Oracle Announces Fiscal Year 2026 First Quarter Financial Results

ORACLE  CORPORATION

Q1 FISCAL 2026 FINANCIAL RESULTS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in millions, except per share data)

Three Months Ended August 31,

% Increase

(Decrease)

2025

% of 

2024

% of 

(Decrease)

in Constant

Revenues

Revenues

in US $

Currency (1)

REVENUES

Cloud

$              7,186

48 %

$              5,623

42 %

28 %

27 %

Software

5,721

38 %

5,766

44 %

(1 %)

(2 %)

Hardware

670

5 %

655

5 %

2 %

1 %

Services

1,349

9 %

1,263

9 %

7 %

5 %

      Total revenues

14,926

100 %

13,307

100 %

12 %

11 %

OPERATING EXPENSES

Cloud and software

3,607

24 %

2,597

19 %

39 %

38 %

Hardware

178

1 %

162

1 %

10 %

9 %

Services

1,099

7 %

1,147

9 %

(4 %)

(5 %)

Sales and marketing

2,063

14 %

2,036

15 %

1 %

0 %

Research and development 

2,491

17 %

2,306

17 %

8 %

8 %

General and administrative

376

2 %

358

3 %

5 %

4 %

Amortization of intangible assets

420

3 %

624

5 %

(33 %)

(33 %)

Acquisition related and other

13

0 %

13

0 %

10 %

8 %

Restructuring

402

3 %

73

1 %

448 %

439 %

      Total operating expenses 

10,649

71 %

9,316

70 %

14 %

14 %

OPERATING INCOME

4,277

29 %

3,991

30 %

7 %

4 %

Interest expense

(923)

(6 %)

(842)

(6 %)

10 %

10 %

Non-operating income, net

73

0 %

20

0 %

250 %

286 %

INCOME BEFORE INCOME TAXES

3,427

23 %

3,169

24 %

8 %

4 %

Provision for income taxes (2)

500

3 %

240

2 %

108 %

101 %

NET INCOME

$              2,927

20 %

$              2,929

22 %

0 %

(4 %)

EARNINGS PER SHARE:

Basic

$                1.04

$                1.06

Diluted

$                1.01

$                1.03

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Basic

2,826

2,761

Diluted

2,909

2,851

(1)

We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in effect on May 31, 2025, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during the respective periods. Movements in international currencies relative to the United States dollar during the three months ended August 31, 2025 compared with the corresponding prior year period increased our total revenues by 1 percentage point and operating income by 3 percentage points.

(2)

Provision for income taxes for the first quarter of fiscal 2026 includes the impact of the One, Big, Beautiful Bill Act, which was signed into law on July 4, 2025.

ORACLE  CORPORATION

Q1 FISCAL 2026 FINANCIAL RESULTS

RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1) 

($ in millions, except per share data)

Three Months Ended August 31,

% Increase (Decrease)
in US $

% Increase (Decrease) in Constant Currency (2) 

2025

2025

2024

2024

GAAP

Non-GAAP

GAAP

Non-GAAP

GAAP

Adj.

Non-GAAP

GAAP

Adj.

Non-GAAP

TOTAL REVENUES

$         14,926

$             –

$         14,926

$         13,307

$             –

$         13,307

12 %

12 %

11 %

11 %

TOTAL OPERATING EXPENSES

$         10,649

$     (1,959)

$           8,690

$           9,316

$     (1,717)

$           7,599

14 %

14 %

14 %

14 %

Stock-based compensation (3)

1,124

(1,124)

–

1,007

(1,007)

–

12 %

*

12 %

*

Amortization of intangible assets (4)

420

(420)

–

624

(624)

–

(33 %)

*

(33 %)

*

Acquisition related and other

13

(13)

–

13

(13)

–

10 %

*

8 %

*

Restructuring

402

(402)

–

73

(73)

–

448 %

*

439 %

*

OPERATING INCOME

$           4,277

$       1,959

$           6,236

$           3,991

$       1,717

$           5,708

7 %

9 %

4 %

7 %

OPERATING MARGIN %

29 %

42 %

30 %

43 %

(133) bp.

