Oracle(ORCL) - 2026 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents Oracle Corporation's unaudited condensed consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures Item 1. Financial Statements (Unaudited) This section presents Oracle Corporation's unaudited condensed consolidated financial statements for the three months ended August 31, 2025 and 2024, including balance sheets, statements of operations, comprehensive income, stockholders' equity, and cash flows, along with detailed notes covering accounting policies, fair value measurements, restructuring activities, deferred revenues, leases, stockholders' equity, income taxes, segment information, earnings per share, and legal proceedings Condensed Consolidated Balance Sheets This section provides a snapshot of Oracle's financial position, detailing assets, liabilities, and equity as of August 31, 2025, and May 31, 2025 | Metric | Aug 31, 2025 (millions) | May 31, 2025 (millions) | Change (millions) | | :-------------------------------- | :---------------------- | :---------------------- | :---------------- | | Total Assets | $180,449 | $168,361 | $12,088 | | Property, plant and equipment, net | $53,194 | $43,522 | $9,672 | | Total Current Liabilities | $39,874 | $32,643 | $7,231 | | Notes payable and other borrowings, current | $9,079 | $7,271 | $1,808 | | Deferred revenues | $12,098 | $9,387 | $2,711 | | Total Stockholders' Equity | $24,666 | $20,969 | $3,697 | Condensed Consolidated Statements of Operations This section outlines Oracle's financial performance, presenting revenues, expenses, operating income, and net income for the three months ended August 31, 2025 and 2024 | Metric | 3 Months Ended Aug 31, 2025 (millions) | 3 Months Ended Aug 31, 2024 (millions) | YoY Change (%) | | :-------------------------------- | :------------------------------------- | :------------------------------------- | :------------- | | Total Revenues | $14,926 | $13,307 | 12% | | Cloud Revenues | $7,186 | $5,623 | 28% | | Software Revenues | $5,721 | $5,766 | -1% | | Total Operating Expenses | $10,649 | $9,316 | 14% | | Operating Income | $4,277 | $3,991 | 7% | | Net Income | $2,927 | $2,929 | 0% | | Diluted EPS | $1.01 | $1.03 | -2% | Condensed Consolidated Statements of Comprehensive Income This section details Oracle's comprehensive income, including net income and other comprehensive income components, for the three months ended August 31, 2025 and 2024 | Metric | 3 Months Ended Aug 31, 2025 (millions) | 3 Months Ended Aug 31, 2024 (millions) | YoY Change (millions) | | :-------------------------------- | :------------------------------------- | :------------------------------------- | :-------------------- | | Net Income | $2,927 | $2,929 | -$2 | | Net foreign currency translation gains | $28 | $220 | -$192 | | Total other comprehensive income, net | $5 | $104 | -$99 | | Comprehensive Income | $2,932 | $3,033 | -$101 | Condensed Consolidated Statements of Stockholders' Equity This section presents changes in Oracle's stockholders' equity, including common stock, accumulated deficit, and total equity, for the three months ended August 31, 2025 and 2024 | Metric | 3 Months Ended Aug 31, 2025 (millions) | 3 Months Ended Aug 31, 2024 (millions) | YoY Change (millions) | | :-------------------------------- | :------------------------------------- | :------------------------------------- | :-------------------- | | Common stock and additional paid in capital (end of period) | $39,378 | $33,083 | $6,295 | | Accumulated deficit (end of period) | $(14,054) | $(20,939) | $6,885 | | Total Stockholders' Equity (end of period) | $24,666 | $11,269 | $13,397 | | Cash dividends declared per common share | $0.50 | $0.40 | $0.10 | Condensed Consolidated Statements of Cash Flows This section summarizes Oracle's cash inflows and outflows from operating, investing, and financing activities for the three months ended August 31, 2025 and 2024 | Metric | 3 Months Ended Aug 31, 2025 (millions) | 3 Months Ended Aug 31, 2024 (millions) | YoY Change (%) | | :-------------------------------- | :------------------------------------- | :------------------------------------- | :------------- | | Net cash provided by operating activities | $8,140 | $7,427 | 10% | | Net cash used for investing activities | $(8,718) | $(2,765) | 215% | | Capital expenditures | $(8,502) | $(2,303) | 269% | | Net cash provided by (used for) financing