10-QPeriod: Q1 FY2026

ORACLE CORP Quarterly Report for Q1 Ended Aug 31, 2025

Filed September 10, 2025For Securities:ORCLORCL-PD

Summary

Oracle Corporation reported a solid performance for the quarter ended August 31, 2025, with total revenues growing 12% year-over-year to $14.9 billion. 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 billion, 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 billion, 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 billion remaining on its share repurchase authorization. Oracle's robust deferred revenue balance of $13.4 billion further indicates strong future revenue potential.

Financial Highlights

54 data points
Beta

Revenue

$14.93B

Net Income

$2.93B

19.6% Net Margin

EPS (Diluted)

$1.01

Total Assets

$180.45B

Cash & Equivalents

$10.45B

Free Cash Flow

-$362.00M

Financial Statements
Beta
Revenue$14.93B
R&D Expenses$2.49B
Operating Expenses$10.65B
Operating Income$4.28B
Interest Expense$923.00M
Net Income$2.93B
EPS (Basic)$1.04
EPS (Diluted)$1.01
Shares Outstanding (Basic)2.83B
Shares Outstanding (Diluted)2.91B

Key Highlights

  • 1Total revenues increased by 12% to $14.9 billion for the three months ended August 31, 2025, compared to the prior year period.
  • 2Cloud and Software revenue, the largest segment, grew 13% to $12.9 billion, now comprising 86% of total revenue.
  • 3Operating income increased by 7% to $4.3 billion, indicating a healthy operational performance.
  • 4Net cash provided by operating activities surged by 10% to $8.1 billion, demonstrating strong cash generation from core operations.
  • 5The company initiated a significant restructuring plan (2026 Restructuring Plan) with estimated costs up to $1.6 billion, impacting current quarter expenses.
  • 6Deferred revenues increased to $13.4 billion as of August 31, 2025, highlighting substantial future revenue potential.
  • 7Capital expenditures significantly increased to $8.5 billion for the quarter, largely to support cloud business growth.

Frequently Asked Questions

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.

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.

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.

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.