{"url_path":"/sec/orcl/10-k/2026/item-15","section_key":"item-15","section_title":"Item 15 Exhibits and Financial Statement Schedules","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-06-22","source_url":"https://www.sec.gov/Archives/edgar/data/1341439/0001193125-26-277521-index.html","accession_number":"0001193125-26-277521","cik":"0001341439","ticker":"ORCL","issuer_name":"ORACLE CORP","edgar_url":"https://www.sec.gov/Archives/edgar/data/1341439/0001193125-26-277521-index.html","primary_entity_key":"0001341439","primary_entity_name":"ORACLE CORP"},"word_count":23454,"has_tables":true,"body_markdown":"Item 15. Exhibits and Financial Statement Schedules\n\n(a)\n1. Financial Statements\n\nThe following financial statements are filed as a part of this report:\n\n \n\nPage\n\n \n\n \n\n \n\n[Reports of Independent Registered Public Accounting Firm](#report_independent_registered_public_acc) (PCAOB ID: 42)\n\n \n\n61\n\nConsolidated Financial Statements:\n\n \n\n \n\n[Balance Sheets as of May 31, 2026 and 2025](#consolidated_balance_sheets)\n\n \n\n64\n\n[Statements of Operations for the years ended May 31, 2026, 2025 and 2024](#consolidated_statements_operations)\n\n \n\n65\n\n[Statements of Comprehensive Income for the years ended May 31, 2026, 2025 and 2024](#consolidated_statements_comprehensive_in)\n\n \n\n66\n\n[Statements of Stockholders’ Equity for the years ended May 31, 2026, 2025 and 2024](#consolidated_statements_equity)\n\n \n\n67\n\n[Statements of Cash Flows for the years ended May 31, 2026, 2025 and 2024](#consolidated_statements_cash_flows)\n\n \n\n68\n\n[Notes to Consolidated Financial Statements](#n1_organization_significant_accounting_p)\n\n \n\n69\n\n \n\n2. Financial Statement Schedules\n\n \n\nAll schedules are omitted because the information required to be set forth therein is not applicable or is shown in the financial statements or notes herein or not present in amounts sufficient to require submission of the schedule.\n\n(b) Exhibits\n\nThe information required by this Item is set forth in the Index of Exhibits that is after Item 16 of this Annual Report on Form 10-K.\n\n \n\n60\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nReport of Independent Registered Public Accounting Firm\n\nTo the Stockholders and the Board of Directors of Oracle Corporation\n\nOpinion on the Financial Statements\n\nWe have audited the accompanying consolidated balance sheets of Oracle Corporation (the Company) as of May 31, 2026 and 2025, the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended May 31, 2026, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at May 31, 2026 and 2025, and the results of its operations and its cash flows for each of the three years in the period ended May 31, 2026, in conformity with U.S. generally accepted accounting principles.\n\nWe also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of May 31, 2026, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated June 22, 2026 expressed an unqualified opinion thereon.\n\nBasis for Opinion\n\nThese financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\nWe conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.\n\nCritical Audit Matter\n\nThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.\n\n \n\n \n\n \n\nUncertain Tax Positions\n\nDescription of the matter\n\n \n\nAs discussed in Note 12 of the consolidated financial statements, the Company recognizes uncertain tax positions and measures unrecognized tax benefits related to various domestic and foreign matters. The Company uses judgment in the accounting for uncertain tax positions related to certain intercompany transfer prices and calculations, including the interpretation and application of tax laws and legal rulings in various jurisdictions.\n\nAuditing management’s evaluation of whether these uncertain tax positions are more likely than not to be sustained and the measurement of the benefit of the tax positions was complex, involved judgment, and was based on interpretations and application of tax laws and legal rulings.\n\n61\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nHow we addressed the matter in our audit\n\n \n\nWe obtained an understanding, evaluated the design, and tested the operating effectiveness of the controls over management’s process to assess the technical merits of the Company’s tax positions related to certain intercompany transfer prices and calculations, including ongoing monitoring activities, and management’s process to measure the benefit of those tax positions.\n\nTo test management’s assessment of these uncertain tax positions, we performed audit procedures that included, among others, evaluating management’s assumptions and analysis which detailed the basis and technical merits of the uncertain tax positions. We involved our tax subject matter professionals in assessing these positions and used our knowledge of relevant tax laws and experience with related taxing authorities.\n\n \n\n \n\n \n\n/s/ Ernst & Young LLP\n\nWe have served as the Company’s auditor since 2002.\n\nSan Jose, California\n\nJune 22, 2026\n\n \n\n62\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nReport of Independent Registered Public Accounting Firm\n\nTo the Stockholders and the Board of Directors of Oracle Corporation\n\nOpinion on Internal Control Over Financial Reporting\n\nWe have audited Oracle Corporation’s internal control over financial reporting as of May 31, 2026, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Oracle Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of May 31, 2026, based on the COSO criteria.\n\nWe also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of May 31, 2026 and 2025, the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended May 31, 2026, and the related notes and our report dated June 22, 2026 expressed an unqualified opinion thereon.\n\nBasis for Opinion\n\nThe Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\nWe conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.\n\nOur audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.\n\nDefinition and Limitations of Internal Control Over Financial Reporting\n\nA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.\n\nBecause of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.\n\n/s/ Ernst & Young LLP\n\nSan Jose, California\n\nJune 22, 2026\n\n63\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nORACLE CORPORATION\n\nCONSOLIDATED BALANCE SHEETS\n\nAs of May 31, 2026 and 2025\n\n \n\n \n\nMay 31,\n\n \n\n(in millions, except per share data)\n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\nASSETS\n\n \n\n \n\n \n\n \n\n \n\n \n\nCurrent assets:\n\n \n\n \n\n \n\n \n\n \n\n \n\nCash and cash equivalents\n\n \n\n$\n\n31,289\n\n \n\n \n\n$\n\n10,786\n\n \n\nMarketable securities\n\n \n\n \n\n605\n\n \n\n \n\n \n\n417\n\n \n\nTrade receivables, net of allowances for credit losses of $542 and $557 as of May 31, 2026 and May 31, 2025, respectively\n\n \n\n \n\n10,385\n\n \n\n \n\n \n\n8,558\n\n \n\nPrepaid expenses and other current assets\n\n \n\n \n\n4,288\n\n \n\n \n\n \n\n4,818\n\n \n\nTotal current assets\n\n \n\n \n\n46,567\n\n \n\n \n\n \n\n24,579\n\n \n\nNon-current assets:\n\n \n\n \n\n \n\n \n\n \n\n \n\nProperty, plant and equipment, net\n\n \n\n \n\n99,957\n\n \n\n \n\n \n\n43,522\n\n \n\nOperating lease right-of-use assets\n\n \n\n \n\n29,690\n\n \n\n \n\n \n\n13,145\n\n \n\nGoodwill\n\n \n\n \n\n62,261\n\n \n\n \n\n \n\n62,207\n\n \n\nDeferred tax assets\n\n \n\n \n\n11,541\n\n \n\n \n\n \n\n11,877\n\n \n\nOther non-current assets\n\n \n\n \n\n11,743\n\n \n\n \n\n \n\n13,031\n\n \n\nTotal non-current assets\n\n \n\n \n\n215,192\n\n \n\n \n\n \n\n143,782\n\n \n\nTotal assets\n\n \n\n$\n\n261,759\n\n \n\n \n\n$\n\n168,361\n\n \n\nLIABILITIES AND STOCKHOLDERS’ EQUITY\n\n \n\n \n\n \n\n \n\n \n\n \n\nCurrent liabilities:\n\n \n\n \n\n \n\n \n\n \n\n \n\nNotes payable and other borrowings, current\n\n \n\n$\n\n7,199\n\n \n\n \n\n$\n\n7,271\n\n \n\nAccounts payable\n\n \n\n \n\n10,977\n\n \n\n \n\n \n\n5,113\n\n \n\nAccrued compensation and related benefits\n\n \n\n \n\n2,225\n\n \n\n \n\n \n\n2,243\n\n \n\nDeferred revenues\n\n \n\n \n\n9,916\n\n \n\n \n\n \n\n9,387\n\n \n\nOther current liabilities\n\n \n\n \n\n11,447\n\n \n\n \n\n \n\n8,629\n\n \n\nTotal current liabilities\n\n \n\n \n\n41,764\n\n \n\n \n\n \n\n32,643\n\n \n\nNon-current liabilities:\n\n \n\n \n\n \n\n \n\n \n\n \n\nNotes payable and other borrowings, non-current\n\n \n\n \n\n122,342\n\n \n\n \n\n \n\n85,297\n\n \n\nIncome taxes payable\n\n \n\n \n\n11,771\n\n \n\n \n\n \n\n10,269\n\n \n\nOperating lease liabilities\n\n \n\n \n\n26,648\n\n \n\n \n\n \n\n11,536\n\n \n\nOther non-current liabilities\n\n \n\n \n\n16,178\n\n \n\n \n\n \n\n7,647\n\n \n\nTotal non-current liabilities\n\n \n\n \n\n176,939\n\n \n\n \n\n \n\n114,749\n\n \n\nCommitments and contingencies\n\n \n\n \n\n \n\n \n\n \n\n \n\nOracle Corporation stockholders’ equity:\n\n \n\n \n\n \n\n \n\n \n\n \n\nPreferred stock, $0.01 par value and additional paid in capital—authorized: 1.0 shares; outstanding: 0.05 shares as of May 31, 2026 of 6.50% Series D Mandatory Convertible Preferred Stock (none as of May 31, 2025)\n\n \n\n \n\n4,954\n\n \n\n \n\n \n\n—\n\n \n\nCommon stock, $0.01 par value and additional paid in capital—authorized: 11,000 shares; outstanding: 2,880 shares and 2,807 shares as of May 31, 2026 and 2025, respectively\n\n \n\n \n\n43,243\n\n \n\n \n\n \n\n37,107\n\n \n\nAccumulated deficit\n\n \n\n \n\n(4,309\n\n)\n\n \n\n \n\n(15,481\n\n)\n\nAccumulated other comprehensive loss\n\n \n\n \n\n(1,380\n\n)\n\n \n\n \n\n(1,175\n\n)\n\nTotal Oracle Corporation stockholders’ equity\n\n \n\n \n\n42,508\n\n \n\n \n\n \n\n20,451\n\n \n\nNoncontrolling interests\n\n \n\n \n\n548\n\n \n\n \n\n \n\n518\n\n \n\nTotal stockholders’ equity\n\n \n\n \n\n43,056\n\n \n\n \n\n \n\n20,969\n\n \n\nTotal liabilities and stockholders’ equity\n\n \n\n$\n\n261,759\n\n \n\n \n\n$\n\n168,361\n\n \n\n \n\nSee notes to consolidated financial statements.\n\n64\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nORACLE CORPORATION\n\nCONSOLIDATED STATEMENTS OF OPERATIONS\n\nFor the Years Ended May 31, 2026, 2025 and 2024\n\n \n\n \n\n \n\nYear Ended May 31,\n\n \n\n(in millions, except per share data)\n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nRevenues:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCloud\n\n \n\n$\n\n33,989\n\n \n\n \n\n$\n\n24,506\n\n \n\n \n\n$\n\n19,774\n\n \n\nSoftware\n\n \n\n \n\n24,541\n\n \n\n \n\n \n\n24,724\n\n \n\n \n\n \n\n24,690\n\n \n\nHardware\n\n \n\n \n\n3,084\n\n \n\n \n\n \n\n2,936\n\n \n\n \n\n \n\n3,066\n\n \n\nServices\n\n \n\n \n\n5,743\n\n \n\n \n\n \n\n5,233\n\n \n\n \n\n \n\n5,431\n\n \n\nTotal revenues\n\n \n\n \n\n67,357\n\n \n\n \n\n \n\n57,399\n\n \n\n \n\n \n\n52,961\n\n \n\nOperating expenses:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCloud and software(1)\n\n \n\n \n\n17,597\n\n \n\n \n\n \n\n11,569\n\n \n\n \n\n \n\n9,427\n\n \n\nHardware(1)\n\n \n\n \n\n868\n\n \n\n \n\n \n\n782\n\n \n\n \n\n \n\n891\n\n \n\nServices(1)\n\n \n\n \n\n4,556\n\n \n\n \n\n \n\n4,576\n\n \n\n \n\n \n\n4,825\n\n \n\nSales and marketing(1)\n\n \n\n \n\n8,331\n\n \n\n \n\n \n\n8,651\n\n \n\n \n\n \n\n8,274\n\n \n\nResearch and development\n\n \n\n \n\n10,272\n\n \n\n \n\n \n\n9,860\n\n \n\n \n\n \n\n8,915\n\n \n\nGeneral and administrative\n\n \n\n \n\n1,618\n\n \n\n \n\n \n\n1,602\n\n \n\n \n\n \n\n1,548\n\n \n\nAmortization of intangible assets\n\n \n\n \n\n1,671\n\n \n\n \n\n \n\n2,307\n\n \n\n \n\n \n\n3,010\n\n \n\nRestructuring and other\n\n \n\n \n\n1,838\n\n \n\n \n\n \n\n374\n\n \n\n \n\n \n\n718\n\n \n\nTotal operating expenses\n\n \n\n \n\n46,751\n\n \n\n \n\n \n\n39,721\n\n \n\n \n\n \n\n37,608\n\n \n\nOperating income\n\n \n\n \n\n20,606\n\n \n\n \n\n \n\n17,678\n\n \n\n \n\n \n\n15,353\n\n \n\nInterest expense\n\n \n\n \n\n(4,599\n\n)\n\n \n\n \n\n(3,578\n\n)\n\n \n\n \n\n(3,514\n\n)\n\nNon-operating income (expenses), net\n\n \n\n \n\n3,547\n\n \n\n \n\n \n\n60\n\n \n\n \n\n \n\n(98\n\n)\n\nIncome before income taxes\n\n \n\n \n\n19,554\n\n \n\n \n\n \n\n14,160\n\n \n\n \n\n \n\n11,741\n\n \n\nProvision for income taxes\n\n \n\n \n\n2,467\n\n \n\n \n\n \n\n1,717\n\n \n\n \n\n \n\n1,274\n\n \n\nNet income\n\n \n\n$\n\n17,087\n\n \n\n \n\n$\n\n12,443\n\n \n\n \n\n$\n\n10,467\n\n \n\nPreferred stock dividends\n\n \n\n \n\n103\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nNet income available to common shareholders\n\n \n\n$\n\n16,984\n\n \n\n \n\n$\n\n12,443\n\n \n\n \n\n$\n\n10,467\n\n \n\nEarnings per share attributable to common shareholders:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nBasic\n\n \n\n$\n\n5.94\n\n \n\n \n\n$\n\n4.46\n\n \n\n \n\n$\n\n3.82\n\n \n\nDiluted\n\n \n\n$\n\n5.83\n\n \n\n \n\n$\n\n4.34\n\n \n\n \n\n$\n\n3.71\n\n \n\nWeighted average common shares outstanding:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nBasic\n\n \n\n \n\n2,860\n\n \n\n \n\n \n\n2,789\n\n \n\n \n\n \n\n2,744\n\n \n\nDiluted\n\n \n\n \n\n2,914\n\n \n\n \n\n \n\n2,866\n\n \n\n \n\n \n\n2,823\n\n \n\n \n\n(1)\nExclusive of amortization of intangible assets, which is shown separately.\n\n \n\n \n\nSee notes to consolidated financial statements.\n\n65\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nORACLE CORPORATION\n\nCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME\n\nFor the Years Ended May 31, 2026, 2025 and 2024\n\n \n\n \n\nYear Ended May 31,\n\n \n\n(in millions)\n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nNet income\n\n \n\n$\n\n17,087\n\n \n\n \n\n$\n\n12,443\n\n \n\n \n\n$\n\n10,467\n\n \n\nOther comprehensive (loss) income, net of tax:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet foreign currency translation (losses) gains\n\n \n\n \n\n(232\n\n)\n\n \n\n \n\n369\n\n \n\n \n\n \n\n(17\n\n)\n\nNet unrealized gains on defined benefit plans\n\n \n\n \n\n45\n\n \n\n \n\n \n\n13\n\n \n\n \n\n \n\n31\n\n \n\nNet unrealized (losses) gains on cash flow hedges\n\n \n\n \n\n(18\n\n)\n\n \n\n \n\n(125\n\n)\n\n \n\n \n\n77\n\n \n\nOther, net\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(1\n\n)\n\nTotal other comprehensive (loss) income, net\n\n \n\n \n\n(205\n\n)\n\n \n\n \n\n257\n\n \n\n \n\n \n\n90\n\n \n\nComprehensive income\n\n \n\n$\n\n16,882\n\n \n\n \n\n$\n\n12,700\n\n \n\n \n\n$\n\n10,557\n\n \n\n \n\n \n\nSee notes to consolidated financial statements.\n\n \n\n \n\n66\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nORACLE CORPORATION\n\nCONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY\n\nFor the Years Ended May 31, 2026, 2025 and 2024\n\n \n\n \n\n \n\nPreferred and Common Stock and\nAdditional Paid in Capital\n\n \n\n \n\n \n\n \n\n \n\nAccumulated\nOther\n\n \n\n \n\n \n\n \n\n \n\nTotal\n\n \n\n(in millions, except per share data)\n\n \n\n \n\nPreferred Stock\nShares\n\n \n\n \n\nCommon Stock\nShares\n\n \n\n \n\nAmount\n\n \n\n \n\nAccumulated Deficit\n\n \n\n \n\nComprehensive\nLoss\n\n \n\n \n\nNoncontrolling\nInterests\n\n \n\n \n\nStockholders’\nEquity\n\n \n\nBalances as of May 31, 2023\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n2,713\n\n \n\n \n\n$\n\n30,215\n\n \n\n \n\n$\n\n(27,620\n\n)\n\n \n\n$\n\n(1,522\n\n)\n\n \n\n$\n\n483\n\n \n\n \n\n$\n\n1,556\n\n \n\nCommon stock issued under stock-based compensation plans\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n68\n\n \n\n \n\n \n\n545\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n545\n\n \n\nCommon stock issued under stock purchase plans\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n2\n\n \n\n \n\n \n\n197\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n197\n\n \n\nStock-based compensation\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n3,974\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n3,974\n\n \n\nRepurchases of common stock\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(11\n\n)\n\n \n\n \n\n(117\n\n)\n\n \n\n \n\n(1,083\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(1,200\n\n)\n\nShares repurchased for tax withholdings upon vesting of restricted stock-based awards\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(17\n\n)\n\n \n\n \n\n(2,040\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(2,040\n\n)\n\nCash dividends declared ($1.60 per share)\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(4,391\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(4,391\n\n)\n\nOther, net\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(10\n\n)\n\n \n\n \n\n(1\n\n)\n\n \n\n \n\n90\n\n \n\n \n\n \n\n(134\n\n)\n\n \n\n \n\n(55\n\n)\n\nNet income\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n10,467\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n186\n\n \n\n \n\n \n\n10,653\n\n \n\nBalances as of May 31, 2024\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n2,755\n\n \n\n \n\n \n\n32,764\n\n \n\n \n\n \n\n(22,628\n\n)\n\n \n\n \n\n(1,432\n\n)\n\n \n\n \n\n535\n\n \n\n \n\n \n\n9,239\n\n \n\nCommon stock issued under stock-based compensation plans\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n62\n\n \n\n \n\n \n\n447\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n447\n\n \n\nCommon stock issued under stock purchase plans\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n1\n\n \n\n \n\n \n\n206\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n206\n\n \n\nStock-based compensation\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n4,674\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n4,674\n\n \n\nRepurchases of common stock\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(4\n\n)\n\n \n\n \n\n(47\n\n)\n\n \n\n \n\n(553\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(600\n\n)\n\nShares repurchased for tax withholdings upon vesting of restricted stock-based awards\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(7\n\n)\n\n \n\n \n\n(900\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(900\n\n)\n\nCash dividends declared ($1.70 per share)\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(4,743\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(4,743\n\n)\n\nOther, net\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(37\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n257\n\n \n\n \n\n \n\n(201\n\n)\n\n \n\n \n\n19\n\n \n\nNet income\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n12,443\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n184\n\n \n\n \n\n \n\n12,627\n\n \n\nBalances as of May 31, 2025\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n2,807\n\n \n\n \n\n \n\n37,107\n\n \n\n \n\n \n\n(15,481\n\n)\n\n \n\n \n\n(1,175\n\n)\n\n \n\n \n\n518\n\n \n\n \n\n \n\n20,969\n\n \n\nMandatory convertible preferred stock issued\n\n \n\n \n\n— (1)\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n4,954\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n4,954\n\n \n\nCommon stock issued under stock-based compensation plans\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n72\n\n \n\n \n\n \n\n1,241\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n1,241\n\n \n\nCommon stock issued under stock purchase plans\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n1\n\n \n\n \n\n \n\n208\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n208\n\n \n\nStock-based compensation\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n4,811\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n4,811\n\n \n\nRepurchases of common stock\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(6\n\n)\n\n \n\n \n\n(87\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(93\n\n)\n\nShares repurchased for tax withholdings upon vesting of restricted stock-based awards\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(111\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(111\n\n)\n\nPreferred stock dividends ($1,263.89 per share)\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(103\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(103\n\n)\n\nCommon stock dividends ($2.00 per share)\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(5,725\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(5,725\n\n)\n\nOther, net\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(7\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n(205\n\n)\n\n \n\n \n\n(192\n\n)\n\n \n\n \n\n(404\n\n)\n\nNet income\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n17,087\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n222\n\n \n\n \n\n \n\n17,309\n\n \n\nBalances as of May 31, 2026\n\n \n\n \n\n— (1)\n\n \n\n \n\n \n\n2,880\n\n \n\n \n\n$\n\n48,197\n\n \n\n \n\n$\n\n(4,309\n\n)\n\n \n\n$\n\n(1,380\n\n)\n\n \n\n$\n\n548\n\n \n\n \n\n$\n\n43,056\n\n \n\n \n\n(1)\nWe issued 50,000 shares of our 6.50% Series D Mandatory Convertible Preferred Stock on February 5, 2026. As of May 31, 2026, 50,000 shares were outstanding.\n\n \n\n \n\nSee notes to consolidated financial statements.