Oracle(ORCL) - 2026 Q1 - Quarterly Results

Fiscal Year 2026 First Quarter Overview Oracle's Q1 FY26 results show strong Cloud revenue growth and a significant increase in Remaining Performance Obligations Key Financial Highlights Oracle reported strong Q1 FY26 financial results, driven by significant Cloud revenue growth and increased Remaining Performance Obligations Key Financial Metrics | Metric | Q1 FY26 (USD) | YoY Change (USD) | YoY Change (Constant Currency) | | :-------------------------------- | :-------------- | :--------------- | :----------------------------- | | Total Remaining Performance Obligations | $455 billion | 359% | 359% | | Total Quarterly Revenues | $14.9 billion | 12% | 11% | | Cloud Revenues | $7.2 billion | 28% | 27% | | Software Revenues | $5.7 billion | (1%) | (2%) | | GAAP Operating Income | $4.3 billion | - | - | | Non-GAAP Operating Income | $6.2 billion | 9% | 7% | | GAAP Net Income | $2.9 billion | - | - | | Non-GAAP Net Income | $4.3 billion | 8% | 6% | | GAAP EPS | $1.01 | (2%) | (5%) | | Non-GAAP EPS | $1.47 | 6% | 4% | | Short-term Deferred Revenues | $12.1 billion | - | - | | LTM Operating Cash Flow | $21.5 billion | 13% | - | - Cloud Infrastructure (IaaS) Revenue grew 55% in USD (54% in constant currency) to $3.3 billion[6] - Cloud Application (SaaS) Revenue grew 11% in USD (10% in constant currency) to $3.8 billion[6] Management Commentary and Strategic Outlook Management highlighted significant RPO growth driven by multi-billion dollar contracts, projected strong OCI expansion, and announced a new Oracle AI Database service - Oracle signed four multi-billion-dollar contracts in Q1, leading to a 359% increase in RPO to $455 billion[5] - Oracle Cloud Infrastructure (OCI) revenue is projected to grow 77% to $18 billion in FY26, and further to $144 billion over the subsequent four years[5] - MultiCloud database revenue from Amazon, Google, and Microsoft surged by 1,529% in Q1, with plans to deliver 37 more datacenters to hyperscaler partners[5] - Oracle will introduce a new 'Oracle AI Database' Cloud Infrastructure service, enabling customers to use various Large Language Models directly on Oracle Database for data access and analysis[5] Dividend Declaration Oracle's board of directors declared a quarterly cash dividend of $0.50 per share of outstanding common stock - A quarterly cash dividend of $0.50 per share of common stock was declared, payable on October 23, 2025, to stockholders of record as of October 9, 2025[5] Company Information and Disclosures This section provides an overview of Oracle's business, forward-looking statements, and available investor resources About Oracle Oracle Corporation provides integrated suites of applications and secure, autonomous infrastructure within the Oracle Cloud, with trademarks including Oracle, Java, MySQL, and NetSuite - Oracle offers integrated application suites and secure, autonomous infrastructure in the Oracle Cloud[9] - Key trademarks include Oracle, Java, MySQL, and NetSuite, with NetSuite recognized as the first cloud company[9] Safe Harbor Statement The report contains forward-looking statements subject to material risks and uncertainties, including product development, cloud management, and cybersecurity concerns - Statements about future plans, expectations, and growth (e.g., RPO, OCI, MultiCloud revenue) are forward-looking and subject to risks[10] - Risks include developing new products, managing cloud/hardware offerings, securing datacenter capacity, coding errors, acquisitions, government contracts, economic conditions, IT failures, and cybersecurity breaches[10] Additional Information and Resources Oracle provides various online resources for investors, customers, and analysts, including SEC filings, technical innovations, and analyst reports - A list of recent technical innovations and announcements is available at www.oracle.com/news/[11](index=11&type=chunk) - Industry analyst reports on Oracle's products and services can be found at www.oracle.com/corporate/analyst-reports/[11](index=11&type=chunk) - SEC filings are available online from the SEC