presented.
Constant Currency Presentation
Our international operations have provided, and are expected to continue to provide, a significant portion of each of our businesses’ revenues and expenses. As a result, each of our businesses’ revenues and expenses and our total revenues and expenses will continue to be affected by changes in the U.S. Dollar against major international currencies. In order to provide a framework for assessing how our underlying businesses performed, excluding the effects of foreign currency rate fluctuations, we compare the percent change in the results from one period to another period in this Quarterly Report using constant currency. To present this information, current and comparative prior period results for entities reporting in currencies other than U.S. Dollars are converted into U.S. Dollars at constant exchange rates (i.e., the rates in effect on May 31, 2026, which was the last day of our prior fiscal year) rather than the actual exchange rates in effect during the respective periods. For example, if an entity reporting in Euros had revenues of 1.0 million Euros from products sold on August 31, 2026 and 2025, our financial statements would reflect reported revenues of $1.17 million in the first quarter of fiscal 2027 (using 1.17 as the applicable average exchange rate for the period) and $1.16 million in the first quarter of fiscal 2026 (using 1.16 as the applicable average exchange rate for the period). The constant currency presentation, however, would translate the results for each of the first quarters of fiscal 2027 and 2026 using the May 31, 2026 exchange rate and indicate, in this example, no change in revenues between the periods compared. In each of the tables below, we present the percent change based on actual, unrounded results in reported currency and in constant currency.
25
Total Revenues and Operating Expenses
|
|
Three Months Ended August 31, |
|
|||||||||
|
|
|
|
|
Percent Change |
|
|
|
||||
(Dollars in millions) |
|
2026 |
|
|
Actual |
|
Constant |
|
2025 |
|
||
Total Revenues by Geography: |
|
|
|
|
|
|
|
|
|
|
||
Americas |
|
$ |
13,711 |
|
|
42% |
|
41% |
|
$ |
9,662 |
|
EMEA(1) |
|
|
3,726 |
|
|
7% |
|
7% |
|
|
3,481 |
|
Asia Pacific |
|
|
1,908 |
|
|
7% |
|
10% |
|
|
1,783 |
|
Total revenues |
|
|
19,345 |
|
|
30% |
|
30% |
|
|
14,926 |
|
Total Operating Expenses |
|
|
12,617 |
|
|
18% |
|
19% |
|
|
10,649 |
|
Total Operating Margin |
|
$ |
6,728 |
|
|
57% |
|
57% |
|
$ |
4,277 |
|
Total Operating Margin % |
|
35% |
|
|
|
|
|
|
29% |
|
||
% Revenues by Geography: |
|
|
|
|
|
|
|
|
|
|
||
Americas |
|
71% |
|
|
|
|
|
|
65% |
|
||
EMEA |
|
19% |
|
|
|
|
|
|
23% |
|
||
Asia Pacific |
|
10% |
|
|
|
|
|
|
12% |
|
||
Total Revenues by Business: |
|
|
|
|
|
|
|
|
|
|
||
Cloud and software |
|
$ |
17,157 |
|
|
33% |
|
33% |
|
$ |
12,907 |
|
Hardware |
|
|
774 |
|
|
15% |
|
16% |
|
|
670 |
|
Services |
|
|
1,414 |
|
|
5% |
|
5% |
|
|
1,349 |
|
Total revenues |
|
$ |
19,345 |
|
|
30% |
|
30% |
|
$ |
14,926 |
|
% Revenues by Business: |
|
|
|
|
|
|
|
|
|
|
||
Cloud and software |
|
89% |
|
|
|
|
|
|
86% |
|
||
Hardware |
|
4% |
|
|
|
|
|
|
5% |
|
||
Services |
|
7% |
|
|
|
|
|
|
9% |
|
||
Total revenues increased by $4.4 billion in reported currency in the first quarter of fiscal 2027, relative to the first quarter of fiscal 2026, due to a $4.3 billion increase in cloud and software revenues, a $104 million increase in hardware revenues and a $65 million increase in services revenues, in each case during the first quarter of fiscal 2027 relative to the first quarter of fiscal 2026. The increase in our cloud and software business revenues was due to growth in our cloud revenues as customers purchased our applications and infrastructure technologies and also renewed their related cloud contracts. In constant currency, cloud infrastructure and cloud applications contributed 91% and 9%, respectively, to the growth in cloud revenues in the first quarter of fiscal 2027. In our hardware business, the increase in revenues was primarily due to the growth in revenues from our Oracle Exadata and certain other strategic hardware product offerings, partially offset by the continued emphasis we have placed on the marketing and sale of our growing cloud-based infrastructure technologies. In our services business, the increase in revenues was attributable to an $88 million increase in our consulting services revenues, partially offset by a $23 million decrease in our customer success services revenues. The Americas, the EMEA and the Asia Pacific regions contributed 90%, 6% and 4%, respectively, to the constant currency total revenue growth during the first quarter of fiscal 2027.
