01—Abstract
Summary
Summary of the 10-K filed June 22, 2026. Cited figures are marked; the original filing is the authoritative source.
Oracle Corporation's (ORCL) fiscal year 2026 filing indicates a robust financial performance driven by significant growth in its cloud and software business, which now constitutes 87%a of total revenues.
The company has seen a substantial increase in cloud revenues, up 19% year-over-year, with cloud infrastructure showing particularly strong growth at 77%. This expansion is supported by heavy investment in data center capacity, with capital expenditures more than doubling to $55.7 billionb, reflecting a strategic pivot towards cloud-based offerings. Despite increased operating expenses, largely attributed to cloud infrastructure investments and restructuring charges, Oracle maintained its operating margin at a healthy 31%.
The company's strategic focus on integrating AI technologies across its product suite positions it for continued innovation and market competitiveness. Financially, Oracle has strengthened its balance sheet through substantial debt issuances totaling $43 billionc in senior notes and $5 billion in mandatory convertible preferred stock. This has been managed alongside significant cash flow from operations, which increased by 54% to $32 billion.
However, free cash flow turned negative at $(23.7) billion due to the heavy capital expenditures. The company's market performance, as indicated by the stock performance graph, shows a significant increase in total stockholder return over the past five years, outperforming the S&P 500 and the Dow Jones U.S. Technology Total Return Index. Investors should note the ongoing risks related to cybersecurity, global economic conditions, and the execution of its cloud strategy, alongside the potential dilution from its ATM program and mandatory convertible preferred stock.
02—Key points
Key Highlights
- Cloud and Software revenue grew 19% year-over-year to $58.5 billion, now representing 87% of total revenues, driven by strong cloud application and infrastructure growth.
- Capital expenditures significantly increased by 162% to $55.7 billion, primarily to support data center expansion for cloud offerings.
- Total revenues increased by 17% to $67.4 billion, with operating income up 17% to $20.6 billion.
- The company issued $43 billion in senior notes and $5 billion in mandatory convertible preferred stock during fiscal year 2026, strengthening its financial position.
- Free cash flow turned negative at $(23.7) billion due to increased capital expenditures, compared to $(394) million in the prior year.
- Oracle's stock performance shows a significant upward trend over the last five years, outperforming major market indices.
- Restructuring and other expenses increased substantially to $1.8 billion, primarily related to the fiscal year 2026 Oracle Restructuring Plan.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2026filed June 22, 2026Financial Statements
FY2026 against FY2025
| Line item | FY2026FY2025 | Change |
|---|---|---|
| Revenue | $67.36B$57.40B | +17.3% |
| R&D Expenses | $10.27B$9.86B | +4.2% |
| Operating Expenses | $46.75B$39.72B | +17.7% |
| Operating Income | $20.61B$17.68B | +16.6% |
| Interest Expense | $4.60B$3.58B | +28.5% |
| Net Income | $17.09B$12.44B | +37.3% |
| EPS (Basic) | $5.94$4.46 | +33.2% |
| EPS (Diluted) | $5.83$4.34 | +34.3% |
| Shares Outstanding (Basic) | 2.86B2.79B | +2.5% |
| Shares Outstanding (Diluted) | 2.91B2.87B | +1.7% |
05—Questions
Frequently Asked Questions
What is the primary driver of Oracle's revenue growth?
Oracle's primary revenue driver is its cloud and software business, which accounted for 87% of total revenues in fiscal year 2026. Growth in cloud revenues, particularly in cloud applications and cloud infrastructure, is fueling this expansion. The company has seen a significant increase in customer adoption of its cloud offerings and renewals of related cloud contracts.
How is Oracle funding its significant investments in data center capacity?
Oracle is funding its substantial investments in data center capacity through a combination of operating cash flows and debt financing. In fiscal year 2026, the company issued $43 billion in senior notes and $5 billion in mandatory convertible preferred stock. These financing activities, coupled with cash generated from operations, support its heavy capital expenditures, which more than doubled to $55.7 billion.
What are the key risks highlighted in the filing for investors to consider?
Key risks highlighted for investors include the company's ability to successfully execute its Oracle Cloud strategy, potential impact from cybersecurity incidents and data breaches, intense competition in the IT industry, and the risks associated with significant investments in research and development which may not yield immediate revenue. Additionally, risks related to economic conditions, currency fluctuations, and the potential dilution from equity issuances like the ATM program and mandatory convertible preferred stock are also important considerations.
How did Oracle's cloud revenue growth compare between applications and infrastructure?
In fiscal year 2026, Oracle's cloud revenues grew by 19% year-over-year. Within this growth, cloud infrastructure contributed significantly, growing by 77%, while cloud applications grew by 11%. Cloud infrastructure now represents a larger portion of cloud revenue, indicating a strong demand for Oracle's OCI services.
06—Continue