Oracle Announces Fiscal Year 2026 Second Quarter Financial Results
Rhea-AI Summary
Oracle (NYSE: ORCL) reported fiscal 2026 Q2 results on December 10, 2025: Total revenue $16.1B (+14% USD, +13% cc), Cloud revenue $8.0B (+34% USD, +33% cc), and Remaining Performance Obligations $523B (up 438% USD). GAAP EPS was $2.10 (+91% USD) and non-GAAP EPS was $2.26 (+54% USD); EPS benefited from a $2.7B pre-tax gain from the sale of Oracle's interest in Ampere. Q2 non-GAAP operating income was $6.7B (+10% USD). Operating cash flow over 12 months was $22.3B (+10% USD). The board declared a $0.50 quarterly cash dividend payable January 23, 2026.
Positive
- RPO $523B up 438% YoY
- Cloud revenue $8.0B up 34% YoY
- IaaS revenue $4.1B up 68% YoY
- Non-GAAP EPS $2.26 up 54% YoY
- Operating cash flow $22.3B up 10% YoY
Negative
- Software revenue $5.9B down 3% YoY (down 5% cc)
- Q2 EPS benefited from a $2.7B pre-tax gain from the Ampere sale
Market Reaction 15 min delay 26 Alerts
Following this news, ORCL has declined 11.55%, reflecting a significant negative market reaction. Our momentum scanner has triggered 26 alerts so far, indicating elevated trading interest and price volatility. The stock is currently trading at $197.25. This price movement has removed approximately $83.02B from the company's valuation. Trading volume is above average at 2.0x the average, suggesting increased trading activity.
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Key Figures
Market Reality Check
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Peers show mixed but mostly modest gains, with MSFT up 0.6%, PLTR up 0.47%, FFIV up 3.94%, and NTAP up 0.21%, while PANW is roughly flat at -0.01%. No broad sector momentum flag is present.
Historical Context
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Dec 02 | Earnings date notice | Neutral | +0.1% | Scheduling of Q2 FY26 earnings release and investor webcast details. |
| Nov 20 | Board change | Neutral | -6.6% | Addition of Stephen Rusckowski to the board and governance updates. |
| Nov 20 | Health network win | Positive | -6.6% | Oracle Health gaining TEFCA QHIN designation to enhance interoperability. |
| Nov 19 | AI industry award | Positive | +2.3% | Top ranking in Chartis RiskTech AI 50 2025 for AI in financial services. |
| Nov 18 | AI health IT win | Positive | +0.3% | ONC certification of AI-powered EHR for ambulatory use and DEA EPCS compliance. |
Recent news shows mostly aligned price moves on clearly positive AI/cloud milestones, but notable divergences on governance and health-network news, indicating occasional disconnect between positive headlines and near-term price reaction.
This announcement continues a string of cloud- and AI-focused developments for Oracle. Prior earnings in Q1 FY26 showed strong growth with revenue of $14.9B and cloud revenue of $7.2B, plus RPO jumping to $455B. FY25 results highlighted double-digit cloud growth and a dividend of $0.50 per share. Recent AI and healthcare IT wins, including ONC certification and RiskTech AI recognition, underline Oracle’s push into AI-driven services. Today’s Q2 FY26 release extends that trajectory with higher RPO, cloud revenue, and EPS.
Market Pulse Summary
The stock is dropping -11.6% following this news. A negative reaction despite solid headline figures would fit Oracle’s occasional divergence pattern, where positive governance or health IT news previously coincided with declines of around -6.58%. While Q2 showed strong cloud growth and RPO of $523B, some investors might focus on items such as the one-time $2.7B Ampere gain or shifts in chip strategy. Historical volatility around earnings could also amplify downside moves.
Key Terms
remaining performance obligations financial
non-GAAP financial
operating cash flow financial
AI-generated analysis. Not financial advice.