Total GAAP operating expenses increased by $2.0 billion in reported currency in the first quarter of fiscal 2027 relative to the first quarter of fiscal 2026. The increase in GAAP operating expenses in reported currency was primarily due to a $2.8 billion increase in cloud and software expenses primarily due to higher infrastructure expenses and a $103 million increase in hardware expenses, in each case during the first quarter of fiscal 2027 relative to the first quarter of fiscal 2026. These increases in GAAP operating expenses in reported currency were partially offset by a $321 million decrease in restructuring and other expenses primarily due to lower restructuring expenses; a $252 million decrease in sales and marketing expenses primarily due to a decrease in employee-related expenses; a $218 million decrease in expenses for the amortization of intangible assets as certain of our assets were fully amortized; a $90 million decrease in research and development expenses; and a $47 million decrease in services expenses.
Our total operating margin and total margin as a percentage of revenues increased in the first quarter of fiscal 2027, relative to the first quarter of fiscal 2026, due to higher revenues as discussed above.
26
Supplemental Disclosure Related to Certain Charges
To supplement our condensed consolidated financial information, we believe that the following information is helpful to an overall understanding of our past financial performance and prospects for the future.
Our operating results reported pursuant to GAAP included the following items that affected our GAAP net income:
|
|
Three Months Ended |
|
|||||
(in millions) |
|
2026 |
|
|
2025 |
|
||
Amortization of intangible assets(1) |
|
$ |
202 |
|
|
$ |
420 |
|
Restructuring and other(2) |
|
|
94 |
|
|
|
415 |
|
Stock-based compensation, operating segments(3) |
|
|
362 |
|
|
|
389 |
|
Stock-based compensation, R&D and G&A(3) |
|
|
765 |
|
|
|
735 |
|
Income tax effects(4) |
|
|
(344 |
) |
|
|
(603 |
) |
|
|
$ |
1,079 |
|
|
$ |
1,356 |
|
|
Remainder of fiscal 2027 |
|
$ |
529 |
|
|
Fiscal 2028 |
|
|
694 |
|
|
Fiscal 2029 |
|
|
620 |
|
|
Fiscal 2030 |
|
|
582 |
|
|
Fiscal 2031 |
|
|
377 |
|
|
Fiscal 2032 |
|
|
182 |
|
|
Thereafter |
|
|
43 |
|
|
Total intangible assets, net |
|
$ |
3,027 |
|
|
|
|
Three Months Ended |
|
|||||
|
|
|
2026 |
|
|
2025 |
|
||
|
Cloud and software |
|
$ |
134 |
|
|
$ |
156 |
|
|
Hardware |
|
|
6 |
|
|
|
7 |
|
|
Services |
|
|
51 |
|
|
|
49 |
|
|
Sales and marketing |
|
|
171 |
|
|
|
177 |
|
|
Stock-based compensation, operating segments |
|
|
362 |
|
|
|
389 |
|
|
Research and development |
|
|
667 |
|
|
|
647 |
|
|
General and administrative |
|
|
98 |
|
|
|
88 |
|
|
Total stock-based compensation |
|
$ |
1,127 |
|
|
$ |
1,124 |
|
27
Cloud and Software Business
|
|
Three Months Ended August 31, |
|
|||||||||
|
|
|
|
|
Percent Change |
|
|
|
||||
(Dollars in millions) |
|
2026 |
|
|
Actual |
|
Constant |
|
2025 |
|
||
Cloud and Software Revenues: |
|
|
|
|
|
|
|
|
|
|
||
Americas |
|
$ |
12,433 |
|
|
46% |
|
46% |
|
$ |
8,502 |
|
EMEA |
|
|
3,167 |
|
|
8% |
|
8% |
|
|
2,942 |
|
Asia Pacific |
|
|
1,557 |
|
|
6% |
|
10% |
|
|
1,463 |
|
Total revenues |
|
|
17,157 |
|
|
33% |
|
33% |
|
|
12,907 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
||
Cloud and software(1) |
|
|
6,235 |
|
|
82% |
|
83% |
|
|
3,418 |
|
Sales and marketing(1) |
|
|
1,564 |
|
|
-13% |
|
-13% |
|
|
1,798 |
|
Total expenses(1) |
|
|
7,799 |
|
|
50% |
|
49% |
|
|
5,216 |
|
Total Margin |
|
$ |
9,358 |
|
|
22% |
|
22% |
|
$ |
7,691 |
|
Total Margin % |
|
55% |
|
|
|
|
|
|
60% |
|
||
% Revenues by Geography: |
|
|
|
|
|
|
|
|
|
|
||
Americas |
|
73% |
|
|
|
|
|
|
66% |
|
||
EMEA |
|
18% |
|
|
|
|
|
|
23% |
|
||
Asia Pacific |
|
9% |
|
|
|
|
|
|
11% |
|
||
Revenues by Offerings: |
|
|
|
|
|
|
|
|
|
|
||
Cloud applications |
|
$ |
4,219 |
|
|
10% |
|
10% |
|
$ |
3,839 |
|
Cloud infrastructure |
|
|
7,388 |
|
|
121% |
|
120% |
|
|
3,347 |
|
Software license |
|
|
655 |
|
|
-15% |
|
-14% |
|
|
766 |
|
Software support |
|
|
4,895 |
|
|
-1% |
|
-1% |
|
|
4,955 |
|
Total revenues |
|
$ |
17,157 |
|
|
33% |
|
33% |
|
$ |
12,907 |
|
Our cloud and software business’ total revenues increased by $4.3 billion in reported currency in the first quarter of fiscal 2027 relative to the first quarter of fiscal 2026 due to an increase in cloud revenues as customers purchased our applications and infrastructure technologies and renewed their related cloud contracts. Excluding the unfavorable impact of currency rate fluctuations of less than 1% in the first quarter of fiscal 2027, cloud infrastructure and cloud applications contributed 91% and 9%, respectively, to the constant currency growth in cloud revenues in the first quarter of fiscal 2027. The Americas, the EMEA and the Asia Pacific regions contributed 91%, 6% and 3%, respectively, to the constant currency revenue growth for this business during the first quarter of fiscal 2027.