\n\n \n\n67\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nORACLE CORPORATION\n\nCONSOLIDATED STATEMENTS OF CASH FLOWS\n\nFor the Years Ended May 31, 2026, 2025 and 2024\n\n \n\n \n\n \n\nYear Ended May 31,\n\n \n\n(in millions)\n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nCash flows from operating activities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet income\n\n \n\n$\n\n17,087\n\n \n\n \n\n$\n\n12,443\n\n \n\n \n\n$\n\n10,467\n\n \n\nAdjustments to reconcile net income to net cash provided by operating activities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nDepreciation\n\n \n\n \n\n7,623\n\n \n\n \n\n \n\n3,867\n\n \n\n \n\n \n\n3,129\n\n \n\nAmortization of intangible assets\n\n \n\n \n\n1,671\n\n \n\n \n\n \n\n2,307\n\n \n\n \n\n \n\n3,010\n\n \n\nDeferred income taxes\n\n \n\n \n\n(917\n\n)\n\n \n\n \n\n(1,637\n\n)\n\n \n\n \n\n(2,139\n\n)\n\nStock-based compensation\n\n \n\n \n\n4,811\n\n \n\n \n\n \n\n4,674\n\n \n\n \n\n \n\n3,974\n\n \n\nGains from investments and other, net\n\n \n\n \n\n(2,433\n\n)\n\n \n\n \n\n667\n\n \n\n \n\n \n\n720\n\n \n\nChanges in operating assets and liabilities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nIncrease in trade receivables, net\n\n \n\n \n\n(2,190\n\n)\n\n \n\n \n\n(653\n\n)\n\n \n\n \n\n(965\n\n)\n\nDecrease in prepaid expenses and other assets\n\n \n\n \n\n2,179\n\n \n\n \n\n \n\n266\n\n \n\n \n\n \n\n542\n\n \n\nDecrease in accounts payable and other liabilities\n\n \n\n \n\n(240\n\n)\n\n \n\n \n\n(608\n\n)\n\n \n\n \n\n(594\n\n)\n\nDecrease in income taxes payable\n\n \n\n \n\n(256\n\n)\n\n \n\n \n\n(659\n\n)\n\n \n\n \n\n(127\n\n)\n\nIncrease in deferred revenues from customer prepayments with significant financing component\n\n \n\n \n\n4,592\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nIncrease in other deferred revenues\n\n \n\n \n\n50\n\n \n\n \n\n \n\n154\n\n \n\n \n\n \n\n656\n\n \n\nNet cash provided by operating activities\n\n \n\n \n\n31,977\n\n \n\n \n\n \n\n20,821\n\n \n\n \n\n \n\n18,673\n\n \n\nCash flows from investing activities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nPurchases of marketable securities and other investments and acquisitions\n\n \n\n \n\n(2,039\n\n)\n\n \n\n \n\n(1,272\n\n)\n\n \n\n \n\n(1,066\n\n)\n\nProceeds from sales and maturities of marketable securities and other investments\n\n \n\n \n\n5,848\n\n \n\n \n\n \n\n776\n\n \n\n \n\n \n\n572\n\n \n\nCapital expenditures\n\n \n\n \n\n(55,663\n\n)\n\n \n\n \n\n(21,215\n\n)\n\n \n\n \n\n(6,866\n\n)\n\nNet cash used for investing activities\n\n \n\n \n\n(51,854\n\n)\n\n \n\n \n\n(21,711\n\n)\n\n \n\n \n\n(7,360\n\n)\n\nCash flows from financing activities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nProceeds from issuances of common stock\n\n \n\n \n\n1,449\n\n \n\n \n\n \n\n653\n\n \n\n \n\n \n\n742\n\n \n\nPayments for repurchases of common stock\n\n \n\n \n\n(95\n\n)\n\n \n\n \n\n(600\n\n)\n\n \n\n \n\n(1,202\n\n)\n\nShares repurchased for tax withholdings upon vesting of restricted stock-based awards\n\n \n\n \n\n(111\n\n)\n\n \n\n \n\n(900\n\n)\n\n \n\n \n\n(2,040\n\n)\n\nProceeds from issuances of mandatory convertible preferred stock, net of issuance costs\n\n \n\n \n\n4,954\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nPayments of dividends to stockholders\n\n \n\n \n\n(5,787\n\n)\n\n \n\n \n\n(4,743\n\n)\n\n \n\n \n\n(4,391\n\n)\n\n(Repayments of) proceeds from issuances of commercial paper, net\n\n \n\n \n\n(2,285\n\n)\n\n \n\n \n\n1,889\n\n \n\n \n\n \n\n(167\n\n)\n\nProceeds from short-term financing related to capital expenditures, net\n\n \n\n \n\n3,345\n\n \n\n \n\n \n\n1,422\n\n \n\n \n\n \n\n—\n\n \n\nProceeds from issuances of senior notes, term loan credit agreements and other borrowings, net of issuance costs\n\n \n\n \n\n46,093\n\n \n\n \n\n \n\n19,548\n\n \n\n \n\n \n\n—\n\n \n\nRepayments of senior notes, term loan credit agreements and other borrowings\n\n \n\n \n\n(6,942\n\n)\n\n \n\n \n\n(15,841\n\n)\n\n \n\n \n\n(3,500\n\n)\n\nOther financing activities, net\n\n \n\n \n\n(337\n\n)\n\n \n\n \n\n(330\n\n)\n\n \n\n \n\n4\n\n \n\nNet cash provided by (used for) financing activities\n\n \n\n \n\n40,284\n\n \n\n \n\n \n\n1,098\n\n \n\n \n\n \n\n(10,554\n\n)\n\nEffect of exchange rate changes on cash and cash equivalents\n\n \n\n \n\n96\n\n \n\n \n\n \n\n124\n\n \n\n \n\n \n\n(70\n\n)\n\nNet increase in cash and cash equivalents\n\n \n\n \n\n20,503\n\n \n\n \n\n \n\n332\n\n \n\n \n\n \n\n689\n\n \n\nCash and cash equivalents at beginning of period\n\n \n\n \n\n10,786\n\n \n\n \n\n \n\n10,454\n\n \n\n \n\n \n\n9,765\n\n \n\nCash and cash equivalents at end of period\n\n \n\n$\n\n31,289\n\n \n\n \n\n$\n\n10,786\n\n \n\n \n\n$\n\n10,454\n\n \n\nNon-cash investing activities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nUnpaid capital expenditures\n\n \n\n$\n\n5,279\n\n \n\n \n\n$\n\n2,970\n\n \n\n \n\n$\n\n1,637\n\n \n\nSupplemental schedule of cash flow data:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCash paid for income taxes\n\n \n\n$\n\n3,704\n\n \n\n \n\n$\n\n4,020\n\n \n\n \n\n$\n\n3,560\n\n \n\nCash paid for interest\n\n \n\n$\n\n3,896\n\n \n\n \n\n$\n\n3,374\n\n \n\n \n\n$\n\n3,655\n\n \n\n \n\nSee notes to consolidated financial statements.\n\n68\n\n[Table of Contents](#toc_page)\n\n \n\n \n\n \n\nORACLE CORPORATION\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nMay 31, 2026\n\n \n\n1.\nORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES\n\nOracle Corporation provides products and services that build, run and support enterprise information technology (IT) frameworks. Our products and services include enterprise applications and infrastructure offerings that incorporate and are enhanced by artificial intelligence (AI) technologies. We deliver our products and services to customers worldwide through a variety of flexible and interoperable IT deployment models. These models include cloud-based, on-premise and hybrid deployments. Oracle cloud offerings include Oracle Cloud Applications and Oracle Cloud Infrastructure (collectively Oracle Cloud), which provide comprehensive and integrated applications and infrastructure services, enabling our customers to choose the best option that meets their specific business needs. Customers may also elect to purchase Oracle software licenses and hardware products and related services to manage their own cloud-based or on-premise IT environments. Customers that purchase our software licenses may elect to purchase software support contracts, which provide our customers with rights to unspecified license upgrades and enhancements during the term of the support period as well as technical support assistance. Customers that purchase our hardware products may elect to purchase hardware support contracts, which provide customers with software updates and can include product repairs, maintenance services and technical support services. We also offer customers a broad set of services offerings that are designed to maximize the performance of their investments in Oracle technologies.\n\nOracle Corporation conducts business globally and was incorporated in the state of Delaware.\n\nBasis of Financial Statements\n\nThe consolidated financial statements include our accounts and the accounts of our wholly- and majority-owned subsidiaries. Noncontrolling interest positions of certain of our consolidated entities are reported as a separate component of consolidated equity from the equity attributable to Oracle’s stockholders for all periods presented. The noncontrolling interests in our net income were not significant to our consolidated results for the periods presented and therefore have not been presented separately and instead are included as a component of non-operating income (expenses), net in our consolidated statements of operations. Intercompany transactions and balances have been eliminated. We reclassed certain prior year amounts and balances and their related disclosures to conform to the current period’s presentation for all periods presented in our consolidated financial statements. Such reclassifications did not affect total revenue, income from operations or net income.\n\nIn fiscal 2026, we adopted Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09) on a prospective basis. ASU 2023-09 requires certain additional disclosure. Refer to Note 12 for additional information.\n\nUse of Estimates\n\nOur consolidated financial statements are prepared in accordance with United States (U.S.) generally accepted accounting principles (GAAP) as set forth in the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC), and we consider various staff accounting bulletins and other applicable guidance issued by the U.S. Securities and Exchange Commission. These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. To the extent that there are differences between these estimates, judgments or assumptions and actual results, our consolidated financial statements will be affected. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its\n\n69\n\n[Table of Contents](#toc_page)\n\n \n\n \n\napplication. There are also areas in which management’s judgment in selecting among available alternatives would not produce a materially different result.\n\nRevenue Recognition\n\nOur sources of revenues are:\n\n•\ncloud and software revenues, comprising of: cloud revenues, which includes cloud applications and cloud infrastructure revenues; and software revenues, which includes software license and software support revenues;\n\n•\nhardware revenues, which include the sale of hardware products, including Oracle Engineered Systems, servers and storage products, and industry-specific hardware; and hardware support revenues; and\n\n•\nservices revenues, which are earned from providing cloud-, software- and hardware-related services including consulting and customer success services.\n\nCloud revenues include revenues from Oracle Cloud offerings, which deliver applications and infrastructure technologies via cloud-based deployment models that we develop functionality for, provide unspecified updates and enhancements for, deploy, host, manage, upgrade and support and that customers access by entering into a subscription agreement with us for a stated period.\n\nSoftware revenues primarily represent revenues earned from granting customers perpetual licenses to use our applications or infrastructure offerings, such as our database, middleware, application and industry-specific software products, and the sale of support contracts related to these licenses, which are purchased by our customers at their option. Customers may deploy their software license in a cloud-based, on-premise or hybrid IT environment. Software support contracts provide customers with rights to unspecified software product upgrades, maintenance releases and patches released during the term of the support period and include access to technical content and support. Software support contracts are generally priced as a percentage of the net software license fees. Substantially all of our customers elect to purchase and renew their software support contracts annually.\n\nHardware revenues include revenues from the sale of hardware products and the sale of our hardware support offerings. Hardware support contracts are generally priced as a percentage of the net hardware products fees.\n\nOur services are offered to customers as standalone arrangements or as a part of arrangements to customers buying other products and services. Our consulting services are designed to help our customers to, among others, deploy, architect, integrate, upgrade and secure their investments in Oracle applications and infrastructure technologies. Our customer success services are designed to provide supplemental support services, performance services and higher availability for Oracle products and services.\n\nWe apply the provisions of ASC 606, Revenue from Contracts with Customers (ASC 606) as a single standard for revenue recognition that applies to all of our cloud, software, hardware and services arrangements and generally require revenues to be recognized upon the transfer of control of promised goods or services provided to our customers, reflecting the amount of consideration we expect to receive for those goods or services. Pursuant to ASC 606, revenues are recognized upon the application of the following steps:\n\n•\nidentification of the contract, or contracts, with a customer;\n\n•\nidentification of the performance obligations in the contract;\n\n•\ndetermination of the transaction price;\n\n•\nallocation of the transaction price to each performance obligation in the contract; and\n\n•\nrecognition of revenues when, or as, the contractual performance obligations are satisfied.\n\nThe timing of revenue recognition may differ from the timing of invoicing to our customers. We record an unbilled receivable, which is included within accounts receivable on our consolidated balance sheets, when revenue is recognized prior to invoicing. We record deferred revenues on our consolidated balance sheets when revenues are to be recognized subsequent to cash collection for an invoice. Our standard payment terms are generally net 30 days\n\n70\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nbut may vary. Invoices for software licenses and hardware products are generally issued when the license is made available for customer use or upon delivery to the customer of the hardware product. Invoices for software support and hardware support contracts are generally invoiced annually in advance. Cloud applications and cloud infrastructure contracts are generally invoiced annually, quarterly or monthly. Services are generally invoiced in advance or as the services are performed. Contracts that contain a significant financing component (either because the customer has made significant prepayment before the corresponding performance obligations are delivered or because we have provided long-term payment plans to the customer) have adjustments to the transaction price to reflect the time value of money. The related interest component is recorded as either interest expense or interest income in non-operating income (expenses), net within our consolidated statements of operations based on applicable interest rates for such contracts.\n\nOur revenue arrangements generally include standard warranty or service level provisions that our arrangements will perform and operate in all material respects as defined in the respective agreements, the financial impacts of which have historically been and are expected to continue to be insignificant. Our arrangements generally do not include a general right of return relative to the delivered products or services. We recognize revenues net of any taxes collected from customers, which are subsequently remitted to governmental authorities.\n\nRevenue Recognition for Cloud Services\n\nRevenues from cloud offerings provided on a subscription basis are generally recognized ratably over the contractual period that the services are delivered, beginning on the date our service is made available to a customer. We recognize revenue ratably because the customer receives and consumes the benefits of the cloud offerings throughout the contract period. Revenues from infrastructure cloud offerings that are provided on a consumption basis are generally recognized based on the utilization of the services by the customer.\n\nRevenue Recognition for Software – License and Support\n\nRevenues from distinct software license performance obligations are generally recognized upfront at the point in time when the software is made available to the customer to download and use. Revenues from usage-based royalty arrangements for distinct software licenses are recognized at the point in time when the software end user usage occurs. For usage-based royalty arrangements with a fixed minimum guarantee amount, the minimum amount is generally recognized upfront when the software is made available to the royalty customer.\n\nOracle’s primary performance obligations with respect to software support contracts is to provide customers with technical support as needed and unspecified software product upgrades, maintenance releases and patches during the term of the support period, if and when they are available. Oracle is obligated to make the software support services available continuously throughout the contract period. Therefore, revenues for software support contracts is generally recognized ratably over the contractual periods that the support services are provided.\n\nRevenue Recognition for Hardware – Product and Support\n\nThe hardware product and related software, such as an operating system or firmware, are highly interdependent and interrelated and are accounted for as a combined performance obligation. The revenues for this combined performance obligation are generally recognized at the point in time that the hardware product is delivered and ownership is transferred to the customer.\n\nOracle’s primary performance obligations with respect to hardware support contracts are to provide customers with technical support as needed and unspecified firmware upgrades, maintenance releases and patches during the term of the support period, if and when they are available, and hardware product repairs. Oracle is obligated to make the hardware support services available continuously throughout the contract period. Therefore, revenues for hardware support contracts are generally recognized ratably over the contractual periods that the support services are provided.\n\n71\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nRevenue Recognition for Services\n\nServices revenues are generally recognized over time as the services are performed. Revenues for fixed price services are generally recognized over time applying input methods to estimate progress to completion. Revenues for consumption-based services are generally recognized as the services are performed.\n\nAllocation of the Transaction Price for Contracts that have Multiple Performance Obligations\n\nMany of our contracts include multiple performance obligations. Judgment is required in determining whether each performance obligation is distinct. Oracle products and services generally do not require a significant amount of integration or interdependency; therefore, our products and services are generally not combined. We allocate the transaction price for each contract to each performance obligation based on the relative standalone selling price (SSP) for each performance obligation within each contract.\n\nWe use judgment in determining the SSP for products and services. For substantially all performance obligations except certain cloud offerings and software licenses, we are able to establish the SSP based on the observable prices of products or services sold separately in comparable circumstances to similar customers. We typically establish an SSP range for our products and services which is reassessed on a periodic basis or when facts and circumstances change. For certain cloud offerings, SSP is estimated using an expected cost plus a reasonable margin approach. Our software licenses have not historically been sold on a standalone basis, as the vast majority of all customers elect to purchase software support contracts at the time of a software license purchase. Software support contracts are generally priced as a percentage of the net fees paid by the customer to access the license. We are unable to establish the SSP for our software licenses based on observable prices given the same products are sold for a broad range of amounts (that is, the selling price is highly variable) and a representative SSP is not discernible from past transactions or other observable evidence. As a result, the SSP for a software license included in a contract with multiple performance obligations is generally determined by applying a residual approach whereby all other performance obligations within a contract are first allocated a portion of the transaction price based upon their respective SSPs, with any residual amount of transaction price allocated to software license revenues.\n\nRemaining Performance Obligations from Contracts with Customers\n\nTrade receivables, net of allowance for credit losses, and deferred revenues are reported net of related uncollected deferred revenues in our consolidated balance sheets as of May 31, 2026 and 2025. The revenues recognized during the year ended May 31, 2026 and 2025 that were included in the opening deferred revenues balances as of May 31, 2025 and 2024 were approximately $9.4 billion and $9.3 billion, respectively. Revenues recognized from performance obligations satisfied in prior periods and impairment losses recognized on our receivables were immaterial during each year ended May 31, 2026, 2025 and 2024.\n\nRemaining performance obligations represent contracted revenues that had not yet been recognized, and include deferred revenues; invoices that have been issued to customers but were uncollected and have not been recognized as revenues; and amounts that will be invoiced and recognized as revenues in future periods. We have elected the optional exemption to not disclose the variable consideration for contracts in which the variable consideration expected to be received over the duration of the contract is allocated entirely to the wholly unsatisfied performance obligations. The volumes and amounts of customer contracts that we book and total revenues that we recognize are impacted by a variety of seasonal factors and the timing of booking of large contracts. In each fiscal year, the amounts and volumes of contracting activity, other than the impact of booking of large contracts, and our total revenues are typically highest in our fourth fiscal quarter and lowest in our first fiscal quarter. These seasonal impacts and the timing of booking of large contracts influence how our remaining performance obligations change over time and, combined with foreign exchange rate fluctuations and other factors, influence the amount of remaining performance obligations that we report at a point in time. As of May 31, 2026, our remaining performance obligations were $638 billion, of which we expect to recognize approximately 12% as revenues over the next twelve months, 34% over the subsequent month 13 to month 36, 34% over the subsequent month 37 to month 60 and the remainder thereafter.\n\n72\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nCustomer Prepayments and Sales of Financing Receivables\n\nCertain of our customer contracts include a significant financing component either because the customer has made significant prepayment before the corresponding performance obligations are delivered or because we have provided long-term payment plans to the customer. In determining whether a contract contains a significant financing component, we consider: (1) the expected timing between transfer of goods and services and customer payment; (2) the difference between the promised consideration and the cash selling price; and (3) prevailing market interest rates. We apply the practical expedient and do not adjust the promised amount of consideration for the effects of a significant financing component when the period between transfer of goods or services and customer payment is one year or less. During fiscal 2026, we received $4.6 billion of prepayments from customers that included a significant financing component. No prepayments were received from customers that included a significant financing component during fiscal 2025 and 2024. We recognize interest expense related to significant financing components separately from revenue. During fiscal 2026, such amounts were immaterial. We determine the discount rate based on a rate that reflects the credit characteristics of the party receiving financing, which is generally consistent with our incremental borrowing rate. The effects of significant financing components are reflected in deferred revenues and recognized over the period of performance.