- Q2 Remaining Performance Obligations
$523 billion 438% in USD - Q2 GAAP Earnings per Share up
91% to$2.10 54% to$2.26 - Q2 Total Revenue
$16.1 billion 14% in USD and up13% in constant currency - Q2 Cloud Revenue (IaaS plus SaaS)
$8.0 billion 34% in USD and up33% in constant currency - Q2 Cloud Infrastructure (IaaS) Revenue
$4.1 billion 68% in USD and up66% in constant currency - Q2 Cloud Application (SaaS) Revenue
$3.9 billion 11% in both USD and constant currency - Q2 Fusion Cloud ERP (SaaS) Revenue
$1.1 billion 18% in USD and up17% in constant currency - Q2 NetSuite Cloud ERP (SaaS) Revenue
$1.0 billion 13% in both USD and constant currency
Q2 GAAP operating income was
Short-term deferred revenues were
"Remaining Performance Obligations (RPO) increased by
"Oracle sold Ampere because we no longer think it is strategic for us to continue designing, manufacturing and using our own chips in our cloud datacenters," said Oracle Chairman and CTO, Larry Ellison. "We are now committed to a policy of chip neutrality where we work closely with all our CPU and GPU suppliers. Of course, we will continue to buy the latest GPUs from NVIDIA, but we need to be prepared and able to deploy whatever chips our customers want to buy. There are going to be a lot of changes in AI technology over the next few years and we must remain agile in response to those changes."
"Oracle is very good at building and running high-performance and cost-efficient cloud datacenters," said Oracle CEO, Clay Magouyrk. "For years Oracle has been investing in AI and building autonomous cloud software. Oracle's Autonomous Database and Autonomous Linux have been key to reducing human labor and human error in our datacenters. Because our datacenters are highly automated, we can build and run more of them. Oracle has over 211 live and planned regions worldwide—more than any of our cloud competitors. We are more than halfway through building 72 Oracle Multicloud datacenters to be embedded throughout the Amazon, Google and Microsoft clouds. We are committed to Cloud Neutrality because we believe that our customers should be able to run their Oracle databases in any cloud they choose. That strategy is definitely paying off. Our Multicloud database business is our fastest growing business—up
"AI Training and selling AI Models are very big businesses," said Oracle CEO, Mike Sicilia. "But we think there is an even larger opportunity—embedding AI in a variety of different products. Oracle is in a unique position to embed AI in all three layers of our software products: our Cloud Datacenter software, our Autonomous Database and Analytic software, and our Applications software. All three of these Oracle software businesses are already big—AI will make them all better and bigger. AI allows us to automate complex multistep processes that were impossible to automate before AI. AI is enabling us to automate loan origination and risk quantification for banks and their customers. AI is enabling us to help doctors diagnose and care for their patients and manage the reimbursement process between healthcare providers and payers. All of the top five AI Models are in the Oracle Cloud. We have huge advantages over our applications competitors."
The board of directors declared a quarterly cash dividend of
- A sample list of customers which purchased Oracle Cloud services during the quarter will be available at www.oracle.com/customers/earnings/.
- A list of recent technical innovations and announcements is available at www.oracle.com/news/.
- To learn what industry analysts have been saying about Oracle's products and services see www.oracle.com/corporate/analyst-reports/.
Earnings Conference Call and Webcast
Oracle will hold a conference call and webcast today to discuss these results at 4:00 p.m. Central. A live and replay webcast will be available on the Oracle Investor Relations website at www.oracle.com/investor/.
About Oracle
Oracle offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. For more information about Oracle (NYSE: ORCL), please visit us at www.oracle.com.
Trademarks
Oracle, Java, MySQL, and NetSuite are registered trademarks of Oracle Corporation. NetSuite was the first cloud company—ushering in the new era of cloud computing.
"Safe Harbor" Statement: Statements in this press release relating to future plans, expectations, beliefs, intentions and prospects, including our plans to maintain chip neutrality, our ability to build and run high-performance and cost-efficient cloud datacenters and increase buildout of additional datacenters, the growth opportunity provided by embedding AI in a variety of our product and the benefits of AI generally are "forward-looking statements" and are subject to material risks and uncertainties. Risks and uncertainties that could affect our current expectations and our actual results, include, among others: our ability to develop new products and services, integrate acquired products and services and enhance our existing products and services, including our AI products; our management of complex cloud and hardware offerings, including the sourcing of technologies and technology components such as graphic processing units; our ability to anticipate, plan for, secure and manage datacenter capacity; significant coding, manufacturing or configuration errors in our offerings; risks associated with acquisitions; business volatility and risks associated with government contracting; economic, political and market conditions, including tariffs and trade wars; information technology system failures, privacy and data security concerns; cybersecurity breaches; unfavorable legal proceedings, government investigations, and complex and changing laws and regulations. A detailed discussion of these factors and other risks that affect our business is contained in our SEC filings, including our most recent reports on Form 10-K and Form 10-Q, particularly under the heading "Risk Factors." Copies of these filings are available online from the SEC or by contacting Oracle's Investor Relations Department at (650) 506-4073 or by clicking on SEC Filings on the Oracle Investor Relations website at www.oracle.com/investor/. All information set forth in this press release is current as of December 10, 2025. Oracle undertakes no duty to update any statement in light of new information or future events.