Our cloud and software business’ total expenses increased by $2.6 billion in reported currency in the first quarter of fiscal 2027 relative to the first quarter of fiscal 2026. Excluding the unfavorable effects of currency rate fluctuations of 1% in the first quarter of fiscal 2027, the constant currency increase in expenses was primarily due to a $2.8 billion increase in infrastructure expenses, partially offset by a $240 million decrease in sales and marketing expenses in the first quarter of fiscal 2027 relative to the first quarter of fiscal 2026. Our cloud and software expenses have grown in recent periods, and we expect this trend to continue during fiscal 2027 and in the next few fiscal years as we increase our existing data center capacity and establish data centers in new geographic locations in order to meet current and expected customer demand.
Excluding the effects of currency rate fluctuations, our cloud and software business’ total margin increased in the first quarter of fiscal 2027, relative to the first quarter of fiscal 2026, due to increases in total revenues for this business as discussed above. Total margin as a percentage of revenues in constant currency decreased in the first quarter of fiscal 2027, relative to the first quarter of fiscal 2026, due to an increase in cloud and software business’ total expenses driven by higher infrastructure expenses to support growth in our cloud infrastructure offering.
28
Hardware Business
|
|
Three Months Ended August 31, |
|
|||||||||
|
|
|
|
|
Percent Change |
|
|
|
||||
(Dollars in millions) |
|
2026 |
|
|
Actual |
|
Constant |
|
2025 |
|
||
Hardware Revenues: |
|
|
|
|
|
|
|
|
|
|
||
Americas |
|
$ |
367 |
|
|
17% |
|
16% |
|
$ |
315 |
|
EMEA |
|
|
212 |
|
|
5% |
|
5% |
|
|
202 |
|
Asia Pacific |
|
|
195 |
|
|
27% |
|
31% |
|
|
153 |
|
Total revenues |
|
|
774 |
|
|
15% |
|
16% |
|
|
670 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
||
Hardware(1) |
|
|
272 |
|
|
62% |
|
61% |
|
|
169 |
|
Sales and marketing(1) |
|
|
50 |
|
|
-9% |
|
-9% |
|
|
54 |
|
Total expenses(1) |
|
|
322 |
|
|
44% |
|
44% |
|
|
223 |
|
Total Margin |
|
$ |
452 |
|
|
1% |
|
2% |
|
$ |
447 |
|
Total Margin % |
|
58% |
|
|
|
|
|
|
67% |
|
||
% Revenues by Geography: |
|
|
|
|
|
|
|
|
|
|
||
Americas |
|
48% |
|
|
|
|
|
|
47% |
|
||
EMEA |
|
27% |
|
|
|
|
|
|
30% |
|
||
Asia Pacific |
|
25% |
|
|
|
|
|
|
23% |
|
||
Total hardware revenues increased by $104 million in reported currency in the first quarter of fiscal 2027 relative to the first quarter of fiscal 2026. Excluding the unfavorable impact of currency rate fluctuations of 1% in the first quarter of fiscal 2027, the increase in hardware revenues was primarily due to the growth in revenues from our Oracle Exadata and certain other strategic hardware product offerings, partially offset by the continued emphasis we have placed on the marketing and sale of our growing cloud-based infrastructure technologies. The Americas, the EMEA and the Asia Pacific regions contributed 47%, 10% and 43%, respectively, to the constant currency revenue growth for this business during the first quarter of fiscal 2027.
Total hardware expenses increased by $99 million in reported currency in the first quarter of fiscal 2027 relative to the first quarter of fiscal 2026. Excluding the unfavorable currency rate fluctuations effect of less than 1% in the first quarter of fiscal 2027, the constant currency increase in hardware expenses during the first quarter of fiscal 2027 relative to the first quarter of fiscal 2026 was primarily due to a $103 million increase in hardware product and support costs.
In constant currency, our hardware business’ total margin increased in the first quarter of fiscal 2027, relative to the first quarter of fiscal 2026, due to higher total revenues for this business as described above. In constant currency, total margin as a percentage of revenues decreased in the first quarter of fiscal 2027, relative to the first quarter of fiscal 2026, due to higher total expenses for this business as described above.