\n\nWe offer certain of our customers the option to acquire certain of our products and services offerings through separate long-term payment contracts. We generally sell these contracts that we have financed for our customers on a non-recourse basis to financial institutions within 90 days of the contracts’ dates of execution. We record the transfers of amounts due from customers to financial institutions as sales of financing receivables because we are considered to have surrendered control of these financing receivables. During fiscal 2026, 2025 and 2024, $1.9 billion, $1.6 billion and $1.4 billion, respectively, of our financing receivables were sold to financial institutions.\n\nBusiness Combinations\n\nWe apply the provisions of ASC 805, Business Combinations (ASC 805), in accounting for our acquisitions. ASC 805 requires that we evaluate whether a transaction pertains to an acquisition of assets, or to an acquisition of a business. A business is defined as an integrated set of assets and activities that is capable of being conducted and managed for the purpose of providing a return to investors. Asset acquisitions are accounted for by allocating the cost of the acquisition to the individual assets and liabilities assumed on a relative fair value basis; whereas the acquisition of a business requires us to recognize goodwill separately from the assets acquired and the liabilities assumed at the acquisition date fair values. Goodwill as of the business acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the business acquisition date as well as any contingent consideration, where applicable, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the business acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of a business acquisition’s measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of operations. Costs to exit or restructure certain activities of an acquired company or our internal operations are accounted for as termination and exit costs pursuant to ASC 420, Exit or Disposal Cost Obligations, and are accounted for separately from the business combination. A liability for costs associated with an exit or disposal activity is recognized and measured at its fair value in our consolidated statement of operations in the period in which the liability is incurred.\n\nMarketable and Non-Marketable Investments\n\nIn accordance with ASC 320, Investments—Debt Securities, and based on our intentions regarding these instruments, we classify substantially all of our marketable debt securities investments as available-for-sale. We carry these securities at fair value, and report the unrealized gains and losses, net of taxes, as a component of stockholders’ equity, except for unrealized losses, if any, determined to be related to credit losses, which we record within non-operating income (expenses), net in the accompanying consolidated statements of operations. We periodically evaluate our investments to determine if impairment charges are required. All of our marketable debt securities\n\n73\n\n[Table of Contents](#toc_page)\n\n \n\n \n\ninvestments are classified as current based on the nature of the investments and their availability for use in current operations.\n\nInvestments in equity securities, other than any equity method investments, are generally recorded at their fair values, if the fair values are readily determinable. Non-marketable equity securities for which the fair values are not readily determinable and where we do not have control of, nor significant influence in, the investee are recorded at cost, less any impairment, adjusted for observable price changes from orderly transactions for identical or similar investments of the same issuer with any gains or losses recorded as a component of non-operating income (expenses), net as of and for each reporting period. For investments through which we have significant influence in, but not control of, the investee, we account for such investments pursuant to the equity method of accounting whereby we record our proportionate share of the investee’s earnings or losses; amortization of certain differences between our investment basis and underlying equity in net assets of the investee; and impairment, if any, as a component of non-operating income (expenses), net for each reporting period. As per ASC 850, Related Party Disclosures, equity method investees are considered as related parties.\n\nOur investments in marketable debt and equity securities totaled $605 million and $417 million as of May 31, 2026 and 2025, respectively, and are included in current assets in the accompanying consolidated balance sheets.\n\nOur non-marketable debt investments and equity securities and related instruments totaled $2.3 billion and $2.1 billion as of May 31, 2026 and 2025, respectively, and substantially all of the balance is included in other non-current assets in the accompanying consolidated balance sheets and is subject to periodic credit losses and impairment reviews. The majority of the non-marketable debt and equity investments we held as of May 31, 2025 were with Ampere Computing Holdings LLC (Ampere), an equity method investee. On November 25, 2025, SoftBank Group Corp. acquired all of the equity interests of Ampere (the Ampere Acquisition). We received cash proceeds of $4.3 billion in exchange for our equity, debt and call option interests in Ampere in the Ampere Acquisition. We recorded $2.7 billion of realized gain, which is included in the non-operating income (expenses), net line item in our consolidated statements of operations for the year ended May 31, 2026. We have no remaining investment in Ampere as of May 31, 2026. The substantial majority of the non-marketable investments we held as of May 31, 2026 were with TikTok USDS Joint Venture LLC, an equity method investee in which we have an ownership interest of 15%.\n\nFair Values of Financial Instruments\n\nWe apply the provisions of ASC 820, Fair Value Measurement (ASC 820), to our assets and liabilities that we are required to measure at fair value pursuant to other accounting standards, including our investments in marketable debt and equity securities and our derivative financial instruments.\n\nThe additional disclosures regarding our fair value measurements are included in Note 3.\n\nAllowances for Credit Losses\n\nWe record allowances for credit losses based upon a specific review of all significant outstanding invoices. For those invoices not specifically reviewed, provisions are provided at differing rates, based upon the age of the receivable, collection history and current economic conditions. We write-off a receivable and charge it against its recorded allowance when we have exhausted our collection efforts without success.\n\nConcentrations of Risk\n\nFinancial instruments that are potentially subject to concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities, derivatives, trade receivables and non-marketable investments. Our cash and cash equivalents are generally held with large, diverse financial institutions worldwide to reduce the amount of exposure to any single financial institution. Investment policies have been implemented that limit purchases of marketable debt securities to investment-grade securities. Our derivative contracts are transacted with various financial institutions with high credit standings and any exposure to counterparty credit-related losses in these contracts is largely mitigated with collateral security agreements that provide for collateral to be received or posted when the net fair values of these contracts fluctuate from contractually established thresholds. Refer to “Marketable\n\n74\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nand Non-Marketable Investments” section above for additional information on our non-marketable investments. We generally do not require collateral to secure accounts receivable. The risk with respect to trade receivables is mitigated by credit evaluations we perform on our customers, the short duration of our payment terms for the significant majority of our customer contracts and by the diversification of our customer base. No single customer accounted for 10% or more of our total revenues in fiscal 2026, 2025 or 2024. We enter into certain large, long-term customer cloud arrangements that require us to make significant infrastructure investments, including data center capacity. For discretionary capital expenditures, the timing of such expenditures can be adjusted based on our liquidity position and access to additional financing. The economic returns on these investments are dependent on customer demand and the ability of our key customers to meet their contractual obligations. Changes in customer demand or the ability of our key customers to meet their contractual obligations may adversely affect operating margins, cash flows and could require evaluation of the recoverability of related long-lived assets.\n\nWe outsource the manufacturing, assembly and delivery of the substantial majority of our hardware products that we sell to our customers as well as use internally to deliver our cloud services to a variety of companies, many of which are located outside the U.S. Further, we have simplified our supply chain processes by reducing the number of third-party manufacturing partners and the number of locations where these third-party manufacturers build our hardware products. Any inability of these third-party manufacturing partners to deliver the contracted services for our hardware products could adversely impact future operating results of our cloud and software and hardware businesses.\n\nDeferred Sales Commissions\n\nWe defer sales commissions earned by our sales force that are considered to be incremental and recoverable costs of obtaining a cloud, software support and hardware support contract. Initial sales commissions for the majority of these aforementioned contracts are generally deferred and amortized on a straight-line basis over an average benefit period that we estimate to be four years. We determine the period of benefit by taking into consideration the historical and expected durations of our customer contracts, the expected useful lives of our technologies and other factors. Sales commissions for renewal contracts relating to certain of our cloud-based arrangements are generally deferred and then amortized on a straight-line basis over the related contractual renewal period, which is generally one to three years. Amortization of deferred sales commissions is included as a component of sales and marketing expenses in our consolidated statements of operations and asset balances for deferred sales commissions are included in other current assets and other non-current assets in our consolidated balance sheets.\n\nProperty, Plant and Equipment\n\nProperty, plant and equipment are stated at cost, less accumulated depreciation. Costs incurred are accumulated as construction in progress until the asset is brought into the condition and at the location for its intended use. Once the asset is in the condition and at the location for its intended use, it is amortized using the straight-line method of depreciation based on estimated useful lives of the assets, which range from one to 40 years. Finance lease Right-of-Use (ROU) assets are amortized over the lease term. Leasehold improvements are amortized over the lesser of the estimated useful lives of the improvements or the lease terms, as appropriate. Property, plant and equipment are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable at an appropriate asset or asset group level. We did not recognize any significant property impairment charges in fiscal 2026, 2025 or 2024. Note 4 below provides additional information regarding our Property, Plant and Equipment.\n\n75\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nGoodwill, Intangible Assets and Impairment Assessments\n\nGoodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. Intangible assets that are not considered to have an indefinite useful life are itemized in Note 5 below and are amortized over their useful lives, which generally range from one to 10 years. At least annually, we assess the useful lives of our finite lived intangible assets and may adjust the period over which these assets are amortized whenever events or changes in circumstances indicate that a shorter amortization period is more reflective of the period in which these assets contribute to our cash flows. Intangible assets are included within other non-current assets on our consolidated balance sheets.\n\nThe carrying amounts of our goodwill and intangible assets are reviewed for impairment annually and whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. When goodwill is assessed for impairment, we have the option to perform an assessment of qualitative factors of impairment (optional assessment) prior to necessitating a quantitative impairment test. Should the optional assessment be used for any given fiscal year, qualitative factors considered for a reporting unit include: cost factors; financial performance; legal, regulatory, contractual, political, business, or other factors; entity specific factors; industry and market considerations; macroeconomic conditions; and other relevant events and factors affecting the reporting unit. If we determine in the qualitative assessment that it is more likely than not that the fair value of the reporting unit is less than its carrying value, a quantitative test is then performed. Otherwise, no further testing is required. For those reporting units tested using a quantitative approach, we compare the fair value of each reporting unit with the carrying amount of the reporting unit, including goodwill. To determine the fair value of each reporting unit we utilize estimates, judgments and assumptions including estimated future cash flows the reporting unit is expected to generate on a discounted basis; the discount rate used as a part of the discounted cash flow analysis; future economic and market conditions; and market comparables of peer companies, among others. If, as per the quantitative test, the estimated fair value of the reporting unit is less than the carrying amount of the reporting unit, impairment is recognized for the difference, limited to the amount of goodwill recognized for the reporting unit. Our most recent goodwill impairment analysis was performed on March 1, 2026 and did not result in a goodwill impairment charge. We did not recognize impairment charges in fiscal 2025 or 2024.\n\nRecoverability of finite lived intangible assets is evaluated by comparison of the carrying amount of the asset to the future undiscounted cash flows that are expected to be generated by the lowest level associated asset grouping. Recoverability of indefinite lived intangible assets is evaluated by comparison of the carrying amount of the asset to its fair value. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. We did not recognize any intangible asset impairment charges in fiscal 2026, 2025 or 2024.\n\nDerivative Financial Instruments\n\nDuring fiscal 2026, 2025 and 2024, we used derivative financial instruments to manage foreign currency and interest rate risks. We do not use derivative financial instruments for trading purposes. We account for these instruments in accordance with ASC 815, Derivatives and Hedging (ASC 815), which requires that every derivative instrument be recorded on the balance sheet as either an asset or liability measured at its fair value as of each reporting date. ASC 815 also requires that changes in our derivatives’ fair values be recognized in earnings, unless specific hedge accounting and documentation criteria are met (i.e., the instruments are accounted for as certain types of hedges).\n\nThe accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. For a derivative instrument designated as a fair value hedge, loss or gain attributable to the risk being hedged is recognized in earnings in the period of change with a corresponding earnings offset recorded to the item for which the risk is being hedged. For a derivative instrument designated as a cash flow hedge, during each reporting period, we record the change in fair value of the derivative to accumulated other comprehensive loss (AOCL) in our consolidated balance sheets and the change is reclassified to earnings in the period the hedged item affects earnings.\n\n76\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nLeases\n\nWe apply the provisions of ASC 842, Leases (ASC 842), in accounting for our leases. Accordingly, we determine if an arrangement is a lease at its inception. Lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. We generally use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future payments, because the implicit rate of the lease is generally not known. ROU assets related to our leases are measured at lease inception based on the initial measurement of the lease liability, plus any prepaid lease payments and less any lease incentives. Our lease terms that are used in determining our lease liabilities at lease inception may include options to extend or terminate the leases when it is reasonably certain that we will exercise such options. For operating leases, we generally recognize the lease expense on a straight-line basis over the lease term and classify both the ROU assets amortization and imputed interest as operating expenses. For finance leases, ROU assets are amortized on a straight-line basis over the lease term and are classified as operating expense and imputed interest is classified as interest expense. We have lease agreements with lease and non-lease components, and in such cases, we generally account for the components as a single lease component. We do not recognize lease assets and lease liabilities for any lease with an original lease term of less than one year. An impairment charge is recorded for an abandoned ROU asset.\n\nROU assets related to operating and finance leases are included in operating lease ROU assets and property, plant and equipment, net, respectively; short-term operating and finance lease liabilities are included in other current liabilities; and long-term operating and finance lease liabilities are included in operating lease liabilities and other non-current liabilities, respectively, in our consolidated balance sheets.\n\nCash flow movements related to operating lease activities are included in operating cash flows and those related to finance leases are included in operating cash flows for the interest component and in financing cash flows for the principal payment component in our consolidated statements of cash flows for the years ended May 31, 2026, 2025 and 2024. Note 9 below provides additional information regarding our leases.\n\nLegal and Other Contingencies\n\nWe are currently involved in various claims and legal proceedings. Quarterly, we review the status of each significant matter and assess our potential financial exposure. For legal and other contingencies that are not a part of a business combination or related to income taxes, we accrue a liability for an estimated loss if the potential loss from any claim or legal proceeding is considered probable, and the amount can be reasonably estimated. Note 15 below provides additional information regarding certain of our legal contingencies.\n\nForeign Currency\n\nWe transact business in various foreign currencies. In general, the functional currency of a foreign operation is the local country’s currency. Consequently, revenues and expenses of operations outside the U.S. are translated into U.S. Dollars using weighted-average exchange rates while assets and liabilities of operations outside the U.S. are translated into U.S. Dollars using exchange rates at the balance sheet dates. The effects of foreign currency translation adjustments are included in stockholders’ equity as a component of AOCL in the accompanying consolidated balance sheets and related periodic movements are summarized as a line item in our consolidated statements of comprehensive income. Net foreign exchange transaction losses included in non-operating income (expenses), net in the accompanying consolidated statements of operations were $131 million, $147 million and $228 million in fiscal 2026, 2025 and 2024, respectively.\n\n77\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nStock-Based Compensation\n\nWe account for share-based payments to employees, including grants of service-based restricted stock unit (RSU) awards, service-based employee stock options, performance-based stock options (PSOs) and purchases under employee stock purchase plans in accordance with ASC 718, Compensation—Stock Compensation, which requires that share-based payments (to the extent they are compensatory) be recognized in our consolidated statements of operations based on their fair values. Beginning in fiscal 2026, most Oracle employees who received equity awards were given a choice to receive their awards in the form of (1) 100% stock options, (2) 100% RSUs or (3) a combination of 50% stock options and 50% RSUs (the Employee Choice Program). The Compensation Committee of our Board of Directors has determined that a ratio of four stock options to one RSU should be used, consistent with its historic approach, for equity awards granted to Oracle employees. We account for forfeitures of stock-based awards as they occur.\n\nFor our service-based stock awards, we recognize stock-based compensation expense on a straight-line basis over the service period of the award, which is generally four years.