Oracle Corp (ORCL) 10-K 2026: AI Summary

Full summary

The Print

Oracle's fiscal 2026 total revenues rose 17% to $67.4B, net income increased to $17.1B and diluted EPS reached $5.83, while capital expenditures of $55.7B drove free cash flow to negative $23.7B.

Total revenues increased by $10.0 billion in reported currency in fiscal 2026 relative to fiscal 2025 due to a $9.3 billion increase in cloud and software revenues, a $510 million increase in services revenues and a $148 million increase in hardware revenues. The increase in cloud and software revenues was primarily due to growth in cloud revenues as customers purchased applications and infrastructure technologies and renewed related cloud contracts. Total GAAP operating expenses increased by $7.0 billion, primarily due to a $6.0 billion increase in cloud and software expenses primarily due to higher infrastructure expenses. Cash used for capital expenditures increased from $21.2 billion in fiscal 2025 to $55.7 billion in fiscal 2026 primarily due to the expansion of data centers.

Total revenues increased 17% in reported currency to $67.4B, with cloud and software revenues of $58.5B (87% of total) and cloud revenues representing 51% of total revenues.
Net income was $17.1B and diluted EPS was $5.83, versus $12.4B and $4.34 in fiscal 2025.
Capital expenditures rose to $55.7B from $21.2B, and free cash flow was negative $23.7B versus negative $394M in fiscal 2025.
Remaining performance obligations were $638B as of May 31, 2026, compared with $138B as of May 31, 2025.

Results That Matter

Total revenues
Current period
$67.4B
Prior period
$57.4B
Change
+17.3%
The increase was due to a $9.3 billion increase in cloud and software revenues, a $510 million increase in services revenues and a $148 million increase in hardware revenues.
Operating income
Current period
$20.6B
Prior period
$17.7B
Change
+16.6%
Total operating margin increased due to higher revenues; total margin as a percentage of revenues remained flat.
Net income
Current period
$17.1B
Prior period
$12.4B
Change
+37.3%
Non-operating income, net increased by $3.5 billion primarily due to a $2.7 billion gain from the sale of the investment in Ampere.
Diluted earnings per share
Current period
$5.83
Prior period
$4.34
Change
+34.3%
Net income available to common shareholders was $16,984 million after preferred stock dividends of $103 million.
Basic earnings per share
Current period
$5.94
Prior period
$4.46
Change
+33.2%
Weighted average basic shares outstanding were 2,860 million versus 2,789 million.

Financial highlights: current period, prior period, change, and investor takeaway per metric
Metric	Current Period	Prior Period	Change	Investor Takeaway
Total revenues	$67.4B	$57.4B	+17.3%	The increase was due to a $9.3 billion increase in cloud and software revenues, a $510 million increase in services revenues and a $148 million increase in hardware revenues.
Operating income	$20.6B	$17.7B	+16.6%	Total operating margin increased due to higher revenues; total margin as a percentage of revenues remained flat.
Net income	$17.1B	$12.4B	+37.3%	Non-operating income, net increased by $3.5 billion primarily due to a $2.7 billion gain from the sale of the investment in Ampere.
Diluted earnings per share	$5.83	$4.34	+34.3%	Net income available to common shareholders was $16,984 million after preferred stock dividends of $103 million.
Basic earnings per share	$5.94	$4.46	+33.2%	Weighted average basic shares outstanding were 2,860 million versus 2,789 million.

What changed

Year over year, against the 10-K for the year ended May 31, 2025.

Prior 10-K

Revenue up 17.4%; Net income up 37.3%

Metric	Prior	Current	Change	Read as
Revenue	$57.4B	$67.4B	+17.3%	Favorable
Net income	$12.4B	$17.1B	+37.3%	Favorable
EPS	$4.46	$5.94	+33.2%	Favorable

Revenue+17.3%
Prior $57.4B, current $67.4BFavorable
Net income+37.3%
Prior $12.4B, current $17.1BFavorable
EPS+33.2%
Prior $4.46, current $5.94Favorable

▲ and ▼ show the direction of each change. Color and “Read as” show whether that direction is usually favorable for the metric.

Earnings Quality & Cash Conversion

GAAP net income of $17,087 million included amortization of intangible assets of $1,671 million, restructuring and other of $1,838 million, stock-based compensation of $4,811 million and income tax effects of $(3,070) million. Non-operating income, net of $3,547 million included a $2.7 billion gain from the sale of the investment in Ampere. The filing states that excluding these items, the effective tax rate would have been 19.9% instead of 12.6% for fiscal 2026.

Red flag

Trade receivables, net increased to $10,385 million from $8,558 million, while total revenues increased 17.3%.

Red flag

Free cash flow was negative $23,686 million as capital expenditures of $55,663 million exceeded net cash provided by operating activities of $31,977 million.

Value Drivers & Capital Allocation

Capital returned — dividends paid $5.8B (prior $4.7B), share repurchases $95.0M (prior $600.0M); capital expenditures $55.7B (prior $21.2B) (selected cash-flow amount, not necessarily total capital investment).