29
Services Business
|
|
Three Months Ended August 31, |
|
|||||||||
|
|
|
|
|
Percent Change |
|
|
|
||||
(Dollars in millions) |
|
2026 |
|
|
Actual |
|
Constant |
|
2025 |
|
||
Services Revenues: |
|
|
|
|
|
|
|
|
|
|
||
Americas |
|
$ |
911 |
|
|
8% |
|
7% |
|
$ |
845 |
|
EMEA |
|
|
347 |
|
|
3% |
|
3% |
|
|
337 |
|
Asia Pacific |
|
|
156 |
|
|
-6% |
|
-3% |
|
|
167 |
|
Total revenues |
|
|
1,414 |
|
|
5% |
|
5% |
|
|
1,349 |
|
Total Expenses(1) |
|
|
969 |
|
|
-5% |
|
-5% |
|
|
1,017 |
|
Total Margin |
|
$ |
445 |
|
|
34% |
|
34% |
|
$ |
332 |
|
Total Margin % |
|
31% |
|
|
|
|
|
|
25% |
|
||
% Revenues by Geography: |
|
|
|
|
|
|
|
|
|
|
||
Americas |
|
64% |
|
|
|
|
|
|
63% |
|
||
EMEA |
|
25% |
|
|
|
|
|
|
25% |
|
||
Asia Pacific |
|
11% |
|
|
|
|
|
|
12% |
|
||
Total services revenues increased by $65 million in reported currency in the first quarter of fiscal 2027 relative to the first quarter of fiscal 2026. The increase in services revenues in reported currency was due to an $88 million increase in our consulting services revenues, partially offset by a $23 million decrease in our customer success services revenues in the first quarter of fiscal 2027 relative to the first quarter of fiscal 2026. Excluding the unfavorable impact of currency rate fluctuations of less than 1% in the first quarter of fiscal 2027, the constant currency increase in services revenues in the Americas and the EMEA regions was partially offset by a constant currency decrease in services revenues in the Asia Pacific region.
Total services expenses decreased by $48 million in reported currency in the first quarter of fiscal 2027 relative to the first quarter of fiscal 2026. Excluding the favorable effects of currency rate fluctuations of less than 1% in the first quarter of fiscal 2027, the constant currency decrease in services expenses was primarily due to a $107 million decrease in employee-related expenses, partially offset by a $28 million increase in bad debt expenses and a $27 million increase in external contractor expenses, in each case during the first quarter of fiscal 2027 relative to the first quarter of fiscal 2026.
In constant currency, our services business’ total margin and total margin as a percentage of revenues increased in the first quarter of fiscal 2027, relative to the first quarter of fiscal 2026, due to higher total revenues and lower total expenses for this business as described above.
Research and Development Expenses: Research and development expenses consist primarily of personnel-related expenditures. We intend to continue to invest significantly in our research and development efforts because, in our judgment, they are essential to maintaining our competitive position.
|
|
Three Months Ended August 31, |
|
|||||||||
|
|
|
|
|
Percent Change |
|
|
|
||||
(Dollars in millions) |
|
2026 |
|
|
Actual |
|
Constant |
|
2025 |
|
||
Research and development(1) |
|
$ |
1,734 |
|
|
-6% |
|
-5% |
|
$ |
1,844 |
|
Stock-based compensation |
|
|
667 |
|
|
3% |
|
3% |
|
|
647 |
|
Total expenses |
|
$ |
2,401 |
|
|
-4% |
|
-3% |
|
$ |
2,491 |
|
% of Total Revenues |
|
12% |
|
|
|
|
|
|
17% |
|
||
Total research and development expenses decreased by $90 million in reported currency in the first quarter of fiscal 2027 relative to the first quarter of fiscal 2026. Excluding the favorable effects of currency rate fluctuations of 1% in the first quarter of fiscal 2027, the constant currency decrease in research and development expenses was primarily
30
due to a $145 million decrease in employee-related expenses, partially offset by a $92 million increase in computer equipment expenses, in each case in the first quarter of fiscal 2027 relative to the first quarter of fiscal 2026.
General and Administrative Expenses: General and administrative expenses primarily consist of personnel-related expenditures for IT, finance, legal and human resources support functions.
|
|
Three Months Ended August 31, |
|
|||||||||
|
|
|
|
|
Percent Change |
|
|
|
||||
(Dollars in millions) |
|
2026 |
|
|
Actual |
|
Constant |
|
2025 |
|
||
General and administrative(1) |
|
$ |
278 |
|
|
-4% |
|
-3% |
|
$ |
288 |
|
Stock-based compensation |
|
|
98 |
|
|
11% |
|
11% |
|
|
88 |
|
Total expenses |
|
$ |
376 |
|
|
0% |
|
0% |
|
$ |
376 |
|
% of Total Revenues |
|
2% |
|
|
|
|
|
|
2% |
|
||
Total general and administrative expenses remained flat in both reported and constant currency in the first quarter of fiscal 2027 relative to the first quarter of fiscal 2026.