ORACLE CORPORATION | ||||||||
Q2 FISCAL 2026 FINANCIAL RESULTS | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
($ in millions, except per share data) | ||||||||
Three Months Ended November 30, | % Increase | |||||||
% Increase | (Decrease) | |||||||
2025 | % of | 2024 | % of | (Decrease) | in Constant | |||
Revenues | Revenues | in US $ | Currency (1) | |||||
REVENUES | ||||||||
Cloud | $ 7,977 | 50 % | $ 5,937 | 42 % | 34 % | 33 % | ||
Software | 5,877 | 36 % | 6,064 | 44 % | (3 %) | (5 %) | ||
Hardware | 776 | 5 % | 728 | 5 % | 7 % | 5 % | ||
Services | 1,428 | 9 % | 1,330 | 9 % | 7 % | 6 % | ||
Total revenues | 16,058 | 100 % | 14,059 | 100 % | 14 % | 13 % | ||
OPERATING EXPENSES | ||||||||
Cloud and software | 3,990 | 25 % | 2,746 | 19 % | 45 % | 45 % | ||
Hardware | 215 | 1 % | 172 | 1 % | 25 % | 23 % | ||
Services | 1,169 | 7 % | 1,167 | 8 % | 0 % | (1 %) | ||
Sales and marketing | 2,149 | 13 % | 2,190 | 16 % | (2 %) | (3 %) | ||
Research and development | 2,561 | 16 % | 2,471 | 18 % | 4 % | 4 % | ||
General and administrative | 409 | 3 % | 387 | 3 % | 6 % | 5 % | ||
Amortization of intangible assets | 407 | 3 % | 591 | 4 % | (31 %) | (31 %) | ||
Acquisition related and other | 21 | 0 % | 31 | 0 % | (33 %) | (35 %) | ||
Restructuring | 406 | 3 % | 84 | 1 % | 387 % | 378 % | ||
Total operating expenses | 11,327 | 71 % | 9,839 | 70 % | 15 % | 14 % | ||
OPERATING INCOME | 4,731 | 29 % | 4,220 | 30 % | 12 % | 9 % | ||
Interest expense | (1,057) | (7 %) | (866) | (6 %) | 22 % | 22 % | ||
Non-operating income, net | 2,668 | 17 % | 36 | 0 % | * | * | ||
INCOME BEFORE INCOME TAXES | 6,342 | 39 % | 3,390 | 24 % | 87 % | 82 % | ||
Provision for income taxes | 207 | 1 % | 239 | 2 % | (14 %) | (16 %) | ||
NET INCOME | $ 6,135 | 38 % | $ 3,151 | 22 % | 95 % | 89 % | ||
EARNINGS PER SHARE: | ||||||||
Basic | $ 2.14 | $ 1.13 | ||||||
Diluted | $ 2.10 | $ 1.10 | ||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||
Basic | 2,864 | 2,790 | ||||||
Diluted | 2,922 | 2,869 | ||||||
(1) | We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than fiscal year, rather than the actual exchange rates in effect during the respective periods. Movements in international currencies relative to ended November 30, 2025 compared with the corresponding prior year period increased our total revenues by 1 percentage point, total operating expenses by 1 percentage point and operating income by 3 percentage points. | |||||||
* | Not meaningful | |||||||
ORACLE CORPORATION | ||||||||||||||||||||
Q2 FISCAL 2026 FINANCIAL RESULTS | ||||||||||||||||||||
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1) | ||||||||||||||||||||
($ in millions, except per share data) | ||||||||||||||||||||
Three Months Ended November 30, | % Increase | % Increase (Decrease) in | ||||||||||||||||||
2025 | 2025 | 2024 | 2024 | GAAP | Non-GAAP | GAAP | Non-GAAP | |||||||||||||
GAAP | Adj. | Non-GAAP | GAAP | Adj. | Non-GAAP | |||||||||||||||
TOTAL REVENUES | $ 16,058 | $ - | $ 16,058 | $ 14,059 | $ - | $ 14,059 | 14 % | 14 % | 13 % | 13 % | ||||||||||