\n\nFor our PSOs, we recognize stock-based compensation expense on a straight-line basis for tranches that are probable of achievement over the estimated implicit service period for performance-metric achievement. During our interim and annual reporting periods, stock-based compensation expense is recorded based on expected attainment of performance targets. Changes in our estimates of the expected attainment of performance targets that result in a change in the number of shares that are expected to vest, or changes in our estimates of implicit service periods, may cause the amount of stock-based compensation expense that we record for each interim reporting period to vary. Any changes in estimates that impact our expectation of the number of shares that are expected to vest are reflected in the amount of stock-based compensation expense that we recognize for each PSO tranche on a cumulative catch-up basis during each interim reporting period in which such estimates are altered.\n\nWe record deferred tax assets for stock-based compensation awards that result in deductions on certain of our income tax returns based on the amount of stock-based compensation recognized in each reporting period and the fair values attributable to the vested portion of stock awards assumed in connection with a business combination at the statutory tax rates in the jurisdictions that we are able to recognize such tax deductions. The impacts of the actual tax deductions for stock-based awards that are realized in these jurisdictions are generally recognized in the reporting period that a restricted stock-based award vests or a stock option is exercised with any shortfall/windfall relative to the deferred tax asset established and recorded as a discrete detriment/benefit to our provision for income taxes in such period. Note 11 below provides additional information regarding our stock-based compensation plans and related expenses.\n\nResearch and Development Costs and Software Development Costs\n\nResearch and development costs are generally expensed as incurred in accordance with ASC 730, Research and Development. Software development costs required to be capitalized under ASC 985-20, Costs of Software to be Sold, Leased or Marketed, and under ASC 350-40, Internal-Use Software, were not material to our consolidated financial statements in fiscal 2026, 2025 and 2024.\n\nNon-Operating Income (Expenses), net\n\nNon-operating income (expenses), net consists primarily of interest income, net foreign currency exchange losses, the noncontrolling interests in the net profits of our majority-owned subsidiaries (primarily Oracle Financial Services Software Limited and Oracle Corporation Japan), net gains and losses related to marketable and non-marketable investments, including net gains and losses attributable to equity method investments and net other income and expenses, including net gains and losses from our investment portfolio related to our deferred compensation plan, for which an equal and offsetting amount was recorded to our operating expenses during the same period, and non-service net periodic pension income and losses.\n\n78\n\n[Table of Contents](#toc_page)\n\n \n\n \n\n \n\n \n\n \n\nYear Ended May 31,\n\n \n\n(in millions)\n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nInterest income\n\n \n\n$\n\n780\n\n \n\n \n\n$\n\n578\n\n \n\n \n\n$\n\n451\n\n \n\nForeign currency losses, net\n\n \n\n \n\n(131\n\n)\n\n \n\n \n\n(147\n\n)\n\n \n\n \n\n(228\n\n)\n\nNoncontrolling interests in income\n\n \n\n \n\n(222\n\n)\n\n \n\n \n\n(184\n\n)\n\n \n\n \n\n(186\n\n)\n\nGains (losses) from marketable and non-marketable investments, net\n\n \n\n \n\n2,811\n\n \n\n \n\n \n\n(278\n\n)\n\n \n\n \n\n(303\n\n)\n\nOther income, net\n\n \n\n \n\n309\n\n \n\n \n\n \n\n91\n\n \n\n \n\n \n\n168\n\n \n\nTotal non-operating income (expenses), net\n\n \n\n$\n\n3,547\n\n \n\n \n\n$\n\n60\n\n \n\n \n\n$\n\n(98\n\n)\n\n \n\nIncome Taxes\n\nWe account for income taxes in accordance with ASC 740, Income Taxes (ASC 740). Deferred income taxes are recorded for the expected tax consequences of temporary differences between the tax bases of assets and liabilities for financial reporting purposes and amounts recognized for income tax purposes. We record a valuation allowance to reduce our deferred tax assets to the amount of future tax benefit that is more likely than not to be realized.\n\nA two-step approach is applied pursuant to ASC 740 in the recognition and measurement of uncertain tax positions taken or expected to be taken in a tax return. The first step is to determine if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained in an audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. We recognize interest and penalties related to uncertain tax positions in our provision for income taxes line of our consolidated statements of operations.\n\nRecent Accounting Pronouncements\n\nIncome Statement: In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses and also issued subsequent guidance clarifying the effective date of the initial guidance (collectively, Subtopic 220-40), which enhances the disclosures required for expense disaggregation in our annual and interim consolidated financial statements. This guidance is effective for us for our annual reporting for fiscal 2028 and for interim period reporting beginning in fiscal 2029 on a prospective basis. Both early adoption and retrospective application are permitted. We are currently evaluating the impact of our pending adoption of Subtopic 220-40 on our consolidated financial statements.\n\nSoftware Development Costs: In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (ASU 2025-06), which clarifies and modernizes the accounting for internal-use software. ASU 2025-06 is effective for us in the first quarter of fiscal 2029, with early adoption permitted. The standard permits application of the guidance using a prospective, retrospective, or modified transition approach. We are currently evaluating the impact of our pending adoption of ASU 2025-06 on our consolidated financial statements.\n\n2.\nCASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES\n\nCash and cash equivalents primarily consist of deposits held at major banks, including time deposits and money market funds with original maturities of 90 days or less. Marketable securities primarily consist of time deposits with original maturities at the time of purchase greater than 90 days.\n\nThe amortized principal amounts of our cash, cash equivalents and marketable securities approximated their fair values at May 31, 2026 and 2025. We use the specific identification method to determine any realized gains or losses from the sale of our marketable securities classified as available-for-sale. Such realized gains and losses were\n\n79\n\n[Table of Contents](#toc_page)\n\n \n\n \n\ninsignificant for fiscal 2026, 2025 and 2024. The following table summarizes the components of our cash equivalents and marketable securities held, substantially all of which were classified as available-for-sale:\n\n \n\n \n\n \n\nMay 31,\n\n \n\n(in millions)\n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\nMoney market funds\n\n \n\n$\n\n23,387\n\n \n\n \n\n$\n\n2,220\n\n \n\nTime deposits and other\n\n \n\n \n\n739\n\n \n\n \n\n \n\n585\n\n \n\nTotal investments\n\n \n\n$\n\n24,126\n\n \n\n \n\n$\n\n2,805\n\n \n\nInvestments classified as cash equivalents\n\n \n\n$\n\n23,521\n\n \n\n \n\n$\n\n2,388\n\n \n\nInvestments classified as marketable securities\n\n \n\n$\n\n605\n\n \n\n \n\n$\n\n417\n\n \n\n \n\nAs of May 31, 2026 and 2025, all of our marketable debt securities investments mature within one year. Our investment portfolio is subject to market risk due to changes in interest rates. As described above, we limit purchases of marketable debt securities to investment-grade securities, which have high credit ratings and also limit the amount of credit exposure to any one issuer. As stated in our investment policy, we are averse to principal loss and seek to preserve our invested funds by limiting default risk and market risk.\n\nRestricted cash that was included within cash and cash equivalents as presented within our consolidated balance sheets as of May 31, 2026 and 2025 and our consolidated statements of cash flows for the years ended May 31, 2026, 2025 and 2024 was immaterial.\n\n3.\nFAIR VALUE MEASUREMENTS\n\nWe perform fair value measurements in accordance with ASC 820. ASC 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at their fair values, we consider the principal or most advantageous market in which we would transact and consider assumptions that market participants would use when pricing the assets or liabilities, such as inherent risk, transfer restrictions and risk of nonperformance.\n\nASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset’s or a liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 establishes three levels of inputs that may be used to measure fair value:\n\n•\nLevel 1: quoted prices in active markets for identical assets or liabilities;\n\n•\nLevel 2: inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or\n\n•\nLevel 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair values of the assets or liabilities.\n\n80\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nAssets and Liabilities Measured at Fair Value on a Recurring Basis\n\nOur assets and liabilities measured at fair value on a recurring basis consisted of the following (Level 1 and Level 2 inputs are defined above):\n\n \n\n \n\n \n\nMay 31, 2026\n\n \n\n \n\nMay 31, 2025\n\n \n\n \n\n \n\nFair Value Measurements\nUsing Input Types\n\n \n\n \n\n \n\n \n\n \n\nFair Value Measurements\nUsing Input Types\n\n \n\n \n\n \n\n \n\n(in millions)\n\n \n\nLevel 1\n\n \n\n \n\nLevel 2\n\n \n\n \n\nTotal\n\n \n\n \n\nLevel 1\n\n \n\n \n\nLevel 2\n\n \n\n \n\nTotal\n\n \n\nAssets:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nMoney market funds\n\n \n\n$\n\n23,387\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n23,387\n\n \n\n \n\n$\n\n2,220\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n2,220\n\n \n\nTime deposits and other\n\n \n\n \n\n68\n\n \n\n \n\n \n\n671\n\n \n\n \n\n \n\n739\n\n \n\n \n\n \n\n59\n\n \n\n \n\n \n\n526\n\n \n\n \n\n \n\n585\n\n \n\nDerivative financial instruments\n\n \n\n \n\n—\n\n \n\n \n\n \n\n36\n\n \n\n \n\n \n\n36\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n54\n\n \n\n \n\n \n\n54\n\n \n\nTotal assets\n\n \n\n$\n\n23,455\n\n \n\n \n\n$\n\n707\n\n \n\n \n\n$\n\n24,162\n\n \n\n \n\n$\n\n2,279\n\n \n\n \n\n$\n\n580\n\n \n\n \n\n$\n\n2,859\n\n \n\nLiabilities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nDerivative financial instruments\n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n26\n\n \n\n \n\n$\n\n26\n\n \n\n \n\nOur valuation techniques used to measure the fair values of our instruments that were classified as Level 1 in the table above were derived from quoted market prices and active markets for these instruments that exist. Our valuation techniques used to measure the fair values of Level 2 instruments listed in the table above were derived from the following: non-binding market consensus prices that were corroborated by observable market data, quoted market prices for similar instruments, or pricing models, such as discounted cash flow techniques, with all significant inputs derived from or corroborated by observable market data including reference rate yield curves, among others.\n\nBased on the trading prices of the $128.1 billion and $90.3 billion of senior notes and other long-term borrowings and the related fair value hedges, if any, that we had outstanding as of May 31, 2026 and 2025, respectively, the estimated fair values of the senior notes and other long-term borrowings and the related fair value hedges, if any, using Level 2 inputs at May 31, 2026 and 2025 were $114.4 billion and $81.3 billion, respectively.\n\n4.\nPROPERTY, PLANT AND EQUIPMENT\n\nProperty, plant and equipment, net consisted of the following:\n\n \n\n \n\n \n\nEstimated\n\n \n\nMay 31,\n\n \n\n(Dollars in millions)\n\n \n\nUseful Life\n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\nComputer, network, machinery and equipment\n\n \n\n1-6 years(1)\n\n \n\n$\n\n59,634\n\n \n\n \n\n$\n\n30,345\n\n \n\nBuildings and improvements\n\n \n\n1-40 years\n\n \n\n \n\n21,263\n\n \n\n \n\n \n\n10,881\n\n \n\nFurniture, fixtures and other\n\n \n\n5-15 years\n\n \n\n \n\n452\n\n \n\n \n\n \n\n466\n\n \n\nLand\n\n \n\n—\n\n \n\n \n\n1,329\n\n \n\n \n\n \n\n1,352\n\n \n\nConstruction in progress(2)\n\n \n\n—\n\n \n\n \n\n39,973\n\n \n\n \n\n \n\n16,510\n\n \n\nTotal property, plant and equipment\n\n \n\n1-40 years\n\n \n\n \n\n122,651\n\n \n\n \n\n \n\n59,554\n\n \n\nAccumulated depreciation\n\n \n\n \n\n \n\n \n\n(22,694\n\n)\n\n \n\n \n\n(16,032\n\n)\n\nTotal property, plant and equipment, net\n\n \n\n \n\n \n\n$\n\n99,957\n\n \n\n \n\n$\n\n43,522\n\n \n\n \n\n(1)\nComprised primarily of servers and networking equipment with estimated useful life of six years.\n\n(2)\nComprised primarily of servers, networking equipment and leasehold improvements to be deployed at our data centers.\n\nDepreciation expense on property, plant and equipment in fiscal 2026, 2025 and 2024 were $7.6 billion, $3.9 billion and $3.1 billion, respectively. Property, plant and equipment, net includes ROU assets recorded in connection with lease arrangements that are accounted for as finance leases, totaling $7.5 billion and $2.9 billion as of May 31, 2026 and 2025, respectively.\n\n81\n\n[Table of Contents](#toc_page)\n\n \n\n \n\n5.\nINTANGIBLE ASSETS AND GOODWILL\n\nThe changes in intangible assets for fiscal 2026 and the net book value of intangible assets as of May 31, 2026 and 2025 were as follows:\n\n \n\n \n\nIntangible Assets, Gross\n\n \n\n \n\nAccumulated Amortization\n\n \n\n \n\nIntangible Assets, Net\n\n \n\n(in millions)\n\n \n\nMay 31,\n2025\n\n \n\n \n\nAdditions\n\n \n\n \n\nRetirements\n\n \n\n \n\nMay 31,\n2026\n\n \n\n \n\nMay 31,\n2025\n\n \n\n \n\nExpense\n\n \n\n \n\nRetirements\n\n \n\n \n\nMay 31,\n2026\n\n \n\n \n\nMay 31,\n2025\n\n \n\n \n\nMay 31,\n2026\n\n \n\nCloud and software agreements and related relationships\n\n \n\n$\n\n9,670\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n(1,794\n\n)\n\n \n\n$\n\n7,876\n\n \n\n \n\n$\n\n(6,471\n\n)\n\n \n\n$\n\n(558\n\n)\n\n \n\n$\n\n1,794\n\n \n\n \n\n$\n\n(5,235\n\n)\n\n \n\n$\n\n3,199\n\n \n\n \n\n$\n\n2,641\n\n \n\nDeveloped technology\n\n \n\n \n\n4,143\n\n \n\n \n\n \n\n287\n\n \n\n \n\n \n\n(425\n\n)\n\n \n\n \n\n4,005\n\n \n\n \n\n \n\n(3,509\n\n)\n\n \n\n \n\n(627\n\n)\n\n \n\n \n\n425\n\n \n\n \n\n \n\n(3,711\n\n)\n\n \n\n \n\n634\n\n \n\n \n\n \n\n294\n\n \n\nOther\n\n \n\n \n\n2,827\n\n \n\n \n\n \n\n26\n\n \n\n \n\n \n\n(173\n\n)\n\n \n\n \n\n2,680\n\n \n\n \n\n \n\n(2,073\n\n)\n\n \n\n \n\n(486\n\n)\n\n \n\n \n\n173\n\n \n\n \n\n \n\n(2,386\n\n)\n\n \n\n \n\n754\n\n \n\n \n\n \n\n294\n\n \n\nTotal intangible assets, net\n\n \n\n$\n\n16,640\n\n \n\n \n\n$\n\n313\n\n \n\n \n\n$\n\n(2,392\n\n)\n\n \n\n$\n\n14,561\n\n \n\n \n\n$\n\n(12,053\n\n)\n\n \n\n$\n\n(1,671\n\n)\n\n \n\n$\n\n2,392\n\n \n\n \n\n$\n\n(11,332\n\n)\n\n \n\n$\n\n4,587\n\n \n\n \n\n$\n\n3,229\n\n \n\nAs of May 31, 2026, estimated future amortization expenses related to intangible assets were as follows (in millions):\n\nFiscal 2027\n\n \n\n$\n\n731\n\n \n\nFiscal 2028\n\n \n\n \n\n694\n\n \n\nFiscal 2029\n\n \n\n \n\n620\n\n \n\nFiscal 2030\n\n \n\n \n\n582\n\n \n\nFiscal 2031\n\n \n\n \n\n377\n\n \n\nThereafter\n\n \n\n \n\n225\n\n \n\nTotal intangible assets, net\n\n \n\n$\n\n3,229\n\n \n\n \n\nThe changes in the carrying amounts of goodwill, which is generally not deductible for tax purposes, for our operating segments for fiscal 2026 and 2025 were as follows:\n\n(in millions)\n\n \n\nCloud and Software\n\n \n\n \n\nHardware\n\n \n\n \n\nServices\n\n \n\n \n\nTotal Goodwill\n\n \n\nBalances as of May 31, 2024\n\n \n\n$\n\n57,072\n\n \n\n \n\n$\n\n2,732\n\n \n\n \n\n$\n\n2,426\n\n \n\n \n\n$\n\n62,230\n\n \n\nGoodwill adjustments, net(1)\n\n \n\n \n\n(23\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(23\n\n)\n\nBalances as of May 31, 2025\n\n \n\n \n\n57,049\n\n \n\n \n\n \n\n2,732\n\n \n\n \n\n \n\n2,426\n\n \n\n \n\n \n\n62,207\n\n \n\nGoodwill adjustments, net(1)\n\n \n\n \n\n65\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(11\n\n)\n\n \n\n \n\n54\n\n \n\nBalances as of May 31, 2026\n\n \n\n$\n\n57,114\n\n \n\n \n\n$\n\n2,732\n\n \n\n \n\n$\n\n2,415\n\n \n\n \n\n$\n\n62,261\n\n \n\n \n\n(1)\nAmounts include any changes in goodwill balances for the period presented that resulted from foreign currency translations.\n\n82\n\n[Table of Contents](#toc_page)\n\n \n\n \n\n6.\nNOTES PAYABLE AND OTHER BORROWINGS\n\nNotes payable and other borrowings consisted of the following:\n\n \n\n \n\n \n\n \n\nMay 31,\n\n \n\n \n\n \n\n \n\n2026\n\n \n\n2025\n\n(Amounts in millions)\n\n \n\nDate of\nIssuance\n\n \n\nAmount\n\n \n\n \n\nEffective\nInterest\nRate\n\n \n\nAmount\n\n \n\n \n\nEffective\nInterest\nRate\n\nFixed-rate senior notes:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n€750, 3.125%, due July 2025(1)\n\n \n\nJuly 2013\n\n \n\n$\n\n—\n\n \n\n \n\nN.A\n\n \n\n$\n\n841\n\n \n\n \n\n3.17%\n\n$1,000, 5.80%, due November 2025\n\n \n\nNovember 2022\n\n \n\n \n\n—\n\n \n\n \n\nN.A\n\n \n\n \n\n1,000\n\n \n\n \n\n5.93%\n\n$2,750, 1.65%, due March 2026\n\n \n\nMarch 2021\n\n \n\n \n\n—\n\n \n\n \n\nN.A\n\n \n\n \n\n2,750\n\n \n\n \n\n1.67%\n\n$3,000, 2.65%, due July 2026\n\n \n\nJuly 2016\n\n \n\n \n\n3,000\n\n \n\n \n\n2.73%\n\n \n\n \n\n3,000\n\n \n\n \n\n2.73%\n\n$2,250, 2.80%, due April 2027\n\n \n\nApril 2020\n\n \n\n \n\n2,250\n\n \n\n \n\n2.87%\n\n \n\n \n\n2,250\n\n \n\n \n\n2.87%\n\n$2,750, 3.25%, due November 2027\n\n \n\nNovember 2017\n\n \n\n \n\n2,750\n\n \n\n \n\n3.29%\n\n \n\n \n\n2,750\n\n \n\n \n\n3.29%\n\n$2,000, 2.30%, due March 2028\n\n \n\nMarch 2021\n\n \n\n \n\n2,000\n\n \n\n \n\n2.36%\n\n \n\n \n\n2,000\n\n \n\n \n\n2.36%\n\n$750, 4.50%, due May 2028\n\n \n\nFebruary 2023\n\n \n\n \n\n750\n\n \n\n \n\n4.60%\n\n \n\n \n\n750\n\n \n\n \n\n4.60%\n\n$1,500, 4.80%, due August 2028\n\n \n\nFebruary 2025\n\n \n\n \n\n1,500\n\n \n\n \n\n4.94%\n\n \n\n \n\n1,500\n\n \n\n \n\n4.94%\n\n$3,000, 4.55%, due February 2029(3)\n\n \n\nFebruary 2026\n\n \n\n \n\n3,000\n\n \n\n \n\n4.74%\n\n \n\n \n\n—\n\n \n\n \n\nN.A\n\n$1,500, 4.20%, due September 2029\n\n \n\nSeptember 2024\n\n \n\n \n\n1,500\n\n \n\n \n\n4.27%\n\n \n\n \n\n1,500\n\n \n\n \n\n4.27%\n\n$1,250, 6.15%, due November 2029\n\n \n\nNovember 2022\n\n \n\n \n\n1,250\n\n \n\n \n\n6.21%\n\n \n\n \n\n1,250\n\n \n\n \n\n6.21%\n\n$3,250, 2.95%, due April 2030\n\n \n\nApril 2020\n\n \n\n \n\n3,250\n\n \n\n \n\n3.00%\n\n \n\n \n\n3,250\n\n \n\n \n\n3.00%\n\n$750, 4.65%, due May 2030\n\n \n\nFebruary 2023\n\n \n\n \n\n750\n\n \n\n \n\n4.75%\n\n \n\n \n\n750\n\n \n\n \n\n4.75%\n\n$500, 3.25%, due May 2030\n\n \n\nMay 2015\n\n \n\n \n\n500\n\n \n\n \n\n3.35%\n\n \n\n \n\n500\n\n \n\n \n\n3.35%\n\n$3,000, 4.45%, due September 2030(3)\n\n \n\nSeptember 2025\n\n \n\n \n\n3,000\n\n \n\n \n\n4.55%\n\n \n\n \n\n—\n\n \n\n \n\nN.A\n\n$3,500, 4.95%, due February 2031(3)\n\n \n\nFebruary 2026\n\n \n\n \n\n3,500\n\n \n\n \n\n5.08%\n\n \n\n \n\n—\n\n \n\n \n\nN.A\n\n$3,250, 2.875%, due March 2031\n\n \n\nMarch 2021\n\n \n\n \n\n3,250\n\n \n\n \n\n2.92%\n\n \n\n \n\n3,250\n\n \n\n \n\n2.92%\n\n$1,250, 5.25%, due February 2032\n\n \n\nFebruary 2025\n\n \n\n \n\n1,250\n\n \n\n \n\n5.36%\n\n \n\n \n\n1,250\n\n \n\n \n\n5.36%\n\n$3,000, 4.80%, due September 2032(3)\n\n \n\nSeptember 2025\n\n \n\n \n\n3,000\n\n \n\n \n\n4.87%\n\n \n\n \n\n—\n\n \n\n \n\nN.A\n\n$2,250, 6.25%, due November 2032\n\n \n\nNovember 2022\n\n \n\n \n\n2,250\n\n \n\n \n\n6.32%\n\n \n\n \n\n2,250\n\n \n\n \n\n6.32%\n\n$1,500, 4.90%, due February 2033\n\n \n\nFebruary 2023\n\n \n\n \n\n1,500\n\n \n\n \n\n4.95%\n\n \n\n \n\n1,500\n\n \n\n \n\n4.95%\n\n$3,000, 5.35%, due May 2033(3)\n\n \n\nFebruary 2026\n\n \n\n \n\n3,000\n\n \n\n \n\n5.42%\n\n \n\n \n\n—\n\n \n\n \n\nN.A\n\n$1,750, 4.30%, due July 2034\n\n \n\nJuly 2014\n\n \n\n \n\n1,750\n\n \n\n \n\n4.30%\n\n \n\n \n\n1,750\n\n \n\n \n\n4.30%\n\n$1,750, 4.70%, due September 2034\n\n \n\nSeptember 2024\n\n \n\n \n\n1,750\n\n \n\n \n\n4.77%\n\n \n\n \n\n1,750\n\n \n\n \n\n4.77%\n\n$1,250, 3.90%, due May 2035\n\n \n\nMay 2015\n\n \n\n \n\n1,250\n\n \n\n \n\n4.00%\n\n \n\n \n\n1,250\n\n \n\n \n\n4.00%\n\n$1,750, 5.50%, due August 2035\n\n \n\nFebruary 2025\n\n \n\n \n\n1,750\n\n \n\n \n\n5.55%\n\n \n\n \n\n1,750\n\n \n\n \n\n5.55%\n\n$4,000, 5.20%, due September 2035(3)\n\n \n\nSeptember 2025\n\n \n\n \n\n4,000\n\n \n\n \n\n5.25%\n\n \n\n \n\n—\n\n \n\n \n\nN.A\n\n$5,000, 5.70%, due February 2036(3)\n\n \n\nFebruary 2026\n\n \n\n \n\n5,000\n\n \n\n \n\n5.78%\n\n \n\n \n\n—\n\n \n\n \n\nN.A\n\n$1,250, 3.85%, due July 2036\n\n \n\nJuly 2016\n\n \n\n \n\n1,250\n\n \n\n \n\n3.89%\n\n \n\n \n\n1,250\n\n \n\n \n\n3.89%\n\n$1,750, 3.80%, due November 2037\n\n \n\nNovember 2017\n\n \n\n \n\n1,750\n\n \n\n \n\n3.86%\n\n \n\n \n\n1,750\n\n \n\n \n\n3.86%\n\n$1,250, 6.50%, due April 2038\n\n \n\nApril 2008\n\n \n\n \n\n1,250\n\n \n\n \n\n6.51%\n\n \n\n \n\n1,250\n\n \n\n \n\n6.51%\n\n$1,250, 6.125%, due July 2039\n\n \n\nJuly 2009\n\n \n\n \n\n1,250\n\n \n\n \n\n6.17%\n\n \n\n \n\n1,250\n\n \n\n \n\n6.17%\n\n$3,000, 3.60%, due April 2040\n\n \n\nApril 2020\n\n \n\n \n\n3,000\n\n \n\n \n\n3.64%\n\n \n\n \n\n3,000\n\n \n\n \n\n3.64%\n\n$2,250, 5.375%, due July 2040\n\n \n\nJuly 2010\n\n \n\n \n\n2,250\n\n \n\n \n\n5.45%\n\n \n\n \n\n2,250\n\n \n\n \n\n5.45%\n\n$2,250, 3.65%, due March 2041\n\n \n\nMarch 2021\n\n \n\n \n\n2,250\n\n \n\n \n\n3.72%\n\n \n\n \n\n2,250\n\n \n\n \n\n3.72%\n\n$1,000, 4.50%, due July 2044\n\n \n\nJuly 2014\n\n \n\n \n\n1,000\n\n \n\n \n\n4.50%\n\n \n\n \n\n1,000\n\n \n\n \n\n4.50%\n\n$2,000, 4.125%, due May 2045\n\n \n\nMay 2015\n\n \n\n \n\n2,000\n\n \n\n \n\n4.20%\n\n \n\n \n\n2,000\n\n \n\n \n\n4.20%\n\n$2,500, 5.875%, due September 2045(3)\n\n \n\nSeptember 2025\n\n \n\n \n\n2,500\n\n \n\n \n\n5.91%\n\n \n\n \n\n—\n\n \n\n \n\nN.A\n\n$2,250, 6.55%, due February 