Amortization of Intangible Assets: Substantially all our intangible assets were acquired through our business combinations. We amortize our intangible assets over, and monitor the appropriateness of, the estimated useful lives of these assets. We also periodically review these intangible assets for potential impairment based upon relevant facts and circumstances. Refer to Note 5 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2026 for additional information regarding our intangible assets and related amortization.
|
|
Three Months Ended August 31, |
|
|||||||||
|
|
|
|
|
Percent Change |
|
|
|
||||
(Dollars in millions) |
|
2026 |
|
|
Actual |
|
Constant |
|
2025 |
|
||
Cloud and software agreements and related relationships |
|
$ |
133 |
|
|
-10% |
|
-10% |
|
$ |
149 |
|
Developed technology |
|
|
32 |
|
|
-79% |
|
-79% |
|
|
154 |
|
Other |
|
|
37 |
|
|
-69% |
|
-69% |
|
|
117 |
|
Total amortization of intangible assets |
|
$ |
202 |
|
|
-52% |
|
-52% |
|
$ |
420 |
|
Amortization of intangible assets decreased by $218 million in reported currency in the first quarter of fiscal 2027, relative to the first quarter of fiscal 2026, due to a reduction in expenses associated with certain of our intangible assets that became fully amortized.
Restructuring and Other Expenses: Restructuring and other expenses consist of restructuring expenses for employee severance costs, contract termination costs and certain other exit costs to improve our cost structure prospectively resulting from the execution of management-approved restructuring plans that were developed for certain strategic initiatives and/or to improve operational efficiencies; and other operating expenses, net. For additional information regarding our restructuring plans, see Note 4 of Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report and Note 7 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2026.
|
|
Three Months Ended August 31, |
|
|||||||||
|
|
|
|
|
Percent Change |
|
|
|
||||
(Dollars in millions) |
|
2026 |
|
|
Actual |
|
Constant |
|
2025 |
|
||
Restructuring |
|
$ |
165 |
|
|
-59% |
|
-58% |
|
$ |
402 |
|
Other, net |
|
|
(71 |
) |
|
* |
|
* |
|
|
13 |
|
Total restructuring and other expenses |
|
$ |
94 |
|
|
-77% |
|
-77% |
|
$ |
415 |
|
* |
Not meaningful |
Restructuring and other expenses decreased by $321 million in reported currency in the first quarter of fiscal 2027, relative to the first quarter of fiscal 2026, due to a $237 million decrease in restructuring expenses and an $84 million decrease in other operating expenses, net, which was primarily related to insurance receipts related to a legal matter, in each case in the first quarter of fiscal 2027 relative to the first quarter of fiscal 2026. Restructuring
31
activities in the first quarter of each of fiscal 2027 and 2026 primarily related to the 2026 Restructuring Plan that our management approved, committed to and initiated during fiscal 2026 to implement certain strategic measures and further improve operational efficiencies, including through the adoption and integration of artificial intelligence technologies across certain functions and other operational activities.
Certain of the cost savings realized pursuant to the 2026 Restructuring Plan initiatives were offset by investments in resources and geographies that we believe better address the development, marketing, sale and delivery of our cloud-based offerings, including investments in the development and delivery of our second-generation cloud infrastructure. We expect to incur additional restructuring expenses in future periods due to the initiation of new restructuring plans or from changes in estimated costs associated with existing restructuring plans.
Interest Expense:
|
|
Three Months Ended August 31, |
|
|||||||||
|
|
|
|
|
Percent Change |
|
|
|
||||
(Dollars in millions) |
|
2026 |
|
|
Actual |
|
Constant |
|
2025 |
|
||
Interest expense |
|
$ |
1,428 |
|
|
55% |
|
55% |
|
$ |
923 |
|
Interest expense increased in the first quarter of fiscal 2027, relative to the first quarter of fiscal 2026, primarily due to higher average borrowings from the issuances of $43.0 billion of senior notes in fiscal 2026, partially offset by lower interest expense due to scheduled repayments of $8.1 billion of debt made during the first quarter of fiscal 2027 and full year of fiscal 2026.
Non-Operating Income, net: Non-operating income, net consists primarily of interest income, net foreign currency exchange losses, the noncontrolling interests in the net profits of our majority-owned subsidiaries (primarily Oracle Financial Services Software Limited and Oracle Corporation Japan), net gains and losses related to marketable and non-marketable investments, including net gains and losses attributable to equity method investments and net other income and expenses, including net gains and losses from our investment portfolio related to our deferred compensation plan, for which an equal and offsetting amount was recorded to our operating expenses during the same period, and non-service net periodic pension income and losses.
|
|
Three Months Ended August 31, |
|
|||||||||
|
|
|
|
|
Percent Change |
|
|
|
||||
(Dollars in millions) |
|
2026 |
|
|
Actual |
|
Constant |
|
2025 |
|
||
Interest income |
|
$ |
306 |
|
|
197% |
|
198% |
|
$ |
103 |
|
Foreign currency losses, net |
|
|
(16 |
) |
|
-48% |
|
-54% |
|
|
(31 |
) |
Noncontrolling interests in income |
|
|
(53 |
) |
|
13% |
|
13% |
|
|
(47 |
) |
Gains (losses) from marketable and non-marketable investments, net |
|
|
53 |
|
|
* |
|
* |
|
|
(52 |
) |
Other income, net |
|
|
17 |
|
|
-83% |
|
-83% |
|
|
100 |
|
Total non-operating income, net |
|
$ |
307 |
|
|
323% |
|
331% |
|
$ |
73 |
|
* |
Not meaningful |
Our non-operating income, net increased by $234 million in reported currency in the first quarter of fiscal 2027, relative to the first quarter of fiscal 2026, primarily due to a $203 million increase in interest income and a $105 million increase in gain from investments, net, partially offset by an $83 million decrease in other income, net, primarily due to lower gains associated with an investment portfolio that we held for our employee deferred compensation plan, and for which an equal and offsetting amount was recorded to our operating expenses during the same period.