activities | $210 | $(4,585) | N/A (shift from outflow to inflow) | | Cash and cash equivalents at end of period | $10,445 | $10,616 | -2% | Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements, covering accounting policies, estimates, and specific financial items 1. BASIS OF PRESENTATION, RECENT ACCOUNTING PRONOUNCEMENTS AND OTHER This note outlines the basis of financial statement presentation, discusses recent accounting pronouncements, and provides additional financial details including remaining performance obligations and investments - Remaining performance obligations were $455.3 billion as of August 31, 2025, with approximately 10% expected to be recognized as revenues over the next twelve months[31] - Financing receivables sold to financial institutions were $756 million for the three months ended August 31, 2025, up from $595 million in the prior year[33] - Oracle's total carrying value of investments in Ampere Computing Holdings LLC was $1.7 billion as of August 31, 2025, with an ownership interest of approximately 29%, and SoftBank Group Corp. has an agreement to acquire Ampere, ending Oracle's investment[34] Non-Operating Income, net (millions) | Non-Operating Income, net (millions) | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | | :----------------------------------- | :-------------------------- | :-------------------------- | | Interest income | $103 | $133 | | Foreign currency losses, net | $(31) | $(50) | | Losses from marketable and non-marketable investments, net | $(52) | $(69) | | Total non-operating income, net | $73 | $20 | 2. FAIR VALUE MEASUREMENTS This note details the fair value measurements of Oracle's financial assets and liabilities, including marketable securities and long-term borrowings Fair Value Measurements (millions) | Fair Value Measurements (millions) | Aug 31, 2025 (Total) | May 31, 2025 (Total) | | :--------------------------------- | :------------------- | :------------------- | | Total Assets | $3,737 | $2,859 | | Money market funds | $2,965 | $2,220 | | Time deposits and other | $742 | $585 | - The estimated fair value of senior notes and other long-term borrowings was $81.1 billion as of August 31, 2025, compared to $81.3 billion as of May 31, 2025[46] 3. RESTRUCTURING ACTIVITIES This note describes Oracle's restructuring plans, including estimated costs and expenses recorded in connection with the Fiscal 2026 Oracle Restructuring Plan - Oracle approved the Fiscal 2026 Oracle Restructuring Plan with total estimated costs up to $1.6 billion[47] - $415 million of restructuring expenses were recorded in Q1 FY26 in connection with the 2026 Restructuring Plan[47] 2026 Restructuring Plan Costs (millions) | 2026 Restructuring Plan Costs (millions) | Costs Recorded (3 Months Ended Aug 31, 2025) | Total Expected Program Costs | | :--------------------------------------- | :------------------------------------------- | :--------------------------- | | Cloud and software | $119 | $484 | | Hardware | $16 | $67 | | Services | $36 | $326 | | Other | $244 | $737 | | Total | $415 | $1,614 | 4. DEFERRED REVENUES This note provides a breakdown of Oracle's deferred revenues by business segment, including cloud, software, hardware, and services Deferred Revenues (millions) | Deferred Revenues (millions) | Aug 31, 2025 | May 31, 2025 | Change (millions) | | :--------------------------- | :----------- | :----------- | :---------------- | | Cloud | $3,944 | $2,959 | $985 | | Software | $7,062 | $5,350 | $1,712 | | Hardware | $584 | $614 | $(30) | | Services | $508 | $464 | $44 | | Total deferred revenues | $13,362 | $10,733 | $2,629 | 5. LEASES This note details Oracle's lease expenses, right-of-use assets, lease liabilities, and significant future lease commitments, particularly for data centers Lease Expense (millions) | Lease Expense (millions) | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | | :----------------------- | :-------------------------- | :-------------------------- | | Operating lease cost | $575 | $362 | | Total finance lease cost | $107 | $0 | Lease Balance Sheet Info (millions) | Lease Balance Sheet Info (millions) | Aug 31, 2025 | May 31, 2025 | | :---------------------------------- | :----------- | :----------- | | Operating lease ROU assets | $15,979 | $13,145 | | Total operating lease liabilities | $16,290 | $13,450 | | Finance lease ROU assets | $3,937 | $2,874 | | Total finance lease liabilities | $4,017 | $2,934 | - Oracle had $99.8 billion of additional lease commitments, substantially for data centers, as of August 31, 2025, expected to commence between fiscal 2026 and 2028, with an additional $6.6 billion in lease commitments entered into subsequent to August 31, 2025[50][51] 6. STOCKHOLDERS' EQUITY This note provides information on Oracle's stock repurchase program, cash dividends, and stock-based compensation expenses affecting stockholders' equity - Approximately $6.3 billion remained available for stock repurchases as of August 31, 2025[52] Stock Repurchases | Stock Repurchases | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | | :---------------- | :-------------------------- | :-------------------------- | | Shares repurchased | 0.4 million | 1.1 million | | Value of repurchases | $93 million | $150 million | - A quarterly cash dividend of $0.50 per share was declared in September 2025, payable on October 23, 2025[54] Stock-based Compensation Expense (millions) | Stock-based Compensation Expense (millions) | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | | :---------------------------------------- | :-------------------------- | :-------------------------- | | Cloud and software | $156 | $141 | | Research and development | $647 | $569 | | Total stock-based compensation | $1,124 | $1,007 | 7. INCOME TAXES This note discusses Oracle's effective tax rate, the impact of tax legislation, and changes in net deferred tax assets Income Tax Metric | Income Tax Metric | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | | :---------------- | :-------------------------- | :-------------------------- | | Effective tax rate | 14.6% | 7.6% | - A net tax expense of $958 million was recorded in Q1 FY26 due to the enactment of the U.S. One, Big, Beautiful Bill Act, primarily related to the remeasurement of a deferred tax liability[66][153] - Net deferred tax assets were $9.8 billion as of August 31, 2025, down from $10.2 billion as of May 31, 2025[60] 8. SEGMENT INFORMATION This note presents Oracle's financial performance by operating segment (Cloud and Software, Hardware, Services) and by offering, highlighting revenue contributions - Oracle's three operating segments are Cloud and Software, Hardware, and Services[68] - Cloud and software business represented 86% of total revenues on a trailing four-quarter basis[90] Segment Revenues (millions) | Segment Revenues (millions) | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | YoY Change (%) | | :-------------------------- | :-------------------------- | :-------------------------- | :------------- | | Cloud and software | $12,907 | $11,389 | 13% | | Hardware | $670 | $655 | 2% | | Services | $1,349 | $1,263 | 7% | | Total Revenues | $14,926 | $13,307 | 12% | Revenue by Offering (millions) | Revenue by Offering (millions) | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | YoY Change (%) | | :----------------------------- | :-------------------------- | :-------------------------- | :------------- | | Cloud applications | $3,839 | $3,469 | 11% | | Cloud infrastructure | $3,347 | $2,154 | 55% | | Software license | $766 | $870 | -12% | | Software support | $4,955 | $4,896 | 1% | 9. EARNINGS PER SHARE This note provides basic and diluted earnings per share calculations for Oracle for the three months ended August 31, 2025 and 2024 EPS Metric | EPS Metric | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | YoY Change | | :--------- | :-------------------------- | :-------------------------- | :--------- | | Basic EPS | $1.04 | $1.06 | -$0.02 | | Diluted EPS | $1.01 | $1.03 | -$0.02 | 10. LEGAL PROCEEDINGS This note details Oracle's ongoing legal proceedings, specifically the Netherlands Privacy Class Action, and management's assessment of its potential financial impact - Oracle is defending a Netherlands Privacy Class Action lawsuit alleging violations of GDPR and Dutch Telecommunications Act related to its Data Management Platform product[80] - The Dutch Court of Appeal overturned an earlier dismissal, allowing the case to proceed, and Oracle has filed an interim appeal to the Supreme Court[82][83] - Oracle believes the final outcome will not have a material impact on its financial position or results of operations[84] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides an overview of Oracle's businesses, critical accounting estimates, and a detailed analysis of its financial