2046(3)\n\n \n\nFebruary 2026\n\n \n\n \n\n2,250\n\n \n\n \n\n6.59%\n\n \n\n \n\n—\n\n \n\n \n\nN.A\n\n$3,000, 4.00%, due July 2046\n\n \n\nJuly 2016\n\n \n\n \n\n3,000\n\n \n\n \n\n4.03%\n\n \n\n \n\n3,000\n\n \n\n \n\n4.03%\n\n$2,250, 4.00%, due November 2047\n\n \n\nNovember 2017\n\n \n\n \n\n2,250\n\n \n\n \n\n4.05%\n\n \n\n \n\n2,250\n\n \n\n \n\n4.05%\n\n$4,500, 3.60%, due April 2050\n\n \n\nApril 2020\n\n \n\n \n\n4,500\n\n \n\n \n\n3.64%\n\n \n\n \n\n4,500\n\n \n\n \n\n3.64%\n\n$3,250, 3.95%, due March 2051\n\n \n\nMarch 2021\n\n \n\n \n\n3,250\n\n \n\n \n\n3.98%\n\n \n\n \n\n3,250\n\n \n\n \n\n3.98%\n\n$2,500, 6.90%, due November 2052\n\n \n\nNovember 2022\n\n \n\n \n\n2,500\n\n \n\n \n\n6.94%\n\n \n\n \n\n2,500\n\n \n\n \n\n6.94%\n\n$2,250, 5.55%, due February 2053\n\n \n\nFebruary 2023\n\n \n\n \n\n2,250\n\n \n\n \n\n5.62%\n\n \n\n \n\n2,250\n\n \n\n \n\n5.62%\n\n$1,750, 5.375%, due September 2054\n\n \n\nSeptember 2024\n\n \n\n \n\n1,750\n\n \n\n \n\n5.43%\n\n \n\n \n\n1,750\n\n \n\n \n\n5.43%\n\n$1,250, 4.375%, due May 2055\n\n \n\nMay 2015\n\n \n\n \n\n1,250\n\n \n\n \n\n4.44%\n\n \n\n \n\n1,250\n\n \n\n \n\n4.44%\n\n$1,750, 6.00%, due August 2055\n\n \n\nFebruary 2025\n\n \n\n \n\n1,750\n\n \n\n \n\n6.04%\n\n \n\n \n\n1,750\n\n \n\n \n\n6.04%\n\n$3,500, 5.95%, due September 2055(3)\n\n \n\nSeptember 2025\n\n \n\n \n\n3,500\n\n \n\n \n\n6.05%\n\n \n\n \n\n—\n\n \n\n \n\nN.A\n\n$5,000, 6.70%, due February 2056(3)\n\n \n\nFebruary 2026\n\n \n\n \n\n5,000\n\n \n\n \n\n6.74%\n\n \n\n \n\n—\n\n \n\n \n\nN.A\n\n$3,500, 3.85%, due April 2060\n\n \n\nApril 2020\n\n \n\n \n\n3,500\n\n \n\n \n\n3.89%\n\n \n\n \n\n3,500\n\n \n\n \n\n3.89%\n\n$1,500, 4.10%, due March 2061\n\n \n\nMarch 2021\n\n \n\n \n\n1,500\n\n \n\n \n\n4.13%\n\n \n\n \n\n1,500\n\n \n\n \n\n4.13%\n\n83\n\n[Table of Contents](#toc_page)\n\n \n\n \n\n \n\n \n\n \n\n \n\nMay 31,\n\n \n\n \n\n \n\n \n\n2026\n\n \n\n2025\n\n(Amounts in millions)\n\n \n\nDate of\nIssuance\n\n \n\nAmount\n\n \n\n \n\nEffective\nInterest\nRate\n\n \n\nAmount\n\n \n\n \n\nEffective\nInterest\nRate\n\n$1,250, 5.50%, due September 2064\n\n \n\nSeptember 2024\n\n \n\n \n\n1,250\n\n \n\n \n\n5.55%\n\n \n\n \n\n1,250\n\n \n\n \n\n5.55%\n\n$1,000, 6.125%, due August 2065\n\n \n\nFebruary 2025\n\n \n\n \n\n1,000\n\n \n\n \n\n6.17%\n\n \n\n \n\n1,000\n\n \n\n \n\n6.17%\n\n$2,000, 6.10%, due September 2065(3)\n\n \n\nSeptember 2025\n\n \n\n \n\n2,000\n\n \n\n \n\n6.17%\n\n \n\n \n\n—\n\n \n\n \n\nN.A\n\n$2,750, 6.85%, due February 2066(3)\n\n \n\nFebruary 2026\n\n \n\n \n\n2,750\n\n \n\n \n\n6.89%\n\n \n\n \n\n—\n\n \n\n \n\nN.A\n\nFloating-rate senior notes:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n$500, Compounded SOFR plus 0.76%, due August 2028\n\n \n\nFebruary 2025\n\n \n\n \n\n500\n\n \n\n \n\n4.43%\n\n \n\n \n\n500\n\n \n\n \n\n5.28%\n\n$500, Compounded SOFR plus 1.11%, due February 2029(3)\n\n \n\nFebruary 2026\n\n \n\n \n\n500\n\n \n\n \n\n4.78%\n\n \n\n \n\n—\n\n \n\n \n\nN.A\n\nTerm loan credit agreements:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n$5,630, SOFR plus 1.35%, due August 2027(2)\n\n \n\nJune 2024\n\n \n\n \n\n5,137\n\n \n\n \n\n5.29%\n\n \n\n \n\n5,419\n\n \n\n \n\n6.10%\n\nCommercial paper notes\n\n \n\n \n\n \n\n \n\n1,468\n\n \n\n \n\n4.35%\n\n \n\n \n\n2,294\n\n \n\n \n\n4.88%\n\nOther borrowings due August 2025\n\n \n\nNovember 2016\n\n \n\n \n\n—\n\n \n\n \n\nN.A\n\n \n\n \n\n113\n\n \n\n \n\n3.53%\n\nTotal senior notes and other borrowings\n\n \n\n \n\n \n\n$\n\n130,105\n\n \n\n \n\n \n\n \n\n$\n\n92,917\n\n \n\n \n\n \n\nUnamortized discount/issuance costs\n\n \n\n \n\n \n\n \n\n(564\n\n)\n\n \n\n \n\n \n\n \n\n(348\n\n)\n\n \n\n \n\nHedge accounting fair value adjustments(1)\n\n \n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n \n\n \n\n(1\n\n)\n\n \n\n \n\nTotal notes payable and other borrowings\n\n \n\n \n\n \n\n$\n\n129,541\n\n \n\n \n\n \n\n \n\n$\n\n92,568\n\n \n\n \n\n \n\nNotes payable and other borrowings, current\n\n \n\n \n\n \n\n$\n\n7,199\n\n \n\n \n\n \n\n \n\n$\n\n7,271\n\n \n\n \n\n \n\nNotes payable and other borrowings, non-current\n\n \n\n \n\n \n\n$\n\n122,342\n\n \n\n \n\n \n\n \n\n$\n\n85,297\n\n \n\n \n\n \n\n \n\n(1)\nIn fiscal 2018 we entered into certain cross-currency interest rate swap agreements that have the economic effect of converting our fixed-rate, Euro-denominated debt, including annual interest payments and the payment of principal at maturity, to a variable-rate, U.S. Dollar-denominated debt of $871 million based on LIBOR. The effective interest rates as of May 31, 2025 after consideration of the cross-currency interest rate swap agreements were 7.77% for the July 2025 Notes. Refer to Note 1 for a description of our accounting for fair value hedges. The July 2025 Notes were repaid in full upon maturity in July 2025.\n\n(2)\nIn fiscal 2023, we entered into certain interest rate swap agreements that have the economic effect of converting our $4.7 billion of floating-rate borrowings pursuant to the Term Loan Credit Agreement (defined below) until its repayment and subsequently, borrowings under the Term Loan Credit Agreement 2 (defined below) for the same amount to fixed-rate borrowings with a fixed annual interest rate of 3.07%, plus a margin depending on the credit rating assigned to our long-term senior unsecured debt, as further discussed below. The effective interest rates after consideration of the interest rate swap agreements were 4.74% for each of fiscal 2026 and 2025, for borrowings under the Term Loan Credit Agreement 2 (defined below). Refer to Note 1 for a description of our accounting for cash flow hedges.\n\n(3)\nIn fiscal 2026, we issued $43.0 billion of senior notes for general corporate purposes, which may include capital expenditures, repayment of indebtedness, future investments or acquisitions and payment of cash dividends on or repurchases of our common stock.\n\nFuture principal payments for all of our borrowings at May 31, 2026 were as follows (in millions):\n\n \n\nFiscal 2027\n\n \n\n$\n\n7,210\n\n \n\nFiscal 2028\n\n \n\n \n\n10,145\n\n \n\nFiscal 2029\n\n \n\n \n\n5,500\n\n \n\nFiscal 2030\n\n \n\n \n\n7,250\n\n \n\nFiscal 2031\n\n \n\n \n\n9,750\n\n \n\nThereafter\n\n \n\n \n\n90,250\n\n \n\nTotal\n\n \n\n$\n\n130,105\n\n \n\nSenior Notes\n\nInterest is payable semi-annually for the senior notes listed in the above table, except for the floating-rate senior notes for which interest is payable quarterly. We may redeem some or all of the fixed-rate senior notes of each series prior to their maturity, subject to certain restrictions, and the payment of an applicable make-whole premium in certain instances except for the floating-rate senior notes, which may not be redeemed prior to their maturity.\n\nThe senior notes rank pari passu with all existing and future notes issued pursuant to our commercial paper program (see additional discussion regarding our commercial paper program below) and all existing and future unsecured senior indebtedness of Oracle Corporation, including the Revolving Credit Agreement and the Term Loan Credit Agreement 2, each as defined and described further below. All existing and future liabilities of the subsidiaries of Oracle Corporation are or will be effectively senior to the senior notes and Commercial Paper Notes (defined below),\n\n84\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nborrowings under the Term Loan Credit Agreement 2 (defined below) and any future borrowings pursuant to the Revolving Credit Agreement. We were in compliance with all debt-related covenants at May 31, 2026.\n\nRevolving Credit Agreement\n\nOn March 6, 2026, we terminated our existing $6.0 billion, five-year revolving credit agreement among us, as borrower, Bank of America, N.A., as administrative agent, and the lenders and other agents named therein, which was originally scheduled to terminate on March 8, 2027. On March 6, 2026, we entered into a new $10.0 billion, five-year revolving credit agreement (the Revolving Credit Agreement) among us, as borrower, Bank of America, N.A., as administrative agent, and the lenders and other agents named therein, which provides for an unsecured $10.0 billion, five-year revolving credit facility (the Revolving Facility) to us for working capital purposes and for other general corporate purposes.\n\nSubject to certain conditions stated in the Revolving Credit Agreement, we may borrow, prepay and reborrow amounts under the Revolving Facility during the term of the Revolving Credit Agreement. All amounts borrowed under the Revolving Credit Agreement will become due on March 6, 2031, unless the commitments are terminated earlier either at our request or, if an event of default occurs, by the lenders (or automatically in the case of certain bankruptcy-related events). Interest is based on either (a) a Term Secured Overnight Financing Rate (SOFR)-based formula plus a margin of 87.5 basis points to 150.0 basis points, depending on the credit rating assigned to our long-term senior unsecured debt, or (b) a Base Rate formula plus a margin of 0.0 basis point to 50.0 basis points, depending on the same such credit rating, each as set forth in the Revolving Credit Agreement. As of May 31, 2026, we did not have any outstanding borrowings under the Revolving Credit Agreement.\n\nThe Revolving Credit Agreement contains certain customary representations and warranties, covenants and events of default, including the requirement that the ratio of “Consolidated EBITDA” to “Consolidated Net Interest Expense” (each term as defined in the Revolving Credit Agreement) of Oracle and its subsidiaries shall not be less than 3.0 to 1.0 at the end of any fiscal quarter during the period that the Revolving Credit Agreement is effective. If an event of default occurs under the Revolving Credit Agreement and is not cured within applicable grace periods or waived, any unpaid amounts under the Revolving Credit Agreement may be declared immediately due and payable and the commitments under the agreement may be terminated.\n\nTerm Loan Credit Agreements\n\nDuring fiscal 2023, pursuant to a term loan credit agreement (Term Loan Credit Agreement) providing for an aggregate term loan commitment of $5.6 billion, we borrowed $4.7 billion under term loan 1 facility (Term Loan 1 Facility) and $960 million under term loan 2 facility (Term Loan 2 Facility and, together with the Term Loan 1 Facility, the Term Loan Facilities).\n\nDuring fiscal 2025, we terminated our Term Loan Credit Agreement and repaid the principal amount outstanding together with interest accrued up to the date of repayment. Simultaneously, we borrowed up to the maximum commitment amount of $5.6 billion pursuant to a term loan credit agreement (Term Loan Credit Agreement 2) executed on the same date. The critical terms of the Term Loan Credit Agreement 2 are similar to the critical terms of the Term Loan Credit Agreement, except for terms related to the interest, the consolidation of two term loan facilities under Term Loan Credit Agreement into a single facility under the Term Loan Credit Agreement 2 and the options to extend the Term Loan Credit Agreement 2. Interest is based on either (a) a Term SOFR-based formula plus a margin of 112.5 basis points to 162.5 basis points, depending on the credit rating assigned to our long-term senior unsecured debt, or (b) a Base Rate formula plus a margin of 12.5 basis points to 62.5 basis points, depending on the same such credit rating, each as set forth in the Term Loan Credit Agreement 2.\n\nThe Term Loan Credit Agreement 2 provides for repayment of borrowing as follows:\n\n•\nan amount equal to the amount borrowed reduced by any prepayments multiplied by 1.25% on September 30, 2024 and quarterly thereafter until June 30, 2026;\n\n•\nan amount equal to the amount borrowed reduced by any prepayments multiplied by 2.50% on September 30, 2026 and quarterly thereafter until June 30, 2027; and\n\n85\n\n[Table of Contents](#toc_page)\n\n \n\n \n\n•\nany remaining unpaid principal balance under the Term Loan Credit Agreement 2 will become fully due and payable on August 16, 2027 (subject to any extension of the Term Loan Credit Agreement 2 termination date, as set out below), unless the outstanding loans are prepaid earlier at the request of Oracle or accelerated by the lenders if an event of default occurs.\n\nThe termination date of the Term Loan Credit Agreement 2 may be extended at our sole option by up to 2 years. The termination date of the Term Loan Credit Agreement 2 may also be further extended at each lender’s option by up to 2 years.\n\nCommercial Paper Program and Commercial Paper Notes\n\nOn March 6, 2026, our commercial paper program was increased to $10.0 billion. Our commercial paper program allows us to issue and sell unsecured short-term promissory notes (Commercial Paper Notes) pursuant to a private placement exemption from the registration requirements under federal and state securities laws pursuant to dealer agreements with various banks and an Issuing and Paying Agency Agreement with Deutsche Bank Trust Company Americas.\n\nThere were $1.5 billion and $2.3 billion of outstanding Commercial Paper Notes as of May 31, 2026 and 2025, respectively. We used the net proceeds from the issuance of commercial paper for general corporate purposes.\n\n7.\nRESTRUCTURING AND OTHER EXPENSES\n\nRestructuring and other expenses line item on our consolidated statement of operations consist of restructuring expenses for employee severance costs, contract termination costs and certain other exit costs to improve our cost structure prospectively. The restructuring expenses resulted from the execution of management-approved restructuring plans that were developed for certain strategic initiatives and/or to improve operational efficiencies, as further described below; and other operating expenses, net.\n\n \n\n \n\n \n\nYear Ended May 31,\n\n \n\n(in millions)\n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nRestructuring\n\n \n\n$\n\n1,779\n\n \n\n \n\n$\n\n299\n\n \n\n \n\n$\n\n404\n\n \n\nOther, net\n\n \n\n \n\n59\n\n \n\n \n\n \n\n75\n\n \n\n \n\n \n\n314\n\n \n\nTotal restructuring and other expenses\n\n \n\n$\n\n1,838\n\n \n\n \n\n$\n\n374\n\n \n\n \n\n$\n\n718\n\n \n\nFiscal 2026 Oracle Restructuring Plan\n\nDuring fiscal 2026, our management approved, committed to, initiated and further supplemented plans to restructure to implement certain strategic measures and further improve operational efficiencies, including through the adoption and integration of AI technologies across certain functions and other operational activities (2026 Restructuring Plan). The total estimated restructuring costs associated with the 2026 Restructuring Plan are up to $2.1 billion and will be recorded to the restructuring and other expense line item within our consolidated statements of operations through the end of the plan. We recorded $1.8 billion of restructuring expenses in connection with the 2026 Restructuring Plan in fiscal 2026. Any changes to the estimates of executing the 2026 Restructuring Plan will be reflected in our future results of operations.\n\nFiscal 2024 Oracle Restructuring Plan\n\nDuring fiscal 2024, our management approved, committed to and initiated plans to restructure and further improve efficiencies in our operations due to our acquisitions and certain other operational activities (2024 Restructuring Plan). In fiscal 2025, our management supplemented the 2024 Restructuring Plan to reflect additional actions that we expected to take. Restructuring costs associated with the 2024 Restructuring Plan were recorded to the restructuring and other expense line item within our consolidated statements of operations. We recorded $314 million and $432 million of restructuring expenses in connection with the 2024 Restructuring Plan in fiscal 2025 and 2024, respectively. Actions pursuant to the 2024 Restructuring Plan were substantially complete as of May 31, 2025.\n\n86\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nSummary of All Plans\n\nFiscal 2026 Activity\n\n \n\n \n\n \n\nAccrued\n\n \n\n \n\nYear Ended May 31, 2026\n\n \n\n \n\nAccrued\n\n \n\n \n\nTotal\nCosts\n\n \n\n \n\nTotal\nExpected\n\n \n\n(in millions)\n\n \n\nMay 31,\n2025(2)\n\n \n\n \n\nInitial\nCosts(3)\n\n \n\n \n\nAdj. to\nCost(4)\n\n \n\n \n\nCash\nPayments\n\n \n\n \n\nOthers(5)\n\n \n\n \n\nMay 31,\n2026(2)\n\n \n\n \n\nAccrued\nto Date\n\n \n\n \n\nProgram\nCosts\n\n \n\nFiscal 2026 Oracle Restructuring Plan(1)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCloud and software\n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n601\n\n \n\n \n\n$\n\n58\n\n \n\n \n\n$\n\n(439\n\n)\n\n \n\n$\n\n(1\n\n)\n\n \n\n$\n\n219\n\n \n\n \n\n$\n\n659\n\n \n\n \n\n$\n\n786\n\n \n\nHardware\n\n \n\n \n\n—\n\n \n\n \n\n \n\n75\n\n \n\n \n\n \n\n3\n\n \n\n \n\n \n\n(49\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n29\n\n \n\n \n\n \n\n78\n\n \n\n \n\n \n\n83\n\n \n\nServices\n\n \n\n \n\n—\n\n \n\n \n\n \n\n290\n\n \n\n \n\n \n\n17\n\n \n\n \n\n \n\n(157\n\n)\n\n \n\n \n\n(1\n\n)\n\n \n\n \n\n149\n\n \n\n \n\n \n\n307\n\n \n\n \n\n \n\n399\n\n \n\nOther\n\n \n\n \n\n—\n\n \n\n \n\n \n\n674\n\n \n\n \n\n \n\n86\n\n \n\n \n\n \n\n(591\n\n)\n\n \n\n \n\n1\n\n \n\n \n\n \n\n170\n\n \n\n \n\n \n\n760\n\n \n\n \n\n \n\n835\n\n \n\nTotal Fiscal 2026 Oracle Restructuring Plan\n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n1,640\n\n \n\n \n\n$\n\n164\n\n \n\n \n\n$\n\n(1,236\n\n)\n\n \n\n$\n\n(1\n\n)\n\n \n\n$\n\n567\n\n \n\n \n\n$\n\n1,804\n\n \n\n \n\n$\n\n2,103\n\n \n\nTotal other restructuring plans(6)\n\n \n\n$\n\n212\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n(25\n\n)\n\n \n\n$\n\n(105\n\n)\n\n \n\n$\n\n4\n\n \n\n \n\n$\n\n86\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nTotal restructuring plans\n\n \n\n$\n\n212\n\n \n\n \n\n$\n\n1,640\n\n \n\n \n\n$\n\n139\n\n \n\n \n\n$\n\n(1,341\n\n)\n\n \n\n$\n\n3\n\n \n\n \n\n$\n\n653\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nFiscal 2025 Activity\n\n \n\n \n\n \n\nAccrued\n\n \n\n \n\nYear Ended May 31, 2025\n\n \n\n \n\nAccrued\n\n \n\n(in millions)\n\n \n\nMay 31,\n2024\n\n \n\n \n\nInitial\nCosts(3)\n\n \n\n \n\nAdj. to\nCost(4)\n\n \n\n \n\nCash\nPayments\n\n \n\n \n\nOthers(5)\n\n \n\n \n\nMay 31,\n2025(2)\n\n \n\nFiscal 2024 Oracle Restructuring Plan(1)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCloud and software\n\n \n\n$\n\n87\n\n \n\n \n\n$\n\n115\n\n \n\n \n\n$\n\n(6\n\n)\n\n \n\n$\n\n(118\n\n)\n\n \n\n$\n\n1\n\n \n\n \n\n$\n\n79\n\n \n\nHardware\n\n \n\n \n\n4\n\n \n\n \n\n \n\n17\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(11\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n10\n\n \n\nServices\n\n \n\n \n\n12\n\n \n\n \n\n \n\n37\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(28\n\n)\n\n \n\n \n\n1\n\n \n\n \n\n \n\n22\n\n \n\nOther\n\n \n\n \n\n49\n\n \n\n \n\n \n\n153\n\n \n\n \n\n \n\n(2\n\n)\n\n \n\n \n\n(142\n\n)\n\n \n\n \n\n2\n\n \n\n \n\n \n\n60\n\n \n\nTotal Fiscal 2024 Oracle Restructuring Plan\n\n \n\n$\n\n152\n\n \n\n \n\n$\n\n322\n\n \n\n \n\n$\n\n(8\n\n)\n\n \n\n$\n\n(299\n\n)\n\n \n\n$\n\n4\n\n \n\n \n\n$\n\n171\n\n \n\nTotal other restructuring plans(6)\n\n \n\n$\n\n84\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n(15\n\n)\n\n \n\n$\n\n(29\n\n)\n\n \n\n$\n\n1\n\n \n\n \n\n$\n\n41\n\n \n\nTotal restructuring plans\n\n \n\n$\n\n236\n\n \n\n \n\n$\n\n322\n\n \n\n \n\n$\n\n(23\n\n)\n\n \n\n$\n\n(328\n\n)\n\n \n\n$\n\n5\n\n \n\n \n\n$\n\n212\n\n \n\n \n\nFiscal 2024 Activity\n\n \n\n \n\n \n\nAccrued\n\n \n\n \n\nYear Ended May 31, 2024\n\n \n\n \n\nAccrued\n\n \n\n(in millions)\n\n \n\nMay 31,\n2023\n\n \n\n \n\nInitial\nCosts(3)\n\n \n\n \n\nAdj. to\nCost(4)\n\n \n\n \n\nCash\nPayments\n\n \n\n \n\nOthers(5)\n\n \n\n \n\nMay 31,\n2024\n\n \n\nFiscal 2024 Oracle Restructuring Plan(1)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCloud and software\n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n204\n\n \n\n \n\n$\n\n(9\n\n)\n\n \n\n$\n\n(108\n\n)\n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n87\n\n \n\nHardware\n\n \n\n \n\n—\n\n \n\n \n\n \n\n9\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(5\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n4\n\n \n\nServices\n\n \n\n \n\n—\n\n \n\n \n\n \n\n46\n\n \n\n \n\n \n\n(1\n\n)\n\n \n\n \n\n(33\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n12\n\n \n\nOther\n\n \n\n \n\n—\n\n \n\n \n\n \n\n188\n\n \n\n \n\n \n\n(5\n\n)\n\n \n\n \n\n(134\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n49\n\n \n\nTotal Fiscal 2024 Oracle Restructuring Plan\n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n447\n\n \n\n \n\n$\n\n(15\n\n)\n\n \n\n$\n\n(280\n\n)\n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n152\n\n \n\nTotal other restructuring plans(6)\n\n \n\n$\n\n199\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n(28\n\n)\n\n \n\n$\n\n(89\n\n)\n\n \n\n$\n\n2\n\n \n\n \n\n$\n\n84\n\n \n\nTotal restructuring plans\n\n \n\n$\n\n199\n\n \n\n \n\n$\n\n447\n\n \n\n \n\n$\n\n(43\n\n)\n\n \n\n$\n\n(369\n\n)\n\n \n\n$\n\n2\n\n \n\n \n\n$\n\n236\n\n \n\n \n\n(1)\nRestructuring costs recorded to each of the operating segments presented primarily related to employee severance costs. Other restructuring costs represented employee severance costs not related to our operating segments and certain other restructuring plan costs.\n\n87\n\n[Table of Contents](#toc_page)\n\n \n\n \n\n(2)\nAs of May 31, 2026, $581 million and $72 million were recorded in other current liabilities and other non-current liabilities, respectively, within our consolidated balance sheets. As of May 31, 2025, substantially all restructuring liabilities have been recorded in other current liabilities within our consolidated balance sheets.\n\n(3)\nCosts recorded for the respective restructuring plans during the period presented.\n\n(4)\nAll plan adjustments were changes in estimates whereby increases and decreases in costs were generally recorded to operating expenses in the period of adjustments.\n\n(5)\nRepresents foreign currency translation and certain other non-cash adjustments.