32
Provision for Income Taxes: Our effective income tax rates for each of the periods presented were the result of the mix of income earned and losses incurred in various tax jurisdictions that apply a broad range of income tax rates. Refer to Note 8 of Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for a discussion regarding the differences between the effective income tax rates as presented for the periods below and the U.S. federal statutory income tax rates that were in effect during these periods. Future effective tax rates could be adversely affected by an unfavorable shift of earnings weighted to jurisdictions with higher tax rates, by unfavorable changes in tax laws and regulations, by adverse rulings in tax-related litigation, or by shortfalls in stock-based compensation realized by employees relative to stock-based compensation that was recorded for book purposes, among others.
|
|
Three Months Ended August 31, |
|
|||||||||
|
|
|
|
|
Percent Change |
|
|
|
||||
(Dollars in millions) |
|
2026 |
|
|
Actual |
|
Constant |
|
2025 |
|
||
Provision for income taxes |
|
$ |
847 |
|
|
69% |
|
69% |
|
$ |
500 |
|
Effective tax rate |
|
15.1% |
|
|
|
|
|
|
14.6% |
|
||
Provision for income taxes increased in the first quarter of fiscal 2027, relative to the first quarter of fiscal 2026, primarily related to a decrease in tax benefits related to stock-based compensation of $1.1 billion, higher income before provision for income taxes of $318 million and an unfavorable jurisdictional mix of earnings of $120 million, partially offset by the absence of an unfavorable impact of $958 million from the enactment of the U.S. One, Big, Beautiful Bill Act, which was signed into law on July 4, 2025 that required a remeasurement of a deferred tax liability previously recorded during fiscal 2021 as part of the partial realignment of our legal entity structure and net changes in our unrecognized tax benefits due to settlements with tax authorities and other events of $241 million.
Liquidity and Capital Resources
(Dollars in millions) |
|
August 31, |
|
|
Change |
|
May 31, |
|
||
Working capital |
|
$ |
8,116 |
|
|
69% |
|
$ |
4,803 |
|
Cash, cash equivalents and marketable securities |
|
$ |
37,077 |
|
|
16% |
|
$ |
31,894 |
|
Working capital: The increase in working capital as of August 31, 2026 in comparison to May 31, 2026 was primarily due to favorable impacts from net income; $19.9 billion of cash proceeds from the issuance of common stock via the ATM Program (defined below under Recent Financing Activities), net of issuance costs; and $11.4 billion of customer prepayments with a significant financing component, partially offset by $28.5 billion of cash used for capital expenditures; $4.6 billion of long-term borrowings that were reclassified to current liabilities; and $1.6 billion of cash used to pay dividends to our preferred and common stockholders, in each case during the first quarter of fiscal 2027. Our working capital may be impacted by some or all of the aforementioned factors in future periods, the amounts and timing of which are variable.
Cash, cash equivalents and marketable securities: Cash and cash equivalents primarily consist of deposits held at major banks, money market funds and other securities with original maturities of 90 days or less. Marketable securities consist primarily of time deposits with original maturities at the time of purchase greater than 90 days. The increase in cash, cash equivalents and marketable securities as of August 31, 2026 in comparison to May 31, 2026 was primarily due to $23.1 billion of cash inflows from our operations, which includes $11.4 billion of customer prepayments with a significant financing component; and $19.9 billion of cash proceeds from the issuance of common stock via the ATM Program, net of issuance costs, partially offset by $28.5 billion of cash used for capital expenditures; $3.1 billion of cash used for scheduled repayments of debt; $2.6 billion of restricted cash that was reclassed to prepaid expenses and other current assets; $1.6 billion of cash used to pay dividends to our common and preferred stockholders; $1.1 billion of cash used for repayment of commercial paper; $830 million of cash outflows for short-term financing related to capital expenditures, net; and $242 million of cash outflows for other financing activities, net, in each case during the first quarter of fiscal 2027. Our cash and cash equivalents may be impacted by some or all of the aforementioned factors in future periods, the amounts and timing of which are variable.
33
|
|
Three Months Ended August 31, |
|
|||||||
(Dollars in millions) |
|
2026 |
|
|
Change |
|
2025 |
|
||
Net cash provided by operating activities |
|
$ |
23,103 |
|
|
184% |
|
$ |
8,140 |
|
Net cash used for investing activities |
|
$ |
(28,580 |
) |
|
228% |
|
$ |
(8,718 |
) |
Net cash provided by financing activities |
|
$ |
13,111 |
|
|
* |
|
$ |
210 |
|
* |
Not meaningful |
Cash flows from operating activities: Our largest source of operating cash flows is cash collections from our customers following the purchase and renewal of their cloud and software support agreements. Over the course of a fiscal year, we also generate cash from the sales of software licenses, hardware offerings and other services. Our primary uses of cash from operating activities are typically for employee-related expenditures, expenses related to data center leases and power for our cloud business, taxes, and interest payments.