“During fiscal 2026, we issued a total of $43.0 billion par value of senior notes comprising the following:”
— Filing statement

“Cash used for capital expenditures increased from $21.2 billion in fiscal 2025 to $55.7 billion in fiscal 2026 primarily due to the expansion of our data centers.”
— Filing statement

“In fiscal 2026, we declared and paid aggregate cash dividends of $1,263.89 per share of outstanding Mandatory Convertible Preferred Stock that totaled $63 million and $2.00 per share of outstanding common stock that totaled $5.7 billion.”
— Filing statement

Return on equity was 40.2% (prior 60.8%) (period net income / period-end equity, not annualized); return on assets 6.5% (prior 7.4%) (period net income / period-end assets, not annualized).

Forward Signals

The filing states that cloud and software expenses have grown in recent periods and that this trend is expected to continue during fiscal 2027 and in the next few fiscal years as data center capacity is increased and data centers are established in new geographic locations. It also states that the upward trend in capital expenditures is expected to continue during fiscal 2027 and in the following fiscal years.

Known trends

Cloud revenues represented 51% and 43% of total revenues during fiscal 2026 and 2025, respectively, and the filing states it expects this trend to continue.
The filing states it expects total cloud and software revenues generally will continue to increase on a constant currency basis due to expected growth in cloud offerings and continued demand for software offerings.

Subsequent events

In June 2026, the Board declared a quarterly cash dividend of $1,625 per share of outstanding Mandatory Convertible Preferred Stock and $0.50 per share of outstanding common stock.

“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.”
— Oracle Corporation

“We expect this upward trend to continue during fiscal 2027 and in the following 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 for our cloud offerings.”
— Oracle Corporation

Risks

Excerpts are the filing’s own words; each heading is the start of its excerpt. Selected excerpts are not a complete risk inventory.

To grow our OCI business, which requires increased computing capacity, we must incur significant…
To grow our OCI business, which requires increased computing capacity, we must incur significant capital and operating expenditures to increase our existing data center capacity and to establish data centers in new geographic locations.
In certain OCI offerings, we are more concentrated among a number of large customers…
In certain OCI offerings, we are more concentrated among a number of large customers, which could increase these risks.
We have made significant investments in AI initiatives, including investments in infrastructure…
We have made significant investments in AI initiatives, including investments in infrastructure and headcount, and we expect to continue to invest significant resources to build and support our AI products in support of our growth strategy.
For example, industry supply capacity for AI accelerators, including graphics processing units…
For example, industry supply capacity for AI accelerators, including graphics processing units, as well as memory devices, is competitive, and we at times have to accept less favorable terms with suppliers to minimize supply constraints.

4 of 4 excerpts located in the filing text

Segments

Segments
Segment	Revenue	Operating Income	Revenue Change	Commentary
Cloud and Software	$58.5B	$34.5B	+18.9%	59% operating margin — Cloud applications and cloud infrastructure contributed 16% and 84%, respectively, to the constant currency growth in cloud revenues; software license revenues declined 9% in reported currency.
Services	$5.7B	$1.5B	+9.7%	27% operating margin — The increase in revenues was attributable to an increase in consulting services revenues; total expenses decreased 1% in reported currency.
Hardware	$3.1B	$2.0B	+5.0%	65% operating margin — The increase in revenues was primarily due to the growth in revenues from Oracle Exadata and certain other strategic hardware product offerings.

Balance Sheet & Liquidity

Leverage: This filing's standardized financial data reports no debt balance under a concept whose scope can be verified. That is an unestablished scope, not zero debt and not a net cash position; no total debt, net debt or debt-to-equity figure is stated.

Liquidity: Cash, cash equivalents and marketable securities were $31.9B, up 185% from $11.2B; the company had a $10.0B five-year revolving credit agreement with no outstanding borrowings and a $10.0B commercial paper program with $1.5B outstanding.

Cash flow: Cash flow — operating $32.0B, investing $-51.9B, financing $40.3B.

Working capital: Current assets $46.6B vs. current liabilities $41.8B (current ratio 1.12x). Prior reported balance sheet as of 2025-05-31: $24.6B vs. $32.6B (0.75x).

Maturities & covenants

During fiscal 2026, the company issued a total of $43.0 billion par value of senior notes with maturities ranging from February 2029 to February 2066.
As of May 31, 2026, approximately $6.3 billion remained available for stock repurchases pursuant to the stock repurchase program.

Notable Footnotes

Notable Footnotes
Item	Impact
Ampere investment sale	The company received cash proceeds of $4.3 billion and recorded a $2.7 billion realized gain included in non-operating income (expenses), net.
Remaining performance obligations	Remaining performance obligations were $638 billion as of May 31, 2026, of which approximately 12% is expected to be recognized as revenues over the next twelve months.
Customer prepayments with significant financing component	During fiscal 2026, the company received $4.6 billion of prepayments from customers that included a significant financing component; no such prepayments were received in fiscal 2025 and 2024.

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AI-generated. Informational only, not investment advice. May be incomplete or contain errors. The authoritative source is always the original SEC filing.