\n\n(6)\nOther restructuring plans presented in the tables above included condensed information for other Oracle based plans and other plans associated with certain of our acquisitions whereby we continued to make cash outlays to settle obligations under these plans during the periods presented but for which the periodic impact to our consolidated statements of operations was not significant.\n\n8.\nDEFERRED REVENUES\n\nDeferred revenues consisted of the following:\n\n \n\n \n\nMay 31,\n\n \n\n(in millions)\n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\nCloud\n\n \n\n$\n\n3,228\n\n \n\n \n\n$\n\n2,959\n\n \n\nSoftware\n\n \n\n \n\n5,662\n\n \n\n \n\n \n\n5,350\n\n \n\nHardware\n\n \n\n \n\n521\n\n \n\n \n\n \n\n614\n\n \n\nServices\n\n \n\n \n\n505\n\n \n\n \n\n \n\n464\n\n \n\nDeferred revenues, current\n\n \n\n \n\n9,916\n\n \n\n \n\n \n\n9,387\n\n \n\nDeferred revenues, non-current (in other non-current liabilities)\n\n \n\n \n\n5,479\n\n \n\n \n\n \n\n1,346\n\n \n\nTotal deferred revenues\n\n \n\n$\n\n15,395\n\n \n\n \n\n$\n\n10,733\n\n \n\n \n\nDeferred cloud revenues, deferred software revenues and deferred hardware revenues substantially represent customer payments made in advance for cloud or support contracts that are billed in advance with corresponding revenues generally being recognized ratably or based upon customer usage over the respective contractual periods. Deferred services revenues include prepayments for our services business and revenues for these services are generally recognized as the services are performed.\n\n9.\nLEASES, OTHER COMMITMENTS AND CERTAIN CONTINGENCIES\n\nLeases\n\nWe have operating and finance leases that primarily relate to our data centers and real estate facilities. As of May 31, 2026, our leases substantially have remaining terms of one year to seventeen years, some of which include options to extend and/or terminate the leases.\n\nThe components of lease expense were as follows:\n\n \n\n \n\nYear Ended May 31,\n\n \n\n(in millions)\n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nOperating lease cost\n\n \n\n$\n\n2,794\n\n \n\n \n\n$\n\n1,716\n\n \n\n \n\n$\n\n1,159\n\n \n\nFinance lease cost:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nAmortization of ROU assets\n\n \n\n$\n\n351\n\n \n\n \n\n$\n\n48\n\n \n\n \n\n$\n\n—\n\n \n\nInterest on lease liabilities\n\n \n\n \n\n279\n\n \n\n \n\n \n\n38\n\n \n\n \n\n \n\n—\n\n \n\nTotal finance lease cost\n\n \n\n$\n\n630\n\n \n\n \n\n$\n\n86\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n88\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nSupplemental balance sheet information related to leases was as follows:\n\n \n\n \n\nAs of May 31,\n\n \n\n(Dollars in millions)\n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\nOperating leases:\n\n \n\n \n\n \n\n \n\n \n\n \n\nOperating lease ROU assets\n\n \n\n$\n\n29,690\n\n \n\n \n\n$\n\n13,145\n\n \n\nOperating lease liabilities:\n\n \n\n \n\n \n\n \n\n \n\n \n\nOperating lease liabilities, current\n\n \n\n$\n\n3,542\n\n \n\n \n\n$\n\n1,914\n\n \n\nOperating lease liabilities, non-current\n\n \n\n \n\n26,648\n\n \n\n \n\n \n\n11,536\n\n \n\nTotal operating lease liabilities\n\n \n\n$\n\n30,190\n\n \n\n \n\n$\n\n13,450\n\n \n\nWeighted average remaining lease term\n\n \n\n12 years\n\n \n\n \n\n10 years\n\n \n\nWeighted average discount rate\n\n \n\n5.7%\n\n \n\n \n\n5.3%\n\n \n\nFinance leases:\n\n \n\n \n\n \n\n \n\n \n\n \n\nFinance lease ROU assets\n\n \n\n$\n\n7,464\n\n \n\n \n\n$\n\n2,874\n\n \n\nFinance lease liabilities:\n\n \n\n \n\n \n\n \n\n \n\n \n\nFinance lease liabilities, current\n\n \n\n$\n\n620\n\n \n\n \n\n$\n\n257\n\n \n\nFinance lease liabilities, non-current\n\n \n\n \n\n7,081\n\n \n\n \n\n \n\n2,677\n\n \n\nTotal finance lease liabilities\n\n \n\n$\n\n7,701\n\n \n\n \n\n$\n\n2,934\n\n \n\nWeighted average remaining lease term\n\n \n\n14 years\n\n \n\n \n\n15 years\n\n \n\nWeighted average discount rate\n\n \n\n5.7%\n\n \n\n \n\n5.5%\n\n \n\nSupplemental cash flow information related to leases was as follows:\n\n \n\n \n\nYear Ended May 31,\n\n \n\n(in millions)\n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nCash paid for amounts included in the measurement of lease liabilities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nOperating leases\n\n \n\n$\n\n2,548\n\n \n\n \n\n$\n\n1,685\n\n \n\n \n\n$\n\n1,168\n\n \n\nFinance leases\n\n \n\n$\n\n452\n\n \n\n \n\n$\n\n27\n\n \n\n \n\n$\n\n—\n\n \n\nROU assets obtained in exchange for lease obligations:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nOperating leases\n\n \n\n$\n\n18,246\n\n \n\n \n\n$\n\n6,970\n\n \n\n \n\n$\n\n4,246\n\n \n\nFinance leases\n\n \n\n$\n\n4,946\n\n \n\n \n\n$\n\n2,921\n\n \n\n \n\n$\n\n—\n\n \n\nMaturities of lease liabilities were as follows as of May 31, 2026 (in millions):\n\n \n\n \n\n \n\nOperating\nLeases\n\n \n\n \n\nFinance\nLeases\n\n \n\nFiscal 2027\n\n \n\n$\n\n3,712\n\n \n\n \n\n$\n\n656\n\n \n\nFiscal 2028\n\n \n\n \n\n3,603\n\n \n\n \n\n \n\n676\n\n \n\nFiscal 2029\n\n \n\n \n\n3,550\n\n \n\n \n\n \n\n697\n\n \n\nFiscal 2030\n\n \n\n \n\n3,550\n\n \n\n \n\n \n\n718\n\n \n\nFiscal 2031\n\n \n\n \n\n3,519\n\n \n\n \n\n \n\n740\n\n \n\nThereafter\n\n \n\n \n\n23,933\n\n \n\n \n\n \n\n7,973\n\n \n\nTotal lease payments\n\n \n\n \n\n41,867\n\n \n\n \n\n \n\n11,460\n\n \n\nLess: imputed interest\n\n \n\n \n\n(11,677\n\n)\n\n \n\n \n\n(3,759\n\n)\n\nTotal lease liability\n\n \n\n$\n\n30,190\n\n \n\n \n\n$\n\n7,701\n\n \n\n \n\n89\n\n[Table of Contents](#toc_page)\n\n \n\n \n\n29\n\nAs of May 31, 2026, we had $260 billion of additional lease commitments, substantially all related to data center arrangements, that are generally expected to commence between the first quarter of fiscal 2027 and fiscal 2029 and for terms of fifteen to nineteen years that were not reflected on our consolidated balance sheet as of May 31, 2026 or in the maturities table above. These additional lease commitments include a lease for which we have guaranteed up to $3.3 billion of the lessor’s borrowing, which matures in September 2026.\n\nUnconditional Obligations\n\nIn the ordinary course of business, we enter into certain unconditional purchase obligations with our suppliers. These are agreements that are enforceable and legally binding and specify terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the payment.\n\nAs of May 31, 2026, our unconditional purchase and certain other obligations, which were primarily related to data center power arrangements, were as follows (in millions):\n\n \n\nFiscal 2027\n\n \n\n$\n\n1,841\n\n \n\nFiscal 2028\n\n \n\n \n\n1,034\n\n \n\nFiscal 2029\n\n \n\n \n\n1,053\n\n \n\nFiscal 2030\n\n \n\n \n\n952\n\n \n\nFiscal 2031\n\n \n\n \n\n896\n\n \n\nThereafter\n\n \n\n \n\n7,533\n\n \n\nTotal\n\n \n\n$\n\n13,309\n\n \n\n \n\nAs described in Note 6 above, as of May 31, 2026 we have senior notes and other borrowings that mature at various future dates and derivative financial instruments outstanding that we leverage to manage certain risks and exposures.\n\nSubsequent to May 31, 2026, we entered into an additional $19 billion of unconditional purchase commitments for cloud infrastructure assets that commence in fiscal 2027 and have a term of five years.\n\nGuarantees\n\nOur cloud, software and hardware sales agreements generally include certain provisions for indemnifying customers against liabilities if our products infringe a third party’s intellectual property rights. To date, we have not incurred any material costs as a result of such indemnifications and have not accrued any material liabilities related to such obligations in our consolidated financial statements. Certain of our sales agreements also include provisions indemnifying customers against liabilities in the event we breach confidentiality or service level requirements. It is not possible to determine the maximum potential amount under these indemnification agreements due to our limited and infrequent history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement.\n\n10.\nSTOCKHOLDERS’ EQUITY\n\nMandatory Convertible Preferred Stock\n\nOn February 5, 2026, we issued 100,000,000 depositary shares, representing 50,000 shares of our 6.50% Series D Mandatory Convertible Preferred Stock (Mandatory Convertible Preferred Stock). The Mandatory Convertible Preferred Stock has a $100,000 per share liquidation preference and $0.01 per share par value. The proceeds from the issuance of Mandatory Convertible Preferred Stock will be used for general corporate purposes, which may include capital expenditures, repayment of indebtedness, future investments or acquisitions and payment of cash dividends on or repurchases of our common stock.\n\nDividends are cumulative at an annual rate of 6.50% on the liquidation preference of $100,000 per share of Mandatory Convertible Preferred Stock and may be paid in cash, shares of our common stock or a combination of cash and shares of our common stock. Dividends that are declared will be payable on January 15, April 15, July 15\n\n90\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nand October 15 to holders of record on January 1, April 1, July 1 and October 1 immediately preceding the relevant dividend payment date.\n\nUnless earlier converted, each outstanding share of Mandatory Convertible Preferred Stock will automatically convert on the mandatory conversion date, which is January 15, 2029, into between 499.8126 and 624.7657 shares of our common stock, depending on the applicable market value of our common stock upon conversion and subject to certain anti-dilution adjustments. The applicable market value of our common stock will be determined based on the volume-weighted average price per share of the common stock over the 20 consecutive trading day period beginning on, and including, the 21st scheduled trading day immediately prior to January 15, 2029.\n\nIf a fundamental change occurs on or prior to January 15, 2029, then holders of Mandatory Convertible Preferred Stock will be entitled to convert all or any portion of their shares into shares of our common stock. In that case, the Mandatory Convertible Preferred Stock will convert at the fundamental change conversion rate for a specified period of time and holders will receive a make-whole dividend amount to compensate them for any unpaid accumulated dividends and any remaining future scheduled dividend payments.\n\nOther than during a fundamental change conversion period, at any time prior to January 15, 2029, holders of Mandatory Convertible Preferred Stock may elect to convert all or any portion of their shares at a conversion rate of 499.8126 shares of common stock per share of Mandatory Convertible Preferred Stock, subject to certain anti-dilution and other adjustments.\n\nThe Mandatory Convertible Preferred Stock will not be redeemable at our election before the mandatory conversion date. The holders of the Mandatory Convertible Preferred Stock will not have any voting rights, with limited exceptions.\n\nCommon Stock\n\nOn February 2, 2026, we entered into an equity distribution agreement with ‎certain sales agents party thereto, pursuant to which we may sell shares of our common stock having aggregate sales proceeds of up to $20 billion from time to time through an “at-the-market” offering program (the ATM Program).\n\nSubject to the terms and conditions of the agreement, we may sell shares of common stock through the sales agents listed in the agreement in amounts and at times to be determined by us. In addition, we may elect to sell, through the sales agents or through others (whether acting as agent or principal), shares of our common stock for forward settlement. We are not obligated to sell any of the shares of our common stock under the ATM Program. The proceeds from offerings under the ATM Program, if any, will be used for general corporate purposes, which may include capital expenditures, repayment of indebtedness, future investments or acquisitions and payment of cash dividends on or repurchases of our common stock. As of May 31, 2026, we have not sold any shares of our common stock under the ATM Program.\n\nCommon Stock Repurchases\n\nOur Board of Directors (the Board) has approved a program for us to repurchase shares of our common stock. As of May 31, 2026, approximately $6.3 billion remained available for stock repurchases pursuant to our stock repurchase program. We repurchased 0.4 million shares for $93 million, 3.9 million shares for $600 million and 10.6 million shares for $1.2 billion in fiscal 2026, 2025 and 2024, respectively, under the stock repurchase program.\n\nOur stock repurchase authorization does not have an expiration date and the pace of any future repurchase activity will depend on factors such as our working capital needs, our cash requirements for capital expenditures, acquisitions and dividend payments, our debt repayment obligations or repurchases of our debt, our stock price and economic and market conditions. Our stock repurchases may be effected from time to time through open market purchases or pursuant to a Rule 10b5-1 trading plan. Our stock repurchase program may be accelerated, suspended, delayed or discontinued at any time.\n\n91\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nDividends on Preferred and Common Stock\n\nDuring fiscal 2026, the Board declared cash dividends of $1,263.89 per share of our outstanding Mandatory Convertible Preferred Stock which we paid during the same period. During fiscal 2026, 2025 and 2024, the Board declared cash dividends of $2.00, $1.70 and $1.60 per share of our outstanding common stock, respectively, which we paid during the same period.\n\nIn June 2026, the Board declared a quarterly cash dividend of $1,625 per share of our outstanding Mandatory Convertible Preferred Stock and $0.50 per share of our outstanding common stock. The Mandatory Convertible Preferred Stock dividend is payable on July 15, 2026 to stockholders of record as of the close of business on July 1, 2026 and the common stock dividend is payable on July 24, 2026 to stockholders of record as of the close of business on July 10, 2026. Future declarations of dividends on Oracle securities and the establishment of future record and payment dates for our common stock are subject to the final determination of the Board.\n\nAccumulated Other Comprehensive Loss\n\nThe following table summarizes, as of each balance sheet date, the components of our AOCL, net of income taxes:\n\n \n\n \n\n \n\nMay 31,\n\n \n\n(in millions)\n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\nForeign currency translation losses\n\n \n\n$\n\n(1,566\n\n)\n\n \n\n$\n\n(1,334\n\n)\n\nUnrealized gains on defined benefit plans, net\n\n \n\n \n\n150\n\n \n\n \n\n \n\n105\n\n \n\nUnrealized gains on cash flow hedges, net\n\n \n\n \n\n36\n\n \n\n \n\n \n\n54\n\n \n\nTotal accumulated other comprehensive loss\n\n \n\n$\n\n(1,380\n\n)\n\n \n\n$\n\n(1,175\n\n)\n\n \n\n11.\nEMPLOYEE BENEFIT PLANS\n\nStock-Based Compensation Plans\n\nStock Plans\n\nIn fiscal 2021, we adopted the 2020 Equity Incentive Plan, which provides for the issuance of long-term performance awards, including restricted stock-based awards, non-qualified stock options and incentive stock options, as well as stock purchase rights and stock appreciation rights, to our eligible employees, officers and directors who are also employees or consultants, independent consultants and advisers. In fiscal 2022 and 2024, our stockholders, upon the recommendation of the Board, approved the adoption of the Amended and Restated 2020 Equity Incentive Plan (as amended and restated, the 2020 Plan), which increased the number of authorized shares of stock that may be issued under the 2020 Plan by 300 million shares and 350 million shares, respectively. Approximately 348 million shares of common stock were available for future awards under the 2020 Plan as of May 31, 2026. Under the 2020 Plan, for each share granted as a full value award in the form of an RSU, an equivalent of 2.5 shares is deducted from our pool of shares available for grant.\n\nAs of May 31, 2026, the 2020 Plan had 77 million unvested restricted stock units (RSUs) outstanding, 3 million PSOs outstanding of which 1 million shares were vested and service-based stock options (SOs) to purchase 17 million shares of common stock outstanding of which 4 million shares were vested. To date, we have not issued any stock purchase rights or stock appreciation rights under the 2020 Plan.\n\nThe vesting schedule for all awards granted under the 2020 Plan is established by the Compensation Committee of the Board (the Compensation Committee). RSUs generally require service-based vesting over four years. The SOs were granted with an exercise price not less than the closing share price of our common stock on the grant date, generally become exercisable over four years of service, and generally expire ten years from the date of grant. The PSOs were granted with an exercise price not less than the closing share price of our common stock on the grant date and expire ten years from the date of grant.\n\nThe 1993 Directors’ Stock Plan (the Directors’ Plan) provides for the issuance of RSUs and other stock-based awards, including non-qualified SOs, to non-employee directors. The Directors’ Plan has been amended and restated from time to time. Under the terms of the Directors’ Plan, 10 million shares of common stock are reserved for issuance\n\n92\n\n[Table of Contents](#toc_page)\n\n \n\n \n\n(including a fiscal 2013 amendment to increase the number of shares of our common stock reserved for issuance by 2 million shares). Currently, we only grant RSUs that vest fully on the one-year anniversary of the date of grant. In fiscal 2016, the Directors’ Plan was amended to permit the Compensation Committee to determine the amount and form of automatic grants of stock awards, if any, to each non-employee director upon first becoming a director and thereafter on an annual basis, as well as automatic grants for chairing certain Board committees, subject to certain stockholder approved limitations set forth in the Directors’ Plan. In fiscal 2020, the Compensation Committee reduced the maximum value of the annual automatic RSU grants to each non-employee director to $350,000 and eliminated all equity grants for chairing Board committees. As of May 31, 2026, approximately 13,000 unvested RSUs were outstanding under the Directors’ Plan. As of May 31, 2026, approximately 1 million shares were available for future stock awards under this plan.\n\nThe following table summarizes restricted stock-based award activity granted pursuant to Oracle-based stock plans for our last three fiscal years ended May 31, 2026:\n\n \n\n \n\nRestricted Stock-Based Awards Outstanding\n\n \n\n(in millions, except fair value)\n\n \n\nNumber of\nShares\n\n \n\n \n\nWeighted-Average\nGrant Date Fair Value\n\n \n\nBalance, May 31, 2023\n\n \n\n \n\n152\n\n \n\n \n\n$\n\n69.09\n\n \n\nGranted\n\n \n\n \n\n47\n\n \n\n \n\n$\n\n110.26\n\n \n\nVested and issued\n\n \n\n \n\n(53\n\n)\n\n \n\n$\n\n66.97\n\n \n\nCanceled\n\n \n\n \n\n(8\n\n)\n\n \n\n$\n\n77.52\n\n \n\nBalance, May 31, 2024\n\n \n\n \n\n138\n\n \n\n \n\n$\n\n83.43\n\n \n\nGranted\n\n \n\n \n\n38\n\n \n\n \n\n$\n\n159.11\n\n \n\nVested and issued\n\n \n\n \n\n(52\n\n)\n\n \n\n$\n\n78.30\n\n \n\nCanceled\n\n \n\n \n\n(7\n\n)\n\n \n\n$\n\n99.44\n\n \n\nBalance, May 31, 2025\n\n \n\n \n\n117\n\n \n\n \n\n$\n\n108.91\n\n \n\nGranted\n\n \n\n \n\n23\n\n \n\n \n\n$\n\n243.23\n\n \n\nVested and issued\n\n \n\n \n\n(47\n\n)\n\n \n\n$\n\n98.06\n\n \n\nCanceled\n\n \n\n \n\n(12\n\n)\n\n \n\n$\n\n132.82\n\n \n\nBalance, May 31, 2026\n\n \n\n \n\n81\n\n \n\n \n\n$\n\n149.88\n\n \n\n \n\nThe total grant date fair values of restricted stock-based awards that were vested and issued in fiscal 2026, 2025 and 2024 were $4.7 billion, $4.0 billion and $3.5 billion, respectively. As of May 31, 2026, total unrecognized stock-based compensation expense related to non-vested restricted stock-based awards was $8.9 billion and is expected to be recognized over the remaining weighted-average vesting period of 2.72 years.\n\nThe following table summarizes stock option activity, including SOs and PSOs, and includes awards granted pursuant to the 2020 Plan and stock plans assumed from our acquisitions for our last three fiscal years ended May 31, 2026:\n\n \n\n \n\nOptions Outstanding\n\n \n\n(in millions, except exercise price)\n\n \n\nShares Under\nStock Option\n\n \n\n \n\nWeighted-Average\nExercise Price\n\n \n\nBalance, May 31, 2023\n\n \n\n \n\n64\n\n \n\n \n\n$\n\n45.42\n\n \n\nGranted and assumed\n\n \n\n \n\n2\n\n \n\n \n\n$\n\n113.91\n\n \n\nExercised\n\n \n\n \n\n(15\n\n)\n\n \n\n$\n\n34.84\n\n \n\nBalance, May 31, 2024\n\n \n\n \n\n51\n\n \n\n \n\n$\n\n51.05\n\n \n\nGranted\n\n \n\n \n\n—\n\n \n\n \n\n$\n\n—\n\n \n\nExercised\n\n \n\n \n\n(10\n\n)\n\n \n\n$\n\n44.84\n\n \n\nBalance, May 31, 2025\n\n \n\n \n\n41\n\n \n\n \n\n$\n\n52.58\n\n \n\nGranted\n\n \n\n \n\n15\n\n \n\n \n\n$\n\n279.53\n\n \n\nExercised\n\n \n\n \n\n(25\n\n)\n\n \n\n$\n\n50.04\n\n \n\nCanceled\n\n \n\n \n\n(10\n\n)\n\n \n\n$\n\n60.51\n\n \n\nBalance, May 31, 2026\n\n \n\n \n\n21\n\n \n\n \n\n$\n\n217.63\n\n \n\n \n\n93\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nStock options outstanding that have vested and that are expected to vest as of May 31, 2026 were as follows:\n\n \n\n \n\nOutstanding\nStock Options\n(in millions)\n\n \n\n \n\nWeighted-Average\nExercise Price\n\n \n\n \n\nWeighted-Average\nRemaining Contract Term\n(in years)\n\n \n\n \n\nAggregate\nIntrinsic Value(1) \n(in millions)\n\n \n\nVested\n\n \n\n \n\n5\n\n \n\n \n\n$\n\n49.37\n\n \n\n \n\n \n\n1.64\n\n \n\n \n\n$\n\n789\n\n \n\nExpected to vest(2)\n\n \n\n \n\n15\n\n \n\n \n\n$\n\n275.90\n\n \n\n \n\n \n\n9.35\n\n \n\n \n\n \n\n95\n\n \n\nTotal\n\n \n\n \n\n20\n\n \n\n \n\n$\n\n223.97\n\n \n\n \n\n \n\n7.58\n\n \n\n \n\n$\n\n884\n\n \n\n \n\n(1)\nThe aggregate intrinsic value was calculated based on the gross difference between our closing stock price on the last trading day of fiscal 2026 of $225.78 and the exercise prices for all “in-the-money” options outstanding, excluding tax effects.