TOTAL OPERATING EXPENSES | $ 11,327 | $ (1,990) | $ 9,337 | $ 9,839 | $ (1,876) | $ 7,963 | 15 % | 17 % | 14 % | 16 % | ||||||||||
Stock-based compensation (3) | 1,156 | (1,156) | - | 1,170 | (1,170) | - | (1 %) | * | (1 %) | * | ||||||||||
Amortization of intangible assets (4) | 407 | (407) | - | 591 | (591) | - | (31 %) | * | (31 %) | * | ||||||||||
Acquisition related and other | 21 | (21) | - | 31 | (31) | - | (33 %) | * | (35 %) | * | ||||||||||
Restructuring | 406 | (406) | - | 84 | (84) | - | 387 % | * | 378 % | * | ||||||||||
OPERATING INCOME | $ 4,731 | $ 1,990 | $ 6,721 | $ 4,220 | $ 1,876 | $ 6,096 | 12 % | 10 % | 9 % | 8 % | ||||||||||
OPERATING MARGIN % | 29 % | 42 % | 30 % | 43 % | (56) bp. | (150) bp. | (92) bp. | (171) bp. | ||||||||||||
INCOME TAX EFFECTS (5) | $ 207 | $ 1,527 | $ 1,734 | $ 239 | $ 820 | $ 1,059 | (14 %) | 64 % | (16 %) | 61 % | ||||||||||
NET INCOME | $ 6,135 | $ 463 | $ 6,598 | $ 3,151 | $ 1,056 | $ 4,207 | 95 % | 57 % | 89 % | 54 % | ||||||||||
DILUTED EARNINGS PER SHARE | $ 2.10 | $ 2.26 | $ 1.10 | $ 1.47 | 91 % | 54 % | 86 % | 51 % | ||||||||||||
DILUTED WEIGHTED AVERAGE COMMON | 2,922 | - | 2,922 | 2,869 | - | 2,869 | 2 % | 2 % | 2 % | 2 % | ||||||||||
(1) | This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A. | |||||||||||||||||||
(2) | We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than | |||||||||||||||||||
(3) | Stock-based compensation was included in the following GAAP operating expense categories: | |||||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||||||
November 30, 2025 | November 30, 2024 | |||||||||||||||||||
GAAP | Adj. | Non-GAAP | GAAP | Adj. | Non-GAAP | |||||||||||||||
Cloud and software | $ 151 | $ (151) | $ - | $ 158 | $ (158) | $ - | ||||||||||||||
Hardware | 7 | (7) | - | 8 | (8) | - | ||||||||||||||
Services | 51 | (51) | - | 53 | (53) | - | ||||||||||||||
Sales and marketing | 185 | (185) | - | 195 | (195) | - | ||||||||||||||
Research and development | 668 | (668) | - | 657 | (657) | - | ||||||||||||||
General and administrative | 94 | (94) | - | 99 | (99) | - | ||||||||||||||
Total stock-based compensation | $ 1,156 | $ (1,156) | $ - | $ 1,170 | $ (1,170) | $ - | ||||||||||||||
(4) | Estimated future annual amortization expense related to intangible assets as of November 30, 2025 was as follows: | |||||||||||||||||||
Remainder of fiscal 2026 | $ 812 | |||||||||||||||||||
Fiscal 2027 | 672 | |||||||||||||||||||
Fiscal 2028 | 635 | |||||||||||||||||||
Fiscal 2029 | 561 | |||||||||||||||||||
Fiscal 2030 | 522 | |||||||||||||||||||
Fiscal 2031 | 332 | |||||||||||||||||||
Thereafter | 226 | |||||||||||||||||||
Total intangible assets, net | $ 3,760 | |||||||||||||||||||
(5) | Income tax effects were calculated reflecting an effective GAAP tax rate of fiscal 2026 and 2025, respectively. The difference in our GAAP and non-GAAP tax rates in each of the second quarters of fiscal 2026 and 2025 was primarily due to the net tax effects related to stock-based compensation expense; acquisition related and other items, including the tax effects on amortization of intangible assets; and restructuring expense, partially offset by the net deferred tax effects related to an income tax benefit that was previously recorded due to the partial realignment of our legal entity structure. | |||||||||||||||||||