Net cash provided by operating activities increased by $15.0 billion in the first quarter of fiscal 2027, relative to the first quarter of fiscal 2026, primarily due to higher net income adjusted for certain non-cash charges and higher cash favorable working capital changes, net, which includes $11.4 billion cash inflows from customer prepayments with a significant financing component.
Cash flows from investing activities: The changes in cash flows from investing activities primarily relate to our investments in capital assets to support the growth in our cloud and software business and purchases, maturities and sales of our investments in marketable securities and other instruments.
Net cash used for investing activities increased by $19.9 billion in the first quarter of fiscal 2027, relative to the first quarter of fiscal 2026, primarily due to a $20.0 billion increase in capital expenditures.
Cash flows from financing activities: The changes in cash flows from financing activities primarily relate to borrowings and repayments related to our debt instruments, issuance of other financing or equity instruments, dividend payments, and net proceeds related to employee stock programs.
Net cash provided by financing activities increased by $12.9 billion in the first quarter of fiscal 2027, relative to the first quarter of fiscal 2026, primarily due to net proceeds from the issuance of common stock via the ATM Program of $19.9 billion, partially offset by higher repayments of borrowings of $2.9 billion; higher net repayments of short-term financing related to capital expenditures of $2.8 billion; lower net cash proceeds from our employee stock programs of $1.1 billion; and higher dividend payments of $152 million.
Free cash flow: To supplement our statements of cash flows presented on a GAAP basis, we use non-GAAP measures of cash flows to analyze cash flows generated from our operations. We believe that free cash flow is also useful as one of the bases for comparing our performance with that of our competitors. The presentation of non-GAAP free cash flow is not meant to be considered in isolation or as an alternative to net income as an indicator of our performance, or as an alternative to cash flows from operating activities as a measure of liquidity. We calculate free cash flow as follows:
|
|
Three Months Ended August 31, |
|
|||||||
(Dollars in millions) |
|
2026 |
|
|
Change |
|
2025 |
|
||
Net cash provided by operating activities |
|
$ |
23,103 |
|
|
184% |
|
$ |
8,140 |
|
Capital expenditures |
|
|
(28,499 |
) |
|
235% |
|
|
(8,502 |
) |
Free cash flow |
|
$ |
(5,396 |
) |
|
* |
|
$ |
(362 |
) |
Net income |
|
$ |
4,760 |
|
|
|
|
$ |
2,927 |
|
Net cash provided by operating activities as a percent of net income |
|
485% |
|
|
|
|
278% |
|
||
* |
Not meaningful |
Recent Financing Activities:
Common Stock: On February 2, 2026, we entered into an equity distribution agreement with certain sales agents party thereto, as amended on June 23, 2026, pursuant to which we may sell shares of our common stock having aggregate sales proceeds of up to $20 billion from time to time through an “at-the-market” offering program (the
34
ATM Program). During the first quarter ended August 31, 2026, we fully utilized the ATM Program and issued approximately 141 million shares of common stock under the ATM Program for net proceeds of $19.9 billion.
Contractual Obligations: During the first quarter of fiscal 2027, we entered into certain significant leases for data centers and other contractual commitments. Refer to Note 6 of Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report and Note 9 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2026 for more information about our contractual obligations. Our unconditional obligations reported in Note 6 to Condensed Consolidated Financial Statements include certain minimum purchase commitment contracts. We expect to consume the products and services subject to these commitments in the normal course of business. Further, in the event that we do not expect to consume all of the products we are obligated to purchase pursuant to the terms of these agreements, we may sell the excess products in the open market.
Capital Expenditures: Cash used for capital expenditures increased from $8.5 billion in the first quarter of fiscal 2026 to $28.5 billion in the first quarter of fiscal 2027 primarily due to the expansion of our data centers. We expect our capital expenditures in fiscal 2027 to be higher than fiscal 2026 as we increase our existing data center capacity and establish data centers in new geographic locations in order to meet current and expected customer demand for our cloud offerings.
We believe that our current cash, cash equivalents and marketable securities balances, together with cash generated from operations and available financing arrangements, will be sufficient to meet our working capital, committed capital expenditures and contractual obligations for at least the next twelve months. Thereafter, we expect that our existing sources of liquidity, together with potential access to additional financing, will continue to be sufficient for the foreseeable future. Further, we have flexibility in managing the timing of certain discretionary capital expenditures.
Remaining Performance Obligations from Contracts with Customers
Remaining performance obligations were $664 billion and $455 billion as of August 31, 2026 and 2025, respectively. The increase in remaining performance obligations as of August 31, 2026 in comparison to August 31, 2025 was primarily attributable to certain significant cloud contracts that were entered into during the period. For more information about our remaining performance obligations, see Note 1 of Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.