\n\n(2)\nThe unrecognized compensation expense calculated under the fair value method for shares expected to vest as of May 31, 2026 was $1.8 billion and is expected to be recognized over a weighted-average period of 3.30 years. Approximately 1 million shares outstanding as of May 31, 2026 were not expected to vest.\n\nStock-Based Compensation Expense and Valuations of Stock-Based Awards\n\nWe estimated the fair values of our restricted stock-based awards that are solely subject to service-based vesting requirements based upon their market values as of the grant dates, discounted for the present values of expected dividends.\n\nWe estimated the fair values of our SOs and PSOs using the Black-Scholes-Merton option-pricing model, which was developed for use in estimating the fair values of SOs. Option valuation models, including the Black-Scholes-Merton option-pricing model, require the input of assumptions, including stock price volatility. Changes in the input assumptions can affect the fair value estimates and ultimately how much we recognize as stock-based compensation expense. The fair values of our SOs and PSOs were estimated at the grant dates. The weighted-average input assumptions used and resulting fair values of our SOs and PSOs were as follows for fiscal 2026:\n\n \n\nExpected life (in years)\n\n \n\n \n\n6.7\n\n \n\nRisk-free interest rate\n\n \n\n3.8%\n\n \n\nVolatility\n\n \n\n51%\n\n \n\nDividend yield\n\n \n\n0.7%\n\n \n\nWeighted-average fair value per share\n\n \n\n$\n\n142.64\n\n \n\nThe expected life input is based on historical exercise patterns and post-vesting termination behavior, the risk-free interest rate input is based on U.S. Treasury instruments, the annualized dividend yield input is based on the per share dividend declared by the Board and the volatility input is calculated based on the implied volatility of our publicly traded options.\n\nStock-based compensation expense was included in the following operating expense line items in our consolidated statements of operations:\n\n \n\n \n\nYear Ended May 31,\n\n \n\n(in millions)\n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nCloud and software\n\n \n\n$\n\n622\n\n \n\n \n\n$\n\n609\n\n \n\n \n\n$\n\n525\n\n \n\nHardware\n\n \n\n \n\n27\n\n \n\n \n\n \n\n29\n\n \n\n \n\n \n\n23\n\n \n\nServices\n\n \n\n \n\n210\n\n \n\n \n\n \n\n202\n\n \n\n \n\n \n\n167\n\n \n\nSales and marketing\n\n \n\n \n\n759\n\n \n\n \n\n \n\n757\n\n \n\n \n\n \n\n667\n\n \n\nResearch and development\n\n \n\n \n\n2,805\n\n \n\n \n\n \n\n2,638\n\n \n\n \n\n \n\n2,225\n\n \n\nGeneral and administrative\n\n \n\n \n\n388\n\n \n\n \n\n \n\n439\n\n \n\n \n\n \n\n367\n\n \n\nTotal stock-based compensation\n\n \n\n$\n\n4,811\n\n \n\n \n\n$\n\n4,674\n\n \n\n \n\n$\n\n3,974\n\n \n\nEstimated income tax benefit included in provision for income taxes\n\n \n\n \n\n(1,100\n\n)\n\n \n\n \n\n(1,050\n\n)\n\n \n\n \n\n(913\n\n)\n\nTotal stock-based compensation, net of estimated income tax benefit\n\n \n\n$\n\n3,711\n\n \n\n \n\n$\n\n3,624\n\n \n\n \n\n$\n\n3,061\n\n \n\n \n\n94\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nTax Benefits from Exercises of Stock Options and Vesting of Restricted Stock-Based Awards\n\nTotal cash received as a result of stock option exercises was approximately $1.2 billion, $448 million and $545 million for fiscal 2026, 2025 and 2024, respectively. The total aggregate intrinsic value of restricted stock-based awards that vested and were issued and stock options that were exercised was $17.0 billion, $9.0 billion and $7.4 billion for fiscal 2026, 2025 and 2024. In connection with the vesting and issuance of restricted stock-based awards and stock options that were exercised, the tax benefits realized by us were $4.0 billion, $2.1 billion and $1.7 billion for fiscal 2026, 2025 and 2024, respectively.\n\nEmployee Stock Purchase Plan\n\nWe have an Employee Stock Purchase Plan (Purchase Plan) that allows employees to purchase shares of common stock at a price per share that is 95% of the fair market value of Oracle stock as of the end of the semi-annual option period. As of May 31, 2026, 33 million shares were reserved for future issuances under the Purchase Plan. We issued approximately 1 million shares in each of fiscal 2026 and 2025 and 2 million shares in fiscal 2024 under the Purchase Plan.\n\nDefined Contribution and Other Postretirement Plans\n\nWe offer various defined contribution plans for our U.S. and non-U.S. employees. Total defined contribution plan expense was $478 million, $485 million and $468 million for fiscal 2026, 2025 and 2024, respectively. In the U.S., regular employees can participate in the Oracle Corporation 401(k) Savings and Investment Plan (Oracle 401(k) Plan). Participants can generally contribute up to 40% of their eligible compensation on a per-pay-period basis as defined by the Oracle 401(k) Plan document or by the section 402(g) limit as defined by the U.S. Internal Revenue Service (IRS). We match a portion of employee contributions, currently 50% up to 6% of compensation each pay period, subject to maximum aggregate matching amounts. Our contributions to the Oracle 401(k) Plan, net of forfeitures, were $194 million, $206 million and $200 million in fiscal 2026, 2025 and 2024, respectively.\n\nWe also offer non-qualified deferred compensation plans to certain employees whereby they may defer a portion of their annual base and/or variable compensation until retirement or a date specified by the employee in accordance with the plans. Deferred compensation plan assets and liabilities were each approximately $1.4 billion and approximately $1.1 billion as of May 31, 2026 and 2025, respectively, and were presented in other non-current assets and other non-current liabilities in the accompanying consolidated balance sheets.\n\nWe sponsor certain defined benefit pension plans that are offered primarily by certain of our foreign subsidiaries. Many of these plans were assumed through our acquisitions or are required by local regulatory requirements. We may deposit funds for these plans with insurance companies, third-party trustees, or into government-managed accounts consistent with local regulatory requirements, as applicable. Our total defined benefit plan pension expenses were $73 million, $69 million and $71 million for fiscal 2026, 2025 and 2024, respectively. The aggregate projected benefit obligation and aggregate net liability (funded status, which is substantially included in other non-current liabilities in our consolidated balance sheets) of our defined benefit plans as of May 31, 2026 were $1.1 billion and $256 million, respectively, and as of May 31, 2025 were $1.1 billion and $350 million, respectively.\n\n95\n\n[Table of Contents](#toc_page)\n\n \n\n \n\n12.\nINCOME TAXES\n\nOur effective tax rates for each of the periods presented are the result of the mix of income earned and losses incurred in various tax jurisdictions that apply a broad range of income tax rates. Our provision for income taxes varied from the tax computed at the U.S. federal statutory income tax rate for fiscal 2026, 2025 and 2024 primarily due to earnings in foreign operations, state taxes, the U.S. research and development tax credit, settlements with tax authorities, the tax effects of stock-based compensation, the Foreign Derived Intangible Income deduction and the tax effect of Global Intangible Low-Taxed Income (GILTI).\n\nThe following is a geographical breakdown of income before income taxes:\n\n \n\n \n\n \n\nYear Ended May 31,\n\n \n\n(in millions)\n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nDomestic\n\n \n\n$\n\n8,693\n\n \n\n \n\n$\n\n4,376\n\n \n\n \n\n$\n\n3,023\n\n \n\nForeign\n\n \n\n \n\n10,861\n\n \n\n \n\n \n\n9,784\n\n \n\n \n\n \n\n8,718\n\n \n\nIncome before income taxes\n\n \n\n$\n\n19,554\n\n \n\n \n\n$\n\n14,160\n\n \n\n \n\n$\n\n11,741\n\n \n\n \n\nThe provision for income taxes consisted of the following:\n\n \n\n \n\n \n\nYear Ended May 31,\n\n \n\n(Dollars in millions)\n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nCurrent provision:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nFederal\n\n \n\n$\n\n1,072\n\n \n\n \n\n$\n\n1,172\n\n \n\n \n\n$\n\n999\n\n \n\nState\n\n \n\n \n\n307\n\n \n\n \n\n \n\n196\n\n \n\n \n\n \n\n420\n\n \n\nForeign\n\n \n\n \n\n2,005\n\n \n\n \n\n \n\n1,986\n\n \n\n \n\n \n\n1,994\n\n \n\nTotal current provision\n\n \n\n$\n\n3,384\n\n \n\n \n\n$\n\n3,354\n\n \n\n \n\n$\n\n3,413\n\n \n\nDeferred benefit:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nFederal\n\n \n\n$\n\n(1,783\n\n)\n\n \n\n$\n\n(2,208\n\n)\n\n \n\n$\n\n(2,020\n\n)\n\nState\n\n \n\n \n\n(152\n\n)\n\n \n\n \n\n(202\n\n)\n\n \n\n \n\n(280\n\n)\n\nForeign\n\n \n\n \n\n1,018\n\n \n\n \n\n \n\n773\n\n \n\n \n\n \n\n161\n\n \n\nTotal deferred benefit\n\n \n\n$\n\n(917\n\n)\n\n \n\n$\n\n(1,637\n\n)\n\n \n\n$\n\n(2,139\n\n)\n\nTotal provision for income taxes\n\n \n\n$\n\n2,467\n\n \n\n \n\n$\n\n1,717\n\n \n\n \n\n$\n\n1,274\n\n \n\nEffective income tax rate\n\n \n\n12.6%\n\n \n\n \n\n12.1%\n\n \n\n \n\n10.9%\n\n \n\n \n\n96\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nIn fiscal year ended May 31, 2026, we adopted ASU 2023-09 prospectively. The following table reconciles the provision for income taxes to the amount computed by applying the statutory U.S. federal income tax rate to income before income taxes for the year ended May 31, 2026:\n\n \n\n(Dollars in millions)\n\n \n\nAmount\n\n \n\n \n\nPercent\n\nU.S. federal statutory income tax rate\n\n \n\n$\n\n4,106\n\n \n\n \n\n21.0%\n\nForeign tax effects\n\n \n\n \n\n(77\n\n)\n\n \n\n-0.4%\n\nSwitzerland\n\n \n\n \n\n \n\n \n\n \n\nStatutory tax rate difference between Switzerland and U.S.\n\n \n\n \n\n(377\n\n)\n\n \n\n-1.9%\n\nOther\n\n \n\n \n\n21\n\n \n\n \n\n0.1%\n\nMalta\n\n \n\n \n\n \n\n \n\n \n\nStatutory tax rate difference between Malta and U.S.\n\n \n\n \n\n255\n\n \n\n \n\n1.3%\n\nEquity allowance\n\n \n\n \n\n(546\n\n)\n\n \n\n-2.8%\n\nOther\n\n \n\n \n\n(78\n\n)\n\n \n\n-0.4%\n\nBermuda\n\n \n\n \n\n \n\n \n\n \n\nStatutory tax rate difference between Bermuda and U.S.\n\n \n\n \n\n(105\n\n)\n\n \n\n-0.5%\n\nIncome exclusion\n\n \n\n \n\n(263\n\n)\n\n \n\n-1.4%\n\nOther foreign jurisdictions\n\n \n\n \n\n1,016\n\n \n\n \n\n5.2%\n\nEffect of changes in tax laws or rates enacted in the current period(1)\n\n \n\n \n\n933\n\n \n\n \n\n4.8%\n\nTax credits\n\n \n\n \n\n(1,587\n\n)\n\n \n\n-8.1%\n\nFederal research and development credit\n\n \n\n \n\n(621\n\n)\n\n \n\n-3.2%\n\nForeign tax credits\n\n \n\n \n\n(965\n\n)\n\n \n\n-4.9%\n\nOther\n\n \n\n \n\n(1\n\n)\n\n \n\n0.0%\n\nNontaxable or nondeductible items\n\n \n\n \n\n(1,970\n\n)\n\n \n\n-10.1%\n\nStock-based compensation\n\n \n\n \n\n(2,062\n\n)\n\n \n\n-10.6%\n\nOther\n\n \n\n \n\n92\n\n \n\n \n\n0.5%\n\nChanges in unrecognized tax benefits\n\n \n\n \n\n847\n\n \n\n \n\n4.3%\n\nOther adjustments(2)\n\n \n\n \n\n215\n\n \n\n \n\n1.1%\n\nEffective income tax rate\n\n \n\n$\n\n2,467\n\n \n\n \n\n12.6%\n\n(1)\nPrimarily related to the tax effects of enactment of the U.S. One, Big, Beautiful Bill Act.\n\n(2)\nIncludes the tax effects of changes in valuation allowances, effect of cross-border tax laws and state taxes, net of federal benefit. California, Virginia and Missouri represent the majority of the state taxes net of federal benefit.\n\nThe following table reconciles the provision for income taxes to the amount computed by applying the statutory U.S. federal income tax rate to income before income taxes for the year ended May 31, 2025 and 2024:\n\n \n\n \n\n \n\nYear Ended May 31,\n\n \n\n(Dollars in millions)\n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nU.S. federal statutory income tax rate\n\n \n\n21.0%\n\n \n\n \n\n21.0%\n\n \n\nTax provision at statutory rate\n\n \n\n$\n\n2,974\n\n \n\n \n\n$\n\n2,466\n\n \n\nForeign earnings at other than U.S. rates\n\n \n\n \n\n(381\n\n)\n\n \n\n \n\n(262\n\n)\n\nState tax expense, net of federal benefit\n\n \n\n \n\n128\n\n \n\n \n\n \n\n81\n\n \n\nSettlements and releases from judicial decisions and statute expirations, net\n\n \n\n \n\n(149\n\n)\n\n \n\n \n\n(124\n\n)\n\nTax contingency interest accrual, net\n\n \n\n \n\n322\n\n \n\n \n\n \n\n157\n\n \n\nDomestic tax contingency, net\n\n \n\n \n\n75\n\n \n\n \n\n \n\n131\n\n \n\nFederal research and development credit\n\n \n\n \n\n(411\n\n)\n\n \n\n \n\n(372\n\n)\n\nStock-based compensation\n\n \n\n \n\n(801\n\n)\n\n \n\n \n\n(624\n\n)\n\nRealization of a one-time tax attribute\n\n \n\n \n\n—\n\n \n\n \n\n \n\n(235\n\n)\n\nOther, net\n\n \n\n \n\n(40\n\n)\n\n \n\n \n\n56\n\n \n\nTotal provision for income taxes\n\n \n\n$\n\n1,717\n\n \n\n \n\n$\n\n1,274\n\n \n\n \n\n97\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nCash paid for income taxes, net of refunds received, by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 for the year ended May 31, 2026 was as follows (in millions):\n\n \n\nFederal\n\n \n\n$\n\n2,460\n\n \n\nState(1)\n\n \n\n \n\n249\n\n \n\nForeign\n\n \n\n \n\n \n\nKorea\n\n \n\n \n\n(262\n\n)\n\nJapan\n\n \n\n \n\n203\n\n \n\nIndia\n\n \n\n \n\n193\n\n \n\nOther\n\n \n\n \n\n861\n\n \n\nTotal cash paid for income taxes, net of refunds received\n\n \n\n$\n\n3,704\n\n \n\n(1)\nNo individual state accounted for more than 5%.\n\nThe components of our deferred tax assets and liabilities were as follows:\n\n \n\n \n\n \n\nMay 31,\n\n \n\n(in millions)\n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\nDeferred tax assets:\n\n \n\n \n\n \n\n \n\n \n\n \n\nAccruals and allowances\n\n \n\n$\n\n1,195\n\n \n\n \n\n$\n\n790\n\n \n\nEmployee compensation and benefits\n\n \n\n \n\n1,006\n\n \n\n \n\n \n\n1,068\n\n \n\nDifferences in timing of revenue recognition\n\n \n\n \n\n970\n\n \n\n \n\n \n\n894\n\n \n\nLease liabilities\n\n \n\n \n\n9,333\n\n \n\n \n\n \n\n3,279\n\n \n\nBasis of property, plant and equipment and intangible assets\n\n \n\n \n\n6,882\n\n \n\n \n\n \n\n7,800\n\n \n\nCapitalized research and development\n\n \n\n \n\n5,784\n\n \n\n \n\n \n\n4,153\n\n \n\nTax credit and net operating loss carryforwards\n\n \n\n \n\n6,602\n\n \n\n \n\n \n\n5,857\n\n \n\nTotal deferred tax assets\n\n \n\n \n\n31,772\n\n \n\n \n\n \n\n23,841\n\n \n\nValuation allowance\n\n \n\n \n\n(2,483\n\n)\n\n \n\n \n\n(1,962\n\n)\n\nTotal deferred tax assets, net\n\n \n\n \n\n29,289\n\n \n\n \n\n \n\n21,879\n\n \n\nDeferred tax liabilities:\n\n \n\n \n\n \n\n \n\n \n\n \n\nAcquired intangible assets\n\n \n\n \n\n(544\n\n)\n\n \n\n \n\n(920\n\n)\n\nGILTI deferred\n\n \n\n \n\n(6,852\n\n)\n\n \n\n \n\n(6,949\n\n)\n\nROU assets\n\n \n\n \n\n(9,181\n\n)\n\n \n\n \n\n(3,207\n\n)\n\nWithholding taxes on foreign earnings\n\n \n\n \n\n(424\n\n)\n\n \n\n \n\n(364\n\n)\n\nOther\n\n \n\n \n\n(1,069\n\n)\n\n \n\n \n\n(191\n\n)\n\nTotal deferred tax liabilities\n\n \n\n \n\n(18,070\n\n)\n\n \n\n \n\n(11,631\n\n)\n\nNet deferred tax assets\n\n \n\n$\n\n11,219\n\n \n\n \n\n$\n\n10,248\n\n \n\nRecorded as:\n\n \n\n \n\n \n\n \n\n \n\n \n\nNon-current deferred tax assets\n\n \n\n$\n\n11,541\n\n \n\n \n\n$\n\n11,877\n\n \n\nNon-current deferred tax liabilities\n\n \n\n \n\n(322\n\n)\n\n \n\n \n\n(1,629\n\n)\n\nNet deferred tax assets\n\n \n\n$\n\n11,219\n\n \n\n \n\n$\n\n10,248\n\n \n\n \n\nAt May 31, 2026, we had an estimated deferred tax liability of approximately $2.0 billion for which U.S. income taxes have not been provided on undistributed earnings and other outside basis differences of investments in foreign subsidiaries.\n\nOur net deferred tax assets were $11.2 billion and $10.2 billion as of May 31, 2026 and 2025, respectively. We believe that it is more likely than not that the net deferred tax assets will be realized in the foreseeable future. Realization of our net deferred tax assets is dependent upon our generation of sufficient taxable income in future years in appropriate tax jurisdictions to obtain benefit from the reversal of temporary differences, net operating loss carryforwards and tax credit carryforwards. The amount of net deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income change.\n\n98\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nThe valuation allowance was $2.5 billion and $2.0 billion as of May 31, 2026 and 2025, respectively, primarily related to U.S., state and foreign tax credits and net operating loss carryforwards. Any subsequent reduction of the valuation allowance will be recorded to our provision for income taxes unless the conclusion of an acquisition valuation allowance and the recognition of the associated tax benefits is within the measurement period (as defined above).\n\nAt May 31, 2026, we had federal net operating loss carryforwards of approximately $374 million, which are subject to limitation on their utilization. Approximately $140 million of these federal net operating losses expire in various years between fiscal 2027 and fiscal 2038. Approximately $234 million of these federal net operating losses are not currently subject to expiration dates. We had state net operating loss carryforwards of approximately $2.7 billion at May 31, 2026, which are subject to limitations on their utilization. Approximately $2.4 billion of these state net operating losses expire in various years between fiscal 2027 and fiscal 2046. Approximately $275 million of these state net operating losses are not currently subject to expiration dates. We had total foreign net operating loss carryforwards of approximately $2.0 billion at May 31, 2026, which are subject to limitations on their utilization. Approximately $1.9 billion of these foreign net operating losses are not currently subject to expiration dates. The remainder of the foreign net operating losses, approximately $79 million, expire between fiscal 2027 and fiscal 2046. We had foreign capital loss carryforwards of approximately $260 million, which are not currently subject to expiration dates. We had tax credit carryforwards of approximately $1.5 billion at May 31, 2026, which are subject to limitations on their utilization. Approximately $939 million of these tax credit carryforwards are not currently subject to expiration dates. The remainder of the tax credit carryforwards, approximately $518 million, expire in various years between fiscal 2027 and fiscal 2046.\n\nCurrent income taxes payable are included in other current liabilities in our consolidated balance sheets and totaled $583 million and $2.3 billion as of May 31, 2026 and 2025, respectively.\n\nWe classify our unrecognized tax benefits as either current or non-current income taxes payable in the accompanying consolidated balance sheets. The aggregate changes in the balance of our gross unrecognized tax benefits, including acquisitions, were as follows:\n\n \n\n \n\n \n\nYear Ended May 31,\n\n \n\n(in millions)\n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nGross unrecognized tax benefits as of June 1\n\n \n\n$\n\n9,438\n\n \n\n \n\n$\n\n8,785\n\n \n\n \n\n$\n\n7,715\n\n \n\nIncreases related to tax positions from prior fiscal years\n\n \n\n \n\n192\n\n \n\n \n\n \n\n239\n\n \n\n \n\n \n\n492\n\n \n\nDecreases related to tax positions from prior fiscal years\n\n \n\n \n\n(70\n\n)\n\n \n\n \n\n(98\n\n)\n\n \n\n \n\n(128\n\n)\n\nIncreases related to tax positions taken during current fiscal year\n\n \n\n \n\n931\n\n \n\n \n\n \n\n846\n\n \n\n \n\n \n\n889\n\n \n\nSettlements with tax authorities\n\n \n\n \n\n(171\n\n)\n\n \n\n \n\n(161\n\n)\n\n \n\n \n\n(46\n\n)\n\nLapses of statutes of limitation\n\n \n\n \n\n(216\n\n)\n\n \n\n \n\n(162\n\n)\n\n \n\n \n\n(129\n\n)\n\nCumulative translation adjustments and other, net\n\n \n\n \n\n22\n\n \n\n \n\n \n\n(11\n\n)\n\n \n\n \n\n(8\n\n)\n\nTotal gross unrecognized tax benefits as of May 31\n\n \n\n$\n\n10,126\n\n \n\n \n\n$\n\n9,438\n\n \n\n \n\n$\n\n8,785\n\n \n\n \n\nAs of May 31, 2026, 2025 and 2024, $4.9 billion, $4.5 billion and $4.2 billion, respectively, of unrecognized tax benefits would affect our effective tax rate if recognized. We recognized interest and penalties related to uncertain tax positions in our provision for income taxes line of our consolidated statements of operations of $594 million, $321 million and $199 million during fiscal 2026, 2025 and 2024, respectively. Interest and penalties accrued as of May 31, 2026 and 2025 were $2.7 billion and $2.1 billion, respectively.\n\nDomestically, U.S. federal and state taxing authorities are currently examining income tax returns of Oracle and various acquired entities for years through fiscal 2024. Many issues are at an advanced stage in the examination process, the most significant of which include issues related to transfer pricing, domestic production activity, one-time transition tax, foreign tax credits and research and development credits. Our U.S. federal income tax returns have been examined for all years prior to fiscal 2013 and, with some exceptions, we are no longer subject to audit for those periods. Our U.S. state income tax returns, with some exceptions, have been examined for all years prior to fiscal 2010, and we are no longer subject to audit for those periods.\n\nInternationally, tax authorities for numerous non-U.S. jurisdictions are also examining or have examined returns of Oracle and various acquired entities for years through fiscal 2024. Many of the relevant tax years are at an advanced stage in examination or subsequent controversy resolution processes, the most significant of which include issues\n\n99\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nrelated to transfer pricing and withholding tax. With some exceptions, we are generally no longer subject to tax examinations in non-U.S. jurisdictions for years prior to fiscal 2001.