* | Not meaningful | |||||||||||||||||||
ORACLE CORPORATION | ||||||||
Q2 FISCAL 2026 YEAR TO DATE FINANCIAL RESULTS | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
($ in millions, except per share data) | ||||||||
Six Months Ended November 30, | % Increase | |||||||
% Increase | (Decrease) | |||||||
2025 | % of | 2024 | % of | (Decrease) | in Constant | |||
Revenues | Revenues | in US $ | Currency (1) | |||||
REVENUES | ||||||||
Cloud | $ 15,162 | 49 % | $ 11,559 | 42 % | 31 % | 30 % | ||
Software | 11,598 | 37 % | 11,830 | 44 % | (2 %) | (4 %) | ||
Hardware | 1,446 | 5 % | 1,383 | 5 % | 5 % | 3 % | ||
Services | 2,777 | 9 % | 2,594 | 9 % | 7 % | 6 % | ||
Total revenues | 30,983 | 100 % | 27,366 | 100 % | 13 % | 12 % | ||
OPERATING EXPENSES | ||||||||
Cloud and software | 7,597 | 24 % | 5,344 | 20 % | 42 % | 42 % | ||
Hardware | 393 | 1 % | 333 | 1 % | 18 % | 16 % | ||
Services | 2,268 | 7 % | 2,314 | 8 % | (2 %) | (3 %) | ||
Sales and marketing | 4,211 | 14 % | 4,226 | 15 % | 0 % | (2 %) | ||
Research and development | 5,051 | 16 % | 4,777 | 18 % | 6 % | 6 % | ||
General and administrative | 786 | 3 % | 745 | 3 % | 5 % | 5 % | ||
Amortization of intangible assets | 826 | 3 % | 1,215 | 4 % | (32 %) | (32 %) | ||
Acquisition related and other | 35 | 0 % | 44 | 0 % | (21 %) | (24 %) | ||
Restructuring | 808 | 3 % | 157 | 1 % | 415 % | 406 % | ||
Total operating expenses | 21,975 | 71 % | 19,155 | 70 % | 15 % | 14 % | ||
OPERATING INCOME | 9,008 | 29 % | 8,211 | 30 % | 10 % | 7 % | ||
Interest expense | (1,980) | (7 %) | (1,708) | (6 %) | 16 % | 16 % | ||
Non-operating income, net | 2,741 | 9 % | 57 | 0 % | * | * | ||
INCOME BEFORE INCOME TAXES | 9,769 | 31 % | 6,560 | 24 % | 49 % | 44 % | ||
Provision for income taxes (2) | 707 | 2 % | 480 | 2 % | 47 % | 43 % | ||
NET INCOME | $ 9,062 | 29 % | $ 6,080 | 22 % | 49 % | 45 % | ||
EARNINGS PER SHARE: | ||||||||
Basic | $ 3.19 | $ 2.19 | ||||||
Diluted | $ 3.11 | $ 2.13 | ||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||
Basic | 2,845 | 2,775 | ||||||
Diluted | 2,916 | 2,860 | ||||||
(1) | We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than dollars at the exchange rates in effect on May 31, 2025, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during the respective periods. Movements in international currencies relative to with the corresponding prior year period increased our total revenues by 1 percentage point, total operating expenses by 1 percentage point and operating income by 3 percentage points. | |||||||
(2) | Provision for income taxes for the six months ended November 30, 2025 includes the impact of the law on July 4, 2025. | |||||||
* | Not meaningful | |||||||
ORACLE CORPORATION | ||||||||||||||||||||
Q2 FISCAL 2026 YEAR TO DATE FINANCIAL RESULTS | ||||||||||||||||||||
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1) | ||||||||||||||||||||
($ in millions, except per share data) | ||||||||||||||||||||