or Oracle's Investor Relations website[10] Condensed Consolidated Financial Statements (GAAP) This section presents Oracle's GAAP financial statements, including statements of operations, balance sheets, and cash flows Condensed Consolidated Statements of Operations Oracle's Q1 FY26 GAAP operating income increased despite rising operating expenses, while net income remained flat and diluted EPS slightly decreased GAAP Statements of Operations (in millions USD) | Metric (in millions) | Q1 FY26 (2025) | Q1 FY25 (2024) | YoY Change (US $) | YoY Change (Constant Currency) | | :------------------- | :------------- | :------------- | :---------------- | :----------------------------- | | Total Revenues | $14,926 | $13,307 | 12% | 11% | | Cloud Revenues | $7,186 | $5,623 | 28% | 27% | | Software Revenues | $5,721 | $5,766 | (1%) | (2%) | | Total Operating Expenses | $10,649 | $9,316 | 14% | 14% | | Operating Income | $4,277 | $3,991 | 7% | 4% | | Net Income | $2,927 | $2,929 | 0% | (4%) | | Diluted EPS | $1.01 | $1.03 | (2%) | (5%) | - Cloud and software operating expenses increased by 39% to $3.607 billion, while restructuring expenses surged by 448% to $402 million[13] - Provision for income taxes increased by 108% to $500 million, partly due to the 'One, Big, Beautiful Bill Act'[13] Condensed Consolidated Balance Sheets Oracle's total assets increased to $180.4 billion as of August 31, 2025, driven by property, plant and equipment, with a corresponding rise in total liabilities GAAP Balance Sheets (in millions USD) | Metric (in millions) | August 31, 2025 | May 31, 2025 | | :------------------- | :-------------- | :----------- | | Total Current Assets | $24,634 | $24,579 | | Property, plant and equipment, net | $53,194 | $43,522 | | Total Non-Current Assets | $155,815 | $143,782 | | TOTAL ASSETS | $180,449 | $168,361 | | Total Current Liabilities | $39,874 | $32,643 | | Total Non-Current Liabilities | $115,909 | $114,749 | | Stockholders' Equity | $24,666 | $20,969 | | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $180,449 | $168,361 | - Property, plant and equipment, net, increased by $9.672 billion from May 31, 2025, to August 31, 2025[21] - Deferred revenues (current liability) increased by $2.711 billion to $12.098 billion[21] Condensed Consolidated Statements of Cash Flows Q1 FY26 saw increased net cash from operating activities, but a significant rise in capital expenditures led to a substantial increase in net cash used for investing activities GAAP Statements of Cash Flows (in millions USD) | Metric (in millions) | Q1 FY26 (2025) | Q1 FY25 (2024) | | :------------------- | :------------- | :------------- | | Net cash provided by operating activities | $8,140 | $7,427 | | Net cash used for investing activities | $(8,718) | $(2,765) | | Net cash provided by (used for) financing activities | $210 | $(4,585) | | Net (decrease) increase in cash and cash equivalents | $(341) | $162 | | Cash and cash equivalents at end of period | $10,445 | $10,616 | - Capital expenditures dramatically increased to $8.502 billion in Q1 FY26 from $2.303 billion in Q1 FY25[23] - Proceeds from issuances of common stock were $1.170 billion in Q1 FY26, compared to $179 million in Q1 FY25[23] Non-GAAP Financial Measures and Reconciliations This section details Oracle's non-GAAP financial measures, their reconciliation to GAAP, and the rationale for their use Reconciliation of Selected GAAP Measures to Non-GAAP Measures Oracle reconciles GAAP to non-GAAP measures by adjusting for items like stock-based compensation and restructuring, resulting in higher non-GAAP operating income and net income GAAP to Non-GAAP Reconciliation (in millions USD) | Metric (in millions) | GAAP Q1 FY26 | Non-GAAP Q1 FY26 | GAAP Q1 FY25 | Non-GAAP Q1 FY25 | Non-GAAP YoY Change (US $) | Non-GAAP YoY Change (Constant Currency) | | :------------------- | :----------- | :--------------- | :----------- | :--------------- | :------------------------- | :-------------------------------------- | | Total Revenues | $14,926 | $14,926 | $13,307 | $13,307 | 12% | 11% | | Total Operating Expenses | $10,649 | $8,690 | $9,316 | $7,599 | 14% | 14% |\ | Operating Income | $4,277 | $6,236 | $3,991 | $5,708 | 9% | 7% | | Operating Margin % | 29% | 42% | 30% | 43% | (111) bp. | (144) bp. | | Net Income | $2,927 | $4,283 | $2,929 | $3,964 | 8% | 6% | | Diluted EPS | $1.01 | $1.47 | $1.03 | $1.39 | 6% | 4% | - Key adjustments for non-GAAP calculations in Q1 FY26 included $1.124 billion for stock-based compensation, $420 million for amortization of intangible assets, $13 million for acquisition-related and other expenses, and $402 million for restructuring[15] - The effective non-GAAP tax rate for Q1 FY26 was 20.5%, compared to the GAAP tax rate of 14.6%[16] Free Cash Flow - Trailing 4-Quarters Trailing 4-quarter GAAP operating cash flow grew to $21.534 billion, but free cash flow turned negative due to a substantial increase in capital expenditures Trailing 4-Quarters Free Cash Flow (in millions USD) | Metric (in millions) | Q1 FY25 | Q2 FY25 | Q3 FY25 | Q4 FY25 | Q1 FY26 | | :------------------- | :------ | :------ | :------ | :------ | :------ | | 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%) | - Free Cash Flow as a % of Net Income was (47%) in Q1 FY26, down from 103% in Q1 FY25, reflecting increased capital investments[25] Explanation of Non-GAAP Measures Oracle utilizes non-GAAP measures to present core business performance by excluding specific non-recurring or non-cash items, aiding internal evaluation and forecasting - Non-GAAP measures exclude stock-based compensation, amortization of intangible assets, acquisition-related and other expenses, restructuring expenses, and the tax impact of the 'One, Big, Beautiful Bill Act'[31][32][33][34] - These adjustments are made to help understand past financial performance, future results, and to provide a framework for assessing underlying business performance[31] - The 'One, Big, Beautiful Bill Act' (OBBBA), signed into law on July 4, 2025, resulted in a net tax expense of $958 million in Q1 FY26, which is excluded from non-GAAP income taxes and net income[34] Supplemental Analysis of GAAP Revenues This section provides a detailed breakdown of Oracle's GAAP revenues by offerings and geographic regions Revenues by Offerings Oracle's total revenues grew 12% to $14.926 billion in Q1 FY26, primarily driven by strong Cloud revenue growth, despite a slight decline in software revenues Revenues by Offerings (in millions USD) | Revenue Category (in millions) | Q1 FY26 | Q1 FY25 | YoY Growth (US $) | YoY Growth (Constant Currency) | | :----------------------------- | :------ | :------ | :---------------- | :----------------------------- | | Cloud | $7,186 | $5,623 | 28% | 27% | | Software license | $766 | $870 | (12%) | (13%) | | Software support | $4,955 | $4,896 | 1% | (1%) | | Software (Total) | $5,721 | $5,766 | (1%) | (2%) | | Hardware | $670 | $655 | 2% | 1% | | Services | $1,349 | $1,263 | 7% | 5% | | Total revenues | $14,926 | $13,307 | 12% | 11% | Cloud Revenues by Offerings Cloud revenues showed robust growth, with Cloud Infrastructure (IaaS) leading at 55% to $3.347 billion, complemented by Cloud Applications (SaaS) growth Cloud Revenues by Offerings (in millions USD) | Cloud Revenue Category (in millions) | Q1 FY26 | Q1 FY25 | YoY Growth (US $) | YoY Growth (Constant Currency) | | :----------------------------------- | :------ | :------ | :---------------- | :----------------------------- | | Cloud applications | $3,839 | $3,469 | 11% | 10% | | Cloud infrastructure | $3,347 | $2,154 | 55% | 54% | | Total cloud revenues | $7,186 | $5,623 | 28% | 27% | Geographic Revenues The Americas remained Oracle's largest revenue contributor with 15% growth, while Europe/Middle East/Africa and Asia Pacific also demonstrated positive revenue increases Geographic Revenues (in millions USD) | Geographic Region (in millions) | Q1 FY26 | Q1 FY25 | YoY Growth (US $) | | :------------------------------ | :------ | :------ | :---------------- | | Americas | $9,662 | $8,372 | 15% | | Europe/Middle East/Africa | $3,481 | $3,228 | 8% | | Asia Pacific | $1,783 | $1,707 | 4% | | Total revenues | $14,926 | $13,307 | 12% |