Recent Accounting Pronouncements
For information with respect to recent accounting pronouncements, and the impact of these pronouncements on our consolidated financial statements, see Note 1 of Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There were no significant changes to our quantitative and qualitative disclosures about market risk during the first quarter of fiscal 2027. Please refer to Part II, Item 7A Quantitative and Qualitative Disclosures about Market Risk included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2026 for a more complete discussion of the market risks we encounter.
35
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures: Based on our management’s evaluation (with the participation of our Principal Executive Officers and Principal Financial Officer), as of the end of the period covered by this Quarterly Report, our Principal Executive Officers and Principal Financial Officer have concluded that our “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective to provide reasonable assurance that the information required to be disclosed by us in our reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to our management (including our Principal Executive Officers and Principal Financial Officer) as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting: There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls: Our management, including our Principal Executive Officers and Principal Financial Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
36
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The material set forth in Note 8 (pertaining to information regarding contingencies related to our income taxes) and Note 11 (pertaining to information regarding legal contingencies) of Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report is incorporated herein by reference.
Item 1A. Risk Factors
In addition to the other information set forth in this Quarterly Report, you should carefully consider the factors discussed in Part I, Item 1A Risk Factors in our Annual Report on Form 10-K for the fiscal year ended May 31, 2026. The risks discussed in our Annual Report on Form 10-K could materially affect our business, financial condition and future results. The risks described in our Annual Report on Form 10-K are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be insignificant also may materially and adversely affect our business, financial condition or operating results in the future.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Our Board of Directors has approved a program for us to repurchase shares of our common stock. As of August 31, 2026, approximately $6.3 billion remained available for stock repurchases pursuant to our stock repurchase program. There was no stock repurchase activity for the three months ended August 31, 2026.
Our stock repurchase authorization does not have an expiration date and the pace of any future repurchase activity will depend on factors such as our working capital needs, our cash requirements for capital expenditures, acquisitions and dividend payments, our debt repayment obligations or repurchases of our debt, our stock price and economic and market conditions. Our stock repurchases may be effected from time to time through open market purchases or pursuant to a Rule 10b5-1 trading plan. Our stock repurchase program may be accelerated, suspended, delayed or discontinued at any time.
Item 5. Other Information
Rule 10b5-1 Trading Plans
Our Section 16 officers and directors (as defined in Rule 16a-1 under the Exchange Act) may from time to time enter into plans for the purchase or sale of Oracle stock that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act. During the quarter ended August 31, 2026, the following Section 16 officer adopted, modified or terminated a “Rule 10b5-1 trading arrangement” (as defined in Item 408 of Regulation S-K under Exchange Act):
The Rule 10b5-1 trading arrangement described above was adopted and precleared in accordance with Oracle’s Insider Trading Policy and actual sale transactions made pursuant to such trading arrangement will be disclosed publicly in future Section 16 filings with the SEC.
37
Item 6. Exhibits
Exhibit No. |
|
|
|
Incorporated by Reference |
|||||||||||||||||
|
Exhibit Description |
|
Form |
|
File No. |
|
Exhibit |
|
Filing Date |
|
Filed By |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
3.01 |
|
|
8-K 12G3 |
|
000-51788 |
|
3.1 |
|
2/6/06 |
|
Oracle Corporation |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
3.02 |
|
|
8-K |
|
001-35992 |
|
3.02 |
|
11/17/23 |
|
Oracle Corporation |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
10.07*‡ |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
31.01‡ |
|
Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer |
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
31.02‡ |
|
Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer |
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
31.03‡ |
|
Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer |
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
32.01† |
|
Section 1350 Certification of Principal Executive Officers and Principal Financial Officer |
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
101‡ |
|
Interactive Data Files Pursuant to Rule 405 of Regulation S-T, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets as of August 31, 2026 and May 31, 2026, (ii) Condensed Consolidated Statements of Operations for the three months ended August 31, 2026 and 2025, (iii) Condensed Consolidated Statements of Comprehensive Income for the three months ended August 31, 2026 and 2025, (iv) Condensed Consolidated Statements of Stockholders’ Equity for the three months ended August 31, 2026 and 2025, (v) Condensed Consolidated Statements of Cash Flows for the three months ended August 31, 2026 and 2025 and (vi) Notes to Condensed Consolidated Financial Statements |
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
104‡ |
|
The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended August 31, 2026, formatted in Inline XBRL and included in Exhibit 101 |
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
* |
Indicates management contract or compensatory plan or arrangement. |
‡ |
Filed herewith. |
† |
Furnished herewith. |
38
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Oracle Corporation has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
ORACLE CORPORATION |
||
|
|
|
||
Date: September 11, 2026 |
|
By: |
|
/s/ Hilary Maxson |
|
|
|
|
Hilary Maxson Chief Financial Officer (Principal Financial Officer) |
|
|
|
|
|
Date: September 11, 2026 |
|
By: |
|
/s/ Maria Smith |
|
|
|
|
Maria Smith |
|
|
|
|
Executive Vice President, Chief Accounting Officer (Principal Accounting Officer) |
39