(111) bp.

(183) bp.

(144) bp.

INCOME TAX EFFECTS (5)

$              500

$          603

$           1,103

$              240

$          682

$              922

108 %

20 %

101 %

17 %

NET INCOME

$           2,927

$       1,356

$           4,283

$           2,929

$       1,035

$           3,964

0 %

8 %

(4 %)

6 %

DILUTED EARNINGS PER SHARE

$             1.01

$              1.47

$             1.03

$             1.39

(2 %)

6 %

(5 %)

4 %

DILUTED WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING

2,909

–

2,909

2,851

–

2,851

2 %

2 %

2 %

2 %

(1)

This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A. 

(2)

We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in effect on May 31, 2025, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during the respective periods. 

(3)

Stock-based compensation was included in the following GAAP operating expense categories:

Three Months Ended

Three Months Ended

August 31, 2025

August 31, 2024

GAAP

Adj.

Non-GAAP

GAAP

Adj.

Non-GAAP

Cloud and software

$               156

$        (156)

$                  –

$               141

$        (141)

$                  –

Hardware

7

(7)

–

6

(6)

–

Services

49

(49)

–

43

(43)

–

Sales and marketing

177

(177)

–

162

(162)

–

Research and development

647

(647)

–

569

(569)

–

General and administrative

88

(88)

–

86

(86)

–

           Total stock-based compensation

$           1,124

$     (1,124)

$                  –

$           1,007

$     (1,007)

$                  –

(4)

Estimated future annual amortization expense related to intangible assets as of August 31, 2025 was as follows:

Remainder of fiscal 2026

$           1,219

Fiscal 2027

672

Fiscal 2028

635

Fiscal 2029

561

Fiscal 2030

522

Fiscal 2031

332

Thereafter

226

           Total intangible assets, net

$           4,167

(5)

Income tax effects were calculated reflecting an effective GAAP tax rate of 14.6% and 7.6% in the first quarter of fiscal 2026 and 2025, respectively, and an effective non-GAAP tax rate of 20.5% and 18.9% in the first quarter of fiscal 2026 and 2025, respectively. The difference in our GAAP and non-GAAP tax rates in the first quarter of fiscal 2026 was primarily due to the net tax effects related to stock-based compensation expense; acquisition related and other items, including the tax effects on amortization of intangible assets; and restructuring expense, partially offset by the impact of the One, Big, Beautiful Bill Act (refer to Appendix A for additional information), and net deferred tax effects related to an income tax benefit that was previously recorded due to the partial realignment of our legal entity structure. The difference in our GAAP and non-GAAP tax rates in the first quarter of fiscal 2025 was primarily due to the net tax effects related to stock-based compensation expense; acquisition related and other items, including the tax effects on amortization of intangible assets; and restructuring expense, partially offset by the net deferred tax effects related to an income tax benefit that was previously recorded due to the partial realignment of our legal entity structure.

*

Not meaningful

ORACLE  CORPORATION

Q1 FISCAL 2026 FINANCIAL RESULTS

CONDENSED CONSOLIDATED BALANCE SHEETS

($ in millions)

August 31,

2025

ASSETS

Current Assets:

Cash and cash equivalents

$               10,445

$               10,786

Marketable securities

560

417

Trade receivables, net

8,843

8,558

Prepaid expenses and other current assets

4,786

4,818

Total Current Assets

24,634

24,579

Non-Current Assets:

   Property, plant and equipment, net

53,194

43,522

   Intangible assets, net

4,167

4,587

   Goodwill

62,211

62,207

   Deferred tax assets

11,734

11,877

   Other non-current assets

24,509

21,589

Total Non-Current Assets

155,815

143,782

TOTAL ASSETS

$             180,449

$             168,361

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:

Notes payable and other borrowings, current 

$                 9,079

$                 7,271

Accounts payable

8,203

5,113

Accrued compensation and related benefits

1,794

2,243

Deferred revenues

12,098

9,387

Other current liabilities

8,700

8,629

Total Current Liabilities

39,874

32,643

Non-Current Liabilities:

Notes payable and other borrowings, non-current

82,236

85,297

Income taxes payable

10,583

10,269

Operating lease liabilities

14,094

11,536

Other non-current liabilities

8,996

7,647

Total Non-Current Liabilities

115,909

114,749

Stockholders’ Equity

24,666

20,969

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$             180,449

$             168,361

     ORACLE  CORPORATION 

Q1 FISCAL 2026 FINANCIAL RESULTS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

($ in millions)

Cash Flows From Operating Activities:

Net income 

$         2,927

$         2,929

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

1,351

804

Amortization of intangible assets

420

624

Deferred income taxes

515

(151)

Stock-based compensation

1,124

1,007

Other, net

164

130

Changes in operating assets and liabilities:

Increase in trade receivables, net

(245)

(81)

Decrease in prepaid expenses and other assets

59

367

Decrease in accounts payable and other liabilities

(334)

(531)

(Decrease) increase in income taxes payable

(391)

24

Increase in deferred revenues

2,550

2,305

Net cash provided by operating activities

8,140

7,427

Cash Flows From Investing Activities:

Purchases of marketable securities and other investments

(471)

(477)

Proceeds from sales and maturities of marketable securities and other investments

255

15

Capital expenditures

(8,502)

(2,303)

Net cash used for investing activities

(8,718)

(2,765)

Cash Flows From Financing Activities:

Payments for repurchases of common stock

(95)

(150)

Proceeds from issuances of common stock

1,170

179

Shares repurchased for tax withholdings upon vesting of restricted stock-based awards

(17)

(851)

Payments of dividends to stockholders

(1,413)

(1,103)

Repayments of commercial paper, net

(238)

(396)

Proceeds from issuances of term loan credit agreements

–

5,627

Repayments of senior notes and other borrowings

(1,052)

(7,630)

Other financing activities, net

1,855

(261)

Net cash provided by (used for) financing activities

210

(4,585)

Effect of exchange rate changes on cash and cash equivalents

27

85

Net (decrease) increase in cash and cash equivalents

(341)

162

Cash and cash equivalents at beginning of period

10,786

10,454

Cash and cash equivalents at end of period

$       10,445

$       10,616

 ORACLE  CORPORATION 

 Q1 FISCAL 2026 FINANCIAL RESULTS 

 FREE CASH FLOW – TRAILING 4-QUARTERS (1) 

 ($ in millions) 

 Fiscal 2025 

 Fiscal 2026 

 Q2 

 Q3 

 Q4 

 Q1 

 Q2 

 Q3 

 Q4 

GAAP Operating Cash Flow

$             19,126

$             20,287

$             20,745

$             20,821

$             21,534

Capital Expenditures

(7,855)

(10,745)

(14,933)

(21,215)

(27,414)

Free Cash Flow

$             11,271

$               9,542

$               5,812

$                (394)

$             (5,880)

Operating Cash Flow % Growth over prior year

8 %

19 %

14 %

12 %

13 %

Free Cash Flow % Growth over prior year

19 %

(6 %)

(53 %)

(103 %)

(152 %)

GAAP Net Income

$             10,976

$             11,624

$             12,160

$             12,443

$             12,441

Operating Cash Flow as a % of Net Income

174 %

175 %

171 %

167 %

173 %

Free Cash Flow as a % of Net Income

103 %

82 %

48 %

(3 %)

(47) %

To supplement our statements of cash flows presented on a GAAP basis, we use non-GAAP measures of cash flows on a trailing 4-quarter basis to analyze cash flow generated from operations. We believe free cash flow is also useful as one of the bases for comparing our performance with 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.