performance and condition for the three months ended August 31, 2025. It highlights revenue growth driven by cloud and software, increased operating expenses, and changes in liquidity and capital resources, including significant capital expenditures and a shift in financing activities Business Overview This section outlines Oracle's core business segments, the growing contribution of cloud revenues, and its strategy for acquisitions and investments - Oracle's three businesses are cloud and software, hardware, and services, addressing enterprise IT needs globally[89] - Cloud and software business represented 86% of total revenues on a trailing four-quarter basis[90] - Cloud revenues represented 48% of total revenues for Q1 FY26, up from 42% in Q1 FY25, and this trend is expected to continue[92] - Oracle maintains an active acquisition program to further its corporate strategy and may fund future acquisitions through internal cash, operations, or additional borrowings[102][103] - Oracle's investment in Ampere Computing Holdings LLC (29% ownership) had a carrying value of $1.7 billion as of August 31, 2025, and SoftBank Group Corp. has an agreement to acquire Ampere[104][105][106] Critical Accounting Estimates This section identifies Oracle's critical accounting estimates, primarily in income taxes and non-marketable investments, noting no significant changes in the current quarter - Critical accounting estimates are in the areas of income taxes and non-marketable investments[107] - No significant changes to critical accounting estimates occurred during the first quarter of fiscal 2026[108] Results of Operations This section analyzes Oracle's overall financial performance, including total revenues, operating expenses, and operating margin, for the three months ended August 31, 2025 Total Revenues and Operating Expenses | Metric | 3 Months Ended Aug 31, 2025 (millions) | 3 Months Ended Aug 31, 2024 (millions) | YoY Change (%) | | :-------------------------------- | :------------------------------------- | :------------------------------------- | :------------- | | Total Revenues | $14,926 | $13,307 | 12% | | Total Operating Expenses | $10,649 | $9,316 | 14% | | Total Operating Margin | $4,277 | $3,991 | 7% | | Total Operating Margin % | 29% | 30% | -1% | - Total revenues increased by $1.6 billion (12%) in Q1 FY26, with cloud and software revenues contributing $1.5 billion of this growth[116] - Total GAAP operating expenses increased by $1.3 billion (14%) in Q1 FY26, primarily due to a $1.0 billion increase in cloud and software expenses, a $329 million increase in restructuring expenses, and a $185 million increase in R&D expenses[118] Cloud and Software Business This section analyzes the financial performance of Oracle's Cloud and Software business, detailing revenue and expense growth, and margin changes Cloud and Software Metrics | Cloud and Software Metrics | 3 Months Ended Aug 31, 2025 (millions) | 3 Months Ended Aug 31, 2024 (millions) | YoY Change (Actual %) | YoY Change (Constant %) | | :------------------------- | :------------------------------------- | :------------------------------------- | :-------------------- | :---------------------- | | Total Revenues | $12,907 | $11,389 | 13% | 12% | | Total Expenses | $5,216 | $4,193 | 24% | 24% | | Total Margin | $7,691 | $7,196 | 7% | 5% | | Total Margin % | 60% | 63% | -3% | -3% | - Cloud applications and cloud infrastructure contributed 23% and 77%, respectively, to the growth in cloud revenues in Q1 FY26 (constant currency)[124] - Cloud and software expenses increased by $1.0 billion (41% actual, 41% constant currency) primarily due to a $929 million increase in infrastructure expenses and a $41 million increase in employee-related expenses to support cloud growth[125] Hardware Business This section reviews the financial performance of Oracle's Hardware business, focusing on revenue and expense trends, and margin stability Hardware Metrics | Hardware Metrics | 3 Months Ended Aug 31, 2025 (millions) | 3 Months Ended Aug 31, 2024 (millions) | YoY Change (Actual %) | YoY Change (Constant %) | | :--------------- | :------------------------------------- | :------------------------------------- | :-------------------- | :---------------------- | | Total Revenues | $670 | $655 | 2% | 1% | | Total Expenses | $223 | $217 | 3% | 1% | | Total Margin | $447 | $438 | 2% | 1% | | Total Margin % | 67% | 67% | 0% | 0% | - Hardware