\n\nWe are under audit by the IRS and various other domestic and foreign tax authorities with regards to income tax and indirect tax matters and are involved in various challenges and litigation in a number of countries, including, in particular, Australia, Brazil, Canada, Egypt, India, Indonesia, Ireland, Israel, Pakistan, Saudi Arabia, South Korea and Spain, where the amounts under controversy are significant. In some, although not all, cases, we have reserved for potential adjustments to our provision for income taxes and accrual of indirect taxes that may result from examinations by, or any negotiated agreements with, these tax authorities or final outcomes in judicial proceedings and we believe that the final outcome of these examinations, agreements or judicial proceedings will not have a material effect on our results of operations. If events occur which indicate payment of these amounts is unnecessary, the reversal of the liabilities would result in the recognition of benefits in the period we determine the liabilities are no longer necessary. If our estimates of the federal, state and foreign income tax liabilities and indirect tax liabilities are less than the ultimate assessment, it could result in a further charge to expense.\n\nWe believe that we have adequately provided under GAAP for outcomes related to our tax audits. However, there can be no assurances as to the possible outcomes or any related financial statement effect thereof.\n\nPursuant to the U.S. One, Big, Beautiful Bill Act that was signed into law on July 4, 2025, we recorded a net tax expense of $933 million during fiscal 2026, primarily related to the remeasurement of a deferred tax liability previously recorded during fiscal 2021 as part of the partial realignment of our legal entity structure.\n\n13.\nSEGMENT INFORMATION\n\nASC 280, Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision makers (CODMs) are our Chief Executive Officers and Chief Technology Officer. We are organized by line of business and geographically. While our CODMs evaluate results in a number of different ways, the line of business management structure is the primary basis for which the allocation of resources and financial results are assessed.\n\nWe have three businesses—cloud and software (formerly referred to as cloud and license), hardware and services—each of which is comprised of a single operating segment. The tabular information below presents financial information, including information on segment revenues, significant segment expenses categories and amounts on a segment basis and included within each reported measure of a segment’s profit or loss, that is regularly provided to our CODMs for their review and assists our CODMs with evaluating the company’s performance and allocating company resources.\n\nOur cloud and software business engages in the sale, marketing and delivery of our enterprise applications and infrastructure technologies through cloud and on-premise deployment models, including our cloud offerings and our software offerings. Cloud revenues are generated from applications and infrastructure offerings that are typically contracted with customers directly, delivered to customers over time with our revenue recognition occurring over the contractual terms and renewed by customers upon completion of the contractual terms. Our cloud contracts provide customers with access to the latest technological updates as they become available and for which the customer contracted together with related technical support services over the contractual term. Software revenues represent:\n\n(1)\nfees earned from granting customers software licenses, generally on a perpetual basis, to use our database and middleware and our applications software products within cloud and on-premise information technology (IT) environments. We generally recognize revenues at the point in time the software is made available to the customer to download and use, which typically is immediate upon signature of the license contract; and\n\n(2)\nsoftware support revenues, which are typically contracted with customers directly, billed to customers in advance, delivered to customers over time with our revenue recognition occurring over the contractual terms and renewed by customers upon completion of the contractual terms.\n\n100\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nSoftware support contracts provide customers with technical support services and unspecified license upgrades and enhancements during the term of the support period. In each fiscal year, our cloud and software business’ contractual activities, excluding the impact of timing of booking of large contracts, are typically highest in our fourth fiscal quarter, and the related cash flows are typically highest in the following quarter (i.e., in the first fiscal quarter of the next fiscal year) as we receive payments from these contracts. Costs associated with our cloud and software business are largely infrastructure- and personnel-related, including the cost of providing our cloud and software offerings, salaries and commissions earned by our sales force for the sale of our cloud and software offerings and marketing program costs.\n\nOur hardware business provides infrastructure technologies including Oracle Engineered Systems, servers, storage, industry-specific hardware, operating systems, virtualization, management and other hardware-related software to support diverse IT environments. Our hardware business also offers hardware support, which provides customers with software updates for the software components that are essential to the functionality of their hardware products and can also include product repairs, maintenance services and technical support services that are typically delivered and recognized ratably over the contractual term. Costs associated with our hardware business include the cost of hardware products, which consists of expenses for materials and labor used to produce these products by our internal manufacturing operations or by third-party manufacturers; the cost of materials used to repair customer products with eligible support contracts; the cost of labor and infrastructure to provide support services; and sales and marketing expenses, which are largely personnel-related and include variable compensation earned by our sales force for the sales of our hardware offerings.\n\nOur services business provides services to customers and partners to help maximize the performance of their investments in Oracle applications and infrastructure technologies and include our consulting services and customer success services offerings. Costs associated with our services business consist primarily of personnel-related expenses, technology infrastructure expenditures, facilities expenses and external contractor expenses.\n\nWe do not track our assets for each business. Consequently, it is not practical to show assets by operating segment.\n\nThe following table presents summary results for each of our three businesses for each of fiscal 2026, 2025 and 2024:\n\n \n\n \n\n \n\nYear Ended May 31,\n\n \n\n(in millions)\n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nCloud and software:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nRevenues\n\n \n\n$\n\n58,530\n\n \n\n \n\n$\n\n49,230\n\n \n\n \n\n$\n\n44,464\n\n \n\nCloud and software expenses\n\n \n\n \n\n16,850\n\n \n\n \n\n \n\n10,827\n\n \n\n \n\n \n\n8,783\n\n \n\nSales and marketing expenses\n\n \n\n \n\n7,212\n\n \n\n \n\n \n\n7,473\n\n \n\n \n\n \n\n7,167\n\n \n\nMargin(1)\n\n \n\n$\n\n34,468\n\n \n\n \n\n$\n\n30,930\n\n \n\n \n\n$\n\n28,514\n\n \n\nHardware:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nRevenues\n\n \n\n$\n\n3,084\n\n \n\n \n\n$\n\n2,936\n\n \n\n \n\n$\n\n3,066\n\n \n\nHardware expenses\n\n \n\n \n\n832\n\n \n\n \n\n \n\n742\n\n \n\n \n\n \n\n855\n\n \n\nSales and marketing expenses\n\n \n\n \n\n235\n\n \n\n \n\n \n\n276\n\n \n\n \n\n \n\n296\n\n \n\nMargin(1)\n\n \n\n$\n\n2,017\n\n \n\n \n\n$\n\n1,918\n\n \n\n \n\n$\n\n1,915\n\n \n\nServices:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nRevenues\n\n \n\n$\n\n5,743\n\n \n\n \n\n$\n\n5,233\n\n \n\n \n\n$\n\n5,431\n\n \n\nExpenses\n\n \n\n \n\n4,210\n\n \n\n \n\n \n\n4,240\n\n \n\n \n\n \n\n4,515\n\n \n\nMargin(1)\n\n \n\n$\n\n1,533\n\n \n\n \n\n$\n\n993\n\n \n\n \n\n$\n\n916\n\n \n\nTotals:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nRevenues\n\n \n\n$\n\n67,357\n\n \n\n \n\n$\n\n57,399\n\n \n\n \n\n$\n\n52,961\n\n \n\nExpenses\n\n \n\n \n\n29,339\n\n \n\n \n\n \n\n23,558\n\n \n\n \n\n \n\n21,616\n\n \n\nMargin(1)\n\n \n\n$\n\n38,018\n\n \n\n \n\n$\n\n33,841\n\n \n\n \n\n$\n\n31,345\n\n \n\n \n\n(1)\nThe margins reported reflect only the direct controllable costs of each line of business and do not include allocations of research and development, general and administrative and certain other allocable expenses, net. Additionally, the margins reported above do not reflect amortization of intangible assets, restructuring and other expenses, stock-based compensation, interest expense or certain other non-operating income (expenses),\n\n101\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nnet. Refer to the table below for a reconciliation of our total margin for operating segments to our income before income taxes as reported per our consolidated statements of operations.\n\nThe following table reconciles total margin for operating segments to income before income taxes:\n\n \n\n \n\nYear Ended May 31,\n\n \n\n(in millions)\n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nTotal margin for operating segments\n\n \n\n$\n\n38,018\n\n \n\n \n\n$\n\n33,841\n\n \n\n \n\n$\n\n31,345\n\n \n\nResearch and development\n\n \n\n \n\n(10,272\n\n)\n\n \n\n \n\n(9,860\n\n)\n\n \n\n \n\n(8,915\n\n)\n\nGeneral and administrative\n\n \n\n \n\n(1,618\n\n)\n\n \n\n \n\n(1,602\n\n)\n\n \n\n \n\n(1,548\n\n)\n\nAmortization of intangible assets\n\n \n\n \n\n(1,671\n\n)\n\n \n\n \n\n(2,307\n\n)\n\n \n\n \n\n(3,010\n\n)\n\nRestructuring and other\n\n \n\n \n\n(1,838\n\n)\n\n \n\n \n\n(374\n\n)\n\n \n\n \n\n(718\n\n)\n\nStock-based compensation for operating segments\n\n \n\n \n\n(1,618\n\n)\n\n \n\n \n\n(1,597\n\n)\n\n \n\n \n\n(1,382\n\n)\n\nExpense allocations and other, net\n\n \n\n \n\n(395\n\n)\n\n \n\n \n\n(423\n\n)\n\n \n\n \n\n(419\n\n)\n\nInterest expense\n\n \n\n \n\n(4,599\n\n)\n\n \n\n \n\n(3,578\n\n)\n\n \n\n \n\n(3,514\n\n)\n\nNon-operating income (expenses), net\n\n \n\n \n\n3,547\n\n \n\n \n\n \n\n60\n\n \n\n \n\n \n\n(98\n\n)\n\nIncome before income taxes\n\n \n\n$\n\n19,554\n\n \n\n \n\n$\n\n14,160\n\n \n\n \n\n$\n\n11,741\n\n \n\nDisaggregation of Revenues\n\nWe have considered information that is regularly reviewed by our CODMs in evaluating financial performance and disclosures presented outside of our financial statements in our earnings releases and used in investor presentations to disaggregate revenues to depict how the nature, amount, timing and uncertainty of revenues and cash flows are affected by economic factors. The principal category we use to disaggregate revenues is the nature of our products and services as presented in our consolidated statements of operations.\n\nThe following table presents a summary of our total revenues by geographic region, which are generally based on the location of our customers:\n\n \n\n \n\nYear Ended May 31,\n\n \n\n(in millions)\n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nAmericas\n\n \n\n$\n\n44,478\n\n \n\n \n\n$\n\n36,339\n\n \n\n \n\n$\n\n33,122\n\n \n\nEMEA(1)\n\n \n\n \n\n15,297\n\n \n\n \n\n \n\n14,025\n\n \n\n \n\n \n\n13,030\n\n \n\nAsia Pacific\n\n \n\n \n\n7,582\n\n \n\n \n\n \n\n7,035\n\n \n\n \n\n \n\n6,809\n\n \n\nTotal revenues\n\n \n\n$\n\n67,357\n\n \n\n \n\n$\n\n57,399\n\n \n\n \n\n$\n\n52,961\n\n \n\n \n\n(1)\nComprises Europe, the Middle East and Africa\n\nThe following table presents our software revenues by offerings:\n\n \n\n \n\nYear Ended May 31,\n\n \n\n(in millions)\n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nSoftware license\n\n \n\n$\n\n4,737\n\n \n\n \n\n$\n\n5,201\n\n \n\n \n\n$\n\n5,081\n\n \n\nSoftware support\n\n \n\n \n\n19,804\n\n \n\n \n\n \n\n19,523\n\n \n\n \n\n \n\n19,609\n\n \n\nTotal software revenues\n\n \n\n$\n\n24,541\n\n \n\n \n\n$\n\n24,724\n\n \n\n \n\n$\n\n24,690\n\n \n\nThe following table presents our cloud revenues by offerings:\n\n \n\n \n\nYear Ended May 31,\n\n \n\n(in millions)\n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nCloud applications\n\n \n\n$\n\n15,888\n\n \n\n \n\n$\n\n14,272\n\n \n\n \n\n$\n\n12,934\n\n \n\nCloud infrastructure\n\n \n\n \n\n18,101\n\n \n\n \n\n \n\n10,234\n\n \n\n \n\n \n\n6,840\n\n \n\nTotal cloud revenues\n\n \n\n$\n\n33,989\n\n \n\n \n\n$\n\n24,506\n\n \n\n \n\n$\n\n19,774\n\n \n\n \n\n102\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nGeographic Information\n\nDisclosed in the table below is geographic information for each country that comprised greater than three percent of our total revenues for any of fiscal 2026, 2025 or 2024:\n\n \n\n \n\n \n\nAs of and for the Year Ended May 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n(in millions)\n\n \n\nRevenues\n\n \n\n \n\nLong-Lived\nAssets(1)\n\n \n\n \n\nRevenues\n\n \n\n \n\nLong-Lived\nAssets(1)\n\n \n\n \n\nRevenues\n\n \n\n \n\nLong-Lived\nAssets(1)\n\n \n\nU.S.\n\n \n\n$\n\n39,835\n\n \n\n \n\n$\n\n102,717\n\n \n\n \n\n$\n\n32,075\n\n \n\n \n\n$\n\n45,439\n\n \n\n \n\n$\n\n29,055\n\n \n\n \n\n$\n\n24,798\n\n \n\nUnited Kingdom\n\n \n\n \n\n2,816\n\n \n\n \n\n \n\n3,903\n\n \n\n \n\n \n\n2,594\n\n \n\n \n\n \n\n2,530\n\n \n\n \n\n \n\n2,423\n\n \n\n \n\n \n\n1,164\n\n \n\nGermany\n\n \n\n \n\n1,993\n\n \n\n \n\n \n\n2,432\n\n \n\n \n\n \n\n1,817\n\n \n\n \n\n \n\n2,013\n\n \n\n \n\n \n\n1,794\n\n \n\n \n\n \n\n1,192\n\n \n\nJapan\n\n \n\n \n\n1,870\n\n \n\n \n\n \n\n3,183\n\n \n\n \n\n \n\n1,759\n\n \n\n \n\n \n\n2,320\n\n \n\n \n\n \n\n1,662\n\n \n\n \n\n \n\n1,144\n\n \n\nOther countries\n\n \n\n \n\n20,843\n\n \n\n \n\n \n\n21,029\n\n \n\n \n\n \n\n19,154\n\n \n\n \n\n \n\n7,841\n\n \n\n \n\n \n\n18,027\n\n \n\n \n\n \n\n3,962\n\n \n\nTotal\n\n \n\n$\n\n67,357\n\n \n\n \n\n$\n\n133,264\n\n \n\n \n\n$\n\n57,399\n\n \n\n \n\n$\n\n60,143\n\n \n\n \n\n$\n\n52,961\n\n \n\n \n\n$\n\n32,260\n\n \n\n \n\n(1)\nLong-lived assets exclude goodwill, intangible assets, non-marketable investments and deferred taxes, which are not allocated to specific geographic locations as it is impracticable to do so.\n\n14.\nEARNINGS PER SHARE\n\nBasic earnings per share is computed by dividing net income available to common shareholders for the period by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income available to common shareholders for the period by the weighted-average number of common shares outstanding during the period, plus the dilutive effect of outstanding restricted stock-based awards, stock options and shares issuable under the Purchase Plan as applicable pursuant to the treasury stock method and the dilutive effect of Mandatory Convertible Preferred Stock pursuant to the if-converted method. The following table sets forth the computation of basic and diluted earnings per share attributable to common shareholders:\n\n \n\n \n\n \n\nYear Ended May 31,\n\n \n\n(in millions, except per share data)\n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nNet income\n\n \n\n$\n\n17,087\n\n \n\n \n\n$\n\n12,443\n\n \n\n \n\n$\n\n10,467\n\n \n\nPreferred stock dividends\n\n \n\n \n\n103\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nNet income available to common shareholders\n\n \n\n$\n\n16,984\n\n \n\n \n\n$\n\n12,443\n\n \n\n \n\n$\n\n10,467\n\n \n\nWeighted-average common shares outstanding\n\n \n\n \n\n2,860\n\n \n\n \n\n \n\n2,789\n\n \n\n \n\n \n\n2,744\n\n \n\nDilutive effect of employee stock plans\n\n \n\n \n\n54\n\n \n\n \n\n \n\n77\n\n \n\n \n\n \n\n79\n\n \n\nDilutive weighted-average common shares outstanding\n\n \n\n \n\n2,914\n\n \n\n \n\n \n\n2,866\n\n \n\n \n\n \n\n2,823\n\n \n\nBasic earnings per share attributable to common shareholders\n\n \n\n$\n\n5.94\n\n \n\n \n\n$\n\n4.46\n\n \n\n \n\n$\n\n3.82\n\n \n\nDiluted earnings per share attributable to common shareholders\n\n \n\n$\n\n5.83\n\n \n\n \n\n$\n\n4.34\n\n \n\n \n\n$\n\n3.71\n\n \n\nStock awards and shares excluded from calculation(1)\n\n \n\n \n\n31\n\n \n\n \n\n \n\n23\n\n \n\n \n\n \n\n27\n\n \n\n \n\n(1)\nConsists of: (1) anti-dilutive restricted stock-based awards and stock options, both of which were service-based, as calculated using the treasury stock method, (2) anti-dilutive Mandatory Convertible Preferred Stock as calculated using the if-converted method and (3) contingently issuable shares pursuant to PSO arrangements as the performance conditions were not met. These excluded stock awards and shares could be dilutive in the future. See Note 11 for information regarding our stock-based compensation plans.\n\n \n\n15.\nLEGAL PROCEEDINGS\n\nNetherlands Privacy Class Action\n\nOn August 14, 2020, The Privacy Collective (TPC), a foundation having its registered office in Amsterdam, filed a purported class action lawsuit against Oracle Nederland B.V, Oracle Corporation and Oracle America, Inc. (the Oracle Defendants), Salesforce.com, Inc. and SFDC Netherlands B.V. in the District Court of Amsterdam. TPC alleges that the Oracle Defendants’ Data Management Platform product violates certain articles of the European Union Charter of Fundamental Rights, the General Data Protection Regulation (GDPR) and the Dutch Telecommunications Act (Telecommunicatiewet). TPC claims damages under a number of categories, including: “immaterial damages” (at a\n\n103\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nfixed amount of €500 per Dutch internet user); “material damages” (in that the costs of loss of control over personal data should be equated to the market value of the personal data for parties like the Oracle Defendants); compensation for losses suffered due to an alleged data breach (at a fixed amount of €100 per Dutch internet user); and compensation for the costs of the litigation funder (10% to 25% of the compensation awarded); and the (actual) cost of the proceedings and extrajudicial costs.\n\nWe filed our defense on March 3, 2021, and on December 29, 2021, the District Court issued a judgment, holding that all of TPC’s claims were deemed inadmissible because of fundamental procedural flaws. TPC filed an appeal with the Court of Appeal in Amsterdam challenging the District Court’s judgment, except for the claims regarding the alleged data breach, which were dropped. On June 18, 2024, the Court of Appeal overturned the District Court’s decision regarding admissibility, thus permitting the case to proceed. We requested that the Court of Appeal permit an interim appeal to the Dutch Supreme Court and/or the European Court of Justice. On September 24, 2024, the Court of Appeal issued a judgment confirming that TPC’s claims are admissible and referred the matter back to the District Court of Amsterdam for a decision on the merits of TPC’s claims, including TPC’s claims for damages under article 82 of the GDPR. The Court of Appeal also granted Oracle’s request for an interim appeal to the Supreme Court, appealing the June 18 and September 24, 2024 judgments.\n\nOracle filed its statement of appeal with the Dutch Supreme Court on December 20, 2024, and TPC appeared in the proceedings on January 31, 2025. The filing of the Supreme Court appeal effectively suspended proceedings before the District Court pursuant to applicable procedural rules. TPC filed its statement of defense in response to our Supreme Court appeal and a counter appeal on February 27, 2025. Oracle filed its statement of defense to the counter appeal on March 28, 2025. TPC and Oracle filed their written submissions setting out their detailed arguments on July 18, 2025. The parties filed their respective further written replies and rejoinders on August 28, 2025. A hearing on this matter was held on September 26, 2025. As scheduled, on January 30, 2026, the Advocate General handed down a non-binding opinion advising the Supreme Court to dismiss Oracle’s grounds of appeal and to uphold TPC’s appeal in part. On March 6, 2026, we filed a response to the opinion. The Supreme Court’s judgment is scheduled to be issued on June 28, 2026.\n\nOn September 24, 2025, TPC filed a motion in the District Court to lift the suspension of proceedings. On September 25, 2025, Oracle opposed that motion. The court has not yet ruled on that motion.\n\nWe believe that we have meritorious defenses against this action, including defenses to the quantum of damages claimed, and we will continue to vigorously defend it.\n\nWhile the final outcome of this matter cannot be predicted with certainty, we do not believe that it will have a material impact on our financial position or results of operations.\n\nSecurities Class Action Regarding Oracle Cloud Infrastructure\n\nOn February 3, 2026, a putative class action, brought by an alleged stockholder of Oracle, was filed in the U.S. District Court for the District of Delaware against us, our Chief Technology Officer, our two Chief Executive Officers, two other Oracle executives, and one member of the Board. The plaintiff alleges that defendants made or are responsible for false and misleading statements regarding Oracle’s cloud infrastructure business. The plaintiff seeks a ruling that this case may proceed as a class action and seeks damages and attorneys’ fees and costs. The court entered a scheduling order, under which plaintiff is scheduled to file an amended complaint by July 14, 2026, and defendants must respond to the complaint by September 16, 2026. If defendants move to dismiss the amended complaint, that motion will be fully briefed by December 18, 2026.\n\nWe believe that we have meritorious defenses against this action, and we will continue to vigorously defend it.\n\nWhile the final outcome of this matter cannot be predicted with certainty, we do not believe that it will have a material impact on our financial position or results of operations.\n\nOther Litigation\n\nWe are party to various other legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business, including proceedings and claims that relate to acquisitions we have completed or to companies\n\n104\n\n[Table of Contents](#toc_page)\n\n \n\n \n\nwe have acquired or are attempting to acquire. While the outcome of these matters cannot be predicted with certainty, we do not believe that the outcome of any of these matters, individually or in the aggregate, will result in losses that are materially in excess of amounts already recognized, if any.\n\n105\n\n[Table of Contents](#toc_page)"}