 ORACLE  CORPORATION 

 Q1 FISCAL 2026 FINANCIAL RESULTS 

 SUPPLEMENTAL ANALYSIS OF GAAP REVENUES (1) 

 ($ in millions) 

 Fiscal 2025 

 Fiscal 2026 

 Q1 

 Q2 

 Q3 

 Q4 

 TOTAL 

 Q1 

 Q2 

 Q3 

 Q4 

 TOTAL 

REVENUES BY OFFERINGS

 Cloud 

$      5,623

$      5,937

$      6,210

$      6,737

$      24,506

$      7,186

$        7,186

 Software license 

870

1,195

1,129

2,007

5,201

766

766

 Software support 

4,896

4,869

4,797

4,961

19,523

4,955

4,955

 Software 

5,766

6,064

5,926

6,968

24,724

5,721

5,721

 Hardware 

655

728

703

850

2,936

670

670

 Services  

1,263

1,330

1,291

1,348

5,233

1,349

1,349

Total revenues 

$    13,307

$    14,059

$    14,130

$    15,903

$      57,399

$    14,926

$      14,926

AS REPORTED REVENUE GROWTH RATES 

 Cloud 

21 %

24 %

23 %

27 %

24 %

28 %

28 %

 Software license 

7 %

1 %

(10 %)

9 %

2 %

(12 %)

(12 %)

 Software support 

0 %

0 %

(2 %)

1 %

0 %

1 %

1 %

 Software 

1 %

0 %

(4 %)

3 %

0 %

(1 %)

(1 %)

 Hardware 

(8 %)

(4 %)

(7 %)

1 %

(4 %)

2 %

2 %

 Services  

(9 %)

(3 %)

(1 %)

(2 %)

(4 %)

7 %

7 %

Total revenues 

7 %

9 %

6 %

11 %

8 %

12 %

12 %

CONSTANT CURRENCY REVENUE GROWTH RATES (2)

 Cloud 

22 %

24 %

25 %

27 %

24 %

27 %

27 %

 Software license 

8 %

3 %

(8 %)

8 %

3 %

(13 %)

(13 %)

 Software support 

0 %

0 %

0 %

0 %

0 %

(1 %)

(1 %)

 Software 

1 %

0 %

(2 %)

2 %

1 %

(2 %)

(2 %)

 Hardware  

(8 %)

(3 %)

(5 %)

0 %

(4 %)

1 %

1 %

 Services  

(8 %)

(3 %)

1 %

(2 %)

(3 %)

5 %

5 %

Total revenues 

8 %

9 %

8 %

11 %

9 %

11 %

11 %

 Cloud applications 

$      3,469

$      3,503

$      3,558

$      3,742

$      14,272

$      3,839

$        3,839

 Cloud infrastructure 

2,154

2,434

2,652

2,995

10,234

3,347

3,347

Total cloud revenues 

$      5,623

$      5,937

$      6,210

$      6,737

$      24,506

$      7,186

$        7,186

AS REPORTED REVENUE GROWTH RATES 

 Cloud applications 

10 %

10 %

9 %

12 %

10 %

11 %

11 %

 Cloud infrastructure 

45 %

52 %

49 %

52 %

50 %

55 %

55 %

Total cloud revenues 

21 %

24 %

23 %

27 %

24 %

28 %

28 %

CONSTANT CURRENCY REVENUE GROWTH RATES (2)

 Cloud applications 

10 %

10 %

10 %

11 %

10 %

10 %

10 %

 Cloud infrastructure 

46 %

52 %

51 %

52 %

51 %

54 %

54 %

Total cloud revenues 

22 %

24 %

25 %

27 %

24 %

27 %

27 %

Americas 

$      8,372

$      8,933

$      9,000

$    10,034

$      36,339

$      9,662

$        9,662

Europe/Middle East/Africa 

3,228

3,381

3,421

3,996

14,025

3,481

3,481

Asia Pacific 

1,707

1,745

1,709

1,873

7,035

1,783

1,783

Total revenues 

$    13,307

$    14,059

$    14,130

$    15,903

$      57,399

$    14,926

$      14,926

(1)

The sum of the quarterly information presented may vary from the year-to-date information presented due to rounding.

(2)

We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in effect on May 31, 2025 and 2024 for the fiscal 2026 and fiscal 2025 constant currency growth rate calculations presented, respectively, rather than the actual exchange rates in effect during the respective periods.