revenue growth was primarily due to Oracle Exadata and other strategic hardware product offerings[129] - Hardware expenses increased due to a $14 million increase in hardware product and support costs, partially offset by a $12 million decrease in sales and marketing expenses[130] Services Business This section examines the financial performance of Oracle's Services business, highlighting revenue growth and expense reductions leading to improved margins Services Metrics | Services Metrics | 3 Months Ended Aug 31, 2025 (millions) | 3 Months Ended Aug 31, 2024 (millions) | YoY Change (Actual %) | YoY Change (Constant %) | | :--------------- | :------------------------------------- | :------------------------------------- | :-------------------- | :---------------------- | | Total Revenues | $1,349 | $1,263 | 7% | 5% | | Total Expenses | $1,017 | $1,066 | -5% | -5% | | Total Margin | $332 | $197 | 67% | 64% | | Total Margin % | 25% | 16% | 9% | 9% | - Services revenue growth was due to increases across all primary services offerings[133] - Services expenses decreased primarily due to a $55 million decrease in bad debt expenses[134] Research and Development Expenses This section analyzes the trends in Oracle's research and development expenses, attributing increases primarily to employee-related and computer equipment costs R&D Expenses (millions) | R&D Expenses (millions) | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | YoY Change (Actual %) | YoY Change (Constant %) | | :---------------------- | :-------------------------- | :-------------------------- | :-------------------- | :---------------------- | | Total expenses | $2,491 | $2,306 | 8% | 8% | | % of Total Revenues | 17% | 17% | 0% | 0% | - Increase in R&D expenses was primarily due to a $137 million increase in employee-related expenses (including stock-based compensation) and a $38 million increase in computer equipment expenses[138] General and Administrative Expenses This section reviews Oracle's general and administrative expenses, noting an increase primarily due to event sponsorship costs G&A Expenses (millions) | G&A Expenses (millions) | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | YoY Change (Actual %) | YoY Change (Constant %) | | :---------------------- | :-------------------------- | :-------------------------- | :-------------------- | :---------------------- | | Total expenses | $376 | $358 | 5% | 4% | | % of Total Revenues | 2% | 3% | -1% | -1% | - Increase in G&A expenses was primarily due to an increase in event sponsorship expenses[140] Amortization of Intangible Assets This section discusses the decrease in Oracle's amortization of intangible assets, primarily due to certain assets becoming fully amortized Amortization (millions) | Amortization (millions) | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | YoY Change (Actual %) | YoY Change (Constant %) | | :---------------------- | :-------------------------- | :-------------------------- | :-------------------- | :---------------------- | | Total amortization of intangible assets | $420 | $624 | -33% | -33% | - The decrease in amortization was due to a reduction in expenses associated with certain intangible assets that became fully amortized[142] Acquisition Related and Other Expenses This section reports on Oracle's acquisition-related and other expenses, noting their consistent level year-over-year Acquisition Related Expenses (millions) | Acquisition Related Expenses (millions) | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | YoY Change (Actual %) | | :------------------------------------ | :-------------------------- | :-------------------------- | :-------------------- | | Total acquisition related and other expenses | $13 | $13 | 0% | Restructuring Expenses This section details the significant increase in Oracle's restructuring expenses, primarily driven by the Fiscal 2026 Restructuring Plan aimed at improving cost structure Restructuring Expenses (millions) | Restructuring Expenses (millions) | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | YoY Change (Actual %) | YoY Change (Constant %) | | :------------------------------ | :-------------------------- | :-------------------------- | :-------------------- | :---------------------- | | Restructuring expenses | $402 | $73 | 448% | 439% | - Restructuring expenses in Q1 FY26 primarily related to the 2026 Restructuring Plan, aimed at improving