01—Abstract
Summary
Summary of the 10-Q filed September 10, 2025. Cited figures are marked; the original filing is the authoritative source.
Oracle Corporation reported a solid performance for the quarter ended August 31, 2025, with total revenues growing 12% year-over-year to $14.9 billiona.
This growth was primarily driven by a strong 13% increase in Cloud and Software revenues, which now represent 86% of total revenue. The company also saw a notable 7% increase in Services revenue, while Hardware revenue experienced a more modest 2% growth. Operating income rose by 7% to $4.3 billionb, reflecting disciplined expense management despite increased investments in cloud infrastructure and R&D.
Key financial strengths include a substantial increase in net cash provided by operating activities, reaching $8.1 billionc, underscoring the company's operational efficiency. However, significant capital expenditures, particularly in cloud infrastructure, led to a substantial increase in net cash used for investing activities.
The company also continues to manage its debt obligations and return capital to shareholders through dividends and share repurchases, with $6.3 billiond remaining on its share repurchase authorization. Oracle's robust deferred revenue balance of $13.4 billion further indicates strong future revenue potential.
02—Key points
Key Highlights
- Total revenues increased by 12% to $14.9 billion for the three months ended August 31, 2025, compared to the prior year period.
- Cloud and Software revenue, the largest segment, grew 13% to $12.9 billion, now comprising 86% of total revenue.
- Operating income increased by 7% to $4.3 billion, indicating a healthy operational performance.
- Net cash provided by operating activities surged by 10% to $8.1 billion, demonstrating strong cash generation from core operations.
- The company initiated a significant restructuring plan (2026 Restructuring Plan) with estimated costs up to $1.6 billion, impacting current quarter expenses.
- Deferred revenues increased to $13.4 billion as of August 31, 2025, highlighting substantial future revenue potential.
- Capital expenditures significantly increased to $8.5 billion for the quarter, largely to support cloud business growth.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed September 10, 2025Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $14.93B$13.31B | +12.2% |
| R&D Expenses | $2.49B$2.31B | +8.0% |
| Operating Expenses | $10.65B$9.32B | +14.3% |
| Operating Income | $4.28B$3.99B | +7.2% |
| Interest Expense | $923.00M$842.00M | +9.6% |
| Net Income | $2.93B$2.93B | −0.1% |
| EPS (Basic) | $1.04$1.06 | −1.9% |
| EPS (Diluted) | $1.01$1.03 | −1.9% |
| Shares Outstanding (Basic) | 2.83B2.76B | +2.4% |
| Shares Outstanding (Diluted) | 2.91B2.85B | +2.0% |
05—Questions
Frequently Asked Questions
What is driving Oracle's revenue growth?
Oracle's revenue growth is primarily driven by its Cloud and Software segment, which saw a 13% increase year-over-year. This growth is attributed to higher cloud revenues from new subscriptions and renewals for both applications and infrastructure technologies. Services revenue also contributed positively with a 7% increase.
How is Oracle managing its expenses and investments?
Oracle's total operating expenses increased by 14% primarily due to higher cloud and software expenses, driven by infrastructure investments and employee-related costs to support cloud revenue growth. Research and Development expenses also increased to support innovation. The company also incurred $402 million in restructuring expenses related to its new 2026 Restructuring Plan, aimed at improving operational efficiencies.
What is the company's cash flow situation and capital allocation strategy?
Oracle generated strong operating cash flow, with net cash provided by operating activities increasing 10% to $8.1 billion. However, significant investments in capital expenditures ($8.5 billion) for cloud growth led to a substantial increase in net cash used for investing activities. The company continues to return capital to shareholders through dividends ($1.4 billion paid) and has approximately $6.3 billion available for share repurchases.
What is the significance of the increased deferred revenue?
The increase in deferred revenue to $13.4 billion is a positive indicator of future revenue. It represents payments received from customers for services and products that have not yet been delivered or recognized as revenue, providing strong visibility into future earnings.
06—Continue