cost structure and operations, particularly for cloud-based offerings[147][148] Interest Expense This section analyzes the increase in Oracle's interest expense, primarily due to higher average borrowings from recently issued senior notes Interest Expense (millions) | Interest Expense (millions) | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | YoY Change (Actual %) | YoY Change (Constant %) | | :------------------------ | :-------------------------- | :-------------------------- | :-------------------- | :---------------------- | | Interest expense | $923 | $842 | 10% | 10% | - Increase in interest expense was primarily due to higher average borrowings from $14.0 billion senior notes issued in fiscal 2025, partially offset by scheduled debt repayments[149] Non-Operating Income, net This section reviews the increase in Oracle's net non-operating income, driven by gains from deferred compensation plans and reduced foreign currency losses Non-Operating Income, net (millions) | Non-Operating Income, net (millions) | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | YoY Change (Actual %) | YoY Change (Constant %) | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | :---------------------- | | Total non-operating income, net | $73 | $20 | 250% | 286% | - The increase was primarily due to a $43 million increase in gains from the deferred compensation plan's investment portfolio, a $19 million decrease in foreign currency losses, and a $17 million decrease in losses from marketable and non-marketable investments, partially offset by a $30 million decrease in interest income[151] Provision for Income Taxes This section discusses the significant increase in Oracle's provision for income taxes, influenced by new tax legislation and stock-based compensation benefits Income Tax Metric | Income Tax Metric | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | YoY Change (Actual %) | YoY Change (Constant %) | | :---------------- | :-------------------------- | :-------------------------- | :-------------------- | :---------------------- | | Provision for income taxes | $500 | $240 | 108% | 101% | | Effective tax rate | 14.6% | 7.6% | 7% | 7% | - The increase was primarily related to an unfavorable impact from the U.S. One, Big, Beautiful Bill Act ($958 million net tax expense) and the absence of $99 million in unrecognized tax benefits, partially offset by an $853 million increase in tax benefits related to stock-based compensation[153] Liquidity and Capital Resources This section analyzes Oracle's liquidity and capital resources, including changes in working capital, cash flows, free cash flow, and remaining performance obligations Liquidity Metric | Liquidity Metric | Aug 31, 2025 (millions) | May 31, 2025 (millions) | Change (millions) | | :--------------- | :---------------------- | :---------------------- | :---------------- | | Working capital | $(15,240) | $(8,064) | $(7,176) | | Cash, cash equivalents and marketable securities | $11,005 | $11,203 | $(198) | - Working capital decreased primarily due to $8.5 billion in capital expenditures, $3.1 billion of long-term borrowings reclassified to current liabilities, and $1.4 billion in dividend payments[155] Cash Flow Metric | Cash Flow Metric | 3 Months Ended Aug 31, 2025 (millions) | 3 Months Ended Aug 31, 2024 (millions) | YoY Change (%) | | :------------------------------- | :------------------------------------- | :------------------------------------- | :------------- | | Net cash provided by operating activities | $8,140 | $7,427 | 10% | | Net cash used for investing activities | $(8,718) | $(2,765) | 215% | | Net cash provided by (used for) financing activities | $210 | $(4,585) | N/A | - Net cash used for investing activities increased by $6.0 billion, primarily due to increased capital expenditures[160] Free Cash Flow (millions) | Free Cash Flow (millions) | Trailing Four-Quarters Ended Aug 31, 2025 | Trailing Four-Quarters Ended Aug 31, 2024 | Change (millions) | | :------------------------ | :---------------------------------------- | :---------------------------------------- | :---------------- | | Net cash provided by operating activities | $21,534 | $19,126 | $2,408 | | Capital expenditures | $(27,414) | $(7,855) | $(19,559) | | Free cash flow | $(5,880) | $11,271 | $(17,151) | - Remaining performance obligations increased to $455.3 billion as of August 31, 2025, from $99.1 billion in the prior year, primarily due to significant cloud contracts[164] - The maximum potential dilution from all outstanding stock-based awards was 4.0% as of August 31, 2025[167] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section states that there were no significant changes to Oracle's quantitative and qualitative disclosures about market risk during the first quarter of fiscal 2026, referring readers to the Annual Report on Form 10-K for a more complete discussion - No significant changes to quantitative and qualitative disclosures about market risk occurred during Q1 FY26[170] Item 4. Controls and Procedures Oracle's management concluded that its disclosure controls and procedures were effective as of August 31, 2025, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely. No material changes in internal control over financial reporting were identified during the quarter - Disclosure controls and procedures were effective as of August 31, 2025, providing reasonable assurance for timely and accurate financial reporting[171] - No material changes in internal control over financial reporting were identified during the last fiscal quarter[172] PART II. OTHER INFORMATION This section provides additional information on legal proceedings, risk factors, equity security sales, other disclosures, and a list of exhibits Item 1. Legal Proceedings This section incorporates by reference the detailed information regarding legal proceedings and claims, including the Netherlands Privacy Class Action, from Note 7 and Note 10 of the Condensed Consolidated Financial Statements - Refers to Note 10 of the financial statements for details on legal proceedings, including the Netherlands Privacy Class Action[175] Item 1A. Risk Factors This section directs readers to the comprehensive discussion of risk factors in Oracle's Annual Report on Form 10-K for the fiscal year ended May 31, 2025, emphasizing that those risks, along with potential new or currently insignificant risks, could materially affect the company's business and financial results - Refers to Part I, Item 1A Risk Factors in the Annual Report on Form 10-K for a comprehensive discussion of market risks[176] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds As of August 31, 2025, Oracle had approximately $6.3 billion remaining under its stock repurchase program. During the three months ended August 31, 2025, the company repurchased 0.4 million shares for $93 million. The pace of future repurchases is flexible and dependent on various financial and market conditions - Approximately $6.3 billion remained available for stock repurchases as of August 31, 2025[177] Stock Repurchase Activity (millions, except per share amounts) | Period | Shares Purchased (millions) | Average Price Paid per Share | | :------------------------ | :-------------------------- | :--------------------------- | | June 1, 2025—June 30, 2025 | 0.2 | $193.51 | | July 1, 2025—July 31, 2025 | 0.2 | $236.48 | | August 1, 2025—August 31, 2025 | — | $— | | Total | 0.4 | $212.30 | Item 5. Other Information This section discloses Rule 10b5-1 trading plans. Stuart Levey, Oracle's Executive Vice President and Chief Legal Officer, adopted a new trading plan on July 10, 2025, to sell up to 13,615 vested shares and approximately 11,805 gross shares (net of taxes) of restricted stock units, with the plan scheduled to terminate by April 10, 2026 - Stuart Levey, EVP, Chief Legal Officer, adopted a Rule 10b5-1 trading plan on July 10, 2025, to sell up to 13,615 vested shares and approximately 11,805 gross shares (net of taxes) of restricted stock units by April 10, 2026[180] Item 6. Exhibits This section lists all exhibits filed as part of the Form 10-Q, including corporate governance documents, stock option agreements, certifications from the Principal Executive and Financial Officer, and Interactive Data Files (Inline XBRL) for the financial statements - Lists exhibits filed with the Form 10-Q, including corporate governance documents, stock option agreements, certifications, and Interactive Data Files (Inline XBRL)[184] SIGNATURES This section provides the official signatures of Oracle's principal executive and accounting officers, certifying the accuracy of the report - The report was signed by Safra A. Catz (CEO and Principal Executive and Financial Officer) and Maria Smith (EVP, Chief Accounting Officer and Principal Accounting Officer) on September 10, 2025[188]