Six Months Ended November 30, | % Increase | % Increase (Decrease) | ||||||||||||||||||
2025 | 2025 | 2024 | 2024 | GAAP | Non-GAAP | GAAP | Non-GAAP | |||||||||||||
GAAP | Adj. | Non-GAAP | GAAP | Adj. | Non-GAAP | |||||||||||||||
TOTAL REVENUES | $ 30,983 | $ - | $ 30,983 | $ 27,366 | $ - | $ 27,366 | 13 % | 13 % | 12 % | 12 % | ||||||||||
TOTAL OPERATING EXPENSES | $ 21,975 | $ (3,949) | $ 18,026 | $ 19,155 | $ (3,592) | $ 15,563 | 15 % | 16 % | 14 % | 15 % | ||||||||||
Stock-based compensation (3) | 2,280 | (2,280) | - | 2,176 | (2,176) | - | 5 % | * | 5 % | * | ||||||||||
Amortization of intangible assets (4) | 826 | (826) | - | 1,215 | (1,215) | - | (32 %) | * | (32 %) | * | ||||||||||
Acquisition related and other | 35 | (35) | - | 44 | (44) | - | (21 %) | * | (24 %) | * | ||||||||||
Restructuring | 808 | (808) | - | 157 | (157) | - | 415 % | * | 406 % | * | ||||||||||
OPERATING INCOME | $ 9,008 | $ 3,949 | $ 12,957 | $ 8,211 | $ 3,592 | $ 11,803 | 10 % | 10 % | 7 % | 8 % | ||||||||||
OPERATING MARGIN % | 29 % | 42 % | 30 % | 43 % | (93) bp. | (131) bp. | (136) bp. | (158) bp. | ||||||||||||
INCOME TAX EFFECTS (5) | $ 707 | $ 2,131 | $ 2,838 | $ 480 | $ 1,500 | $ 1,980 | 47 % | 43 % | 43 % | 40 % | ||||||||||
NET INCOME | $ 9,062 | $ 1,818 | $ 10,880 | $ 6,080 | $ 2,092 | $ 8,172 | 49 % | 33 % | 45 % | 31 % | ||||||||||
DILUTED EARNINGS PER SHARE | $ 3.11 | $ 3.73 | $ 2.13 | $ 2.86 | 46 % | 31 % | 42 % | 28 % | ||||||||||||
DILUTED WEIGHTED AVERAGE COMMON | 2,916 | - | 2,916 | 2,860 | - | 2,860 | 2 % | 2 % | 2 % | 2 % | ||||||||||
(1) | This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A. | |||||||||||||||||||
(2) | We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than on May 31, 2025, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during the respective periods. | |||||||||||||||||||
(3) | Stock-based compensation was included in the following GAAP operating expense categories: | |||||||||||||||||||
Six Months Ended | Six Months Ended | |||||||||||||||||||
November 30, 2025 | November 30, 2024 | |||||||||||||||||||
GAAP | Adj. | Non-GAAP | GAAP | Adj. | Non-GAAP | |||||||||||||||
Cloud and software | $ 307 | $ (307) | $ - | $ 299 | $ (299) | $ - | ||||||||||||||
Hardware | 14 | (14) | - | 14 | (14) | - | ||||||||||||||
Services | 100 | (100) | - | 96 | (96) | - | ||||||||||||||
Sales and marketing | 362 | (362) | - | 356 | (356) | - | ||||||||||||||
Research and development | 1,314 | (1,314) | - | 1,226 | (1,226) | - | ||||||||||||||
General and administrative | 183 | (183) | - | 185 | (185) | - | ||||||||||||||
Total stock-based compensation | $ 2,280 | $ (2,280) | $ - | $ 2,176 | $ (2,176) | $ - | ||||||||||||||
(4) | Estimated future annual amortization expense related to intangible assets as of November 30, 2025 was as follows: | |||||||||||||||||||
Remainder of fiscal 2026 | $ 812 | |||||||||||||||||||
Fiscal 2027 | 672 | |||||||||||||||||||
Fiscal 2028 | 635 | |||||||||||||||||||
Fiscal 2029 | 561 | |||||||||||||||||||
Fiscal 2030 | 522 | |||||||||||||||||||
Fiscal 2031 | 332 | |||||||||||||||||||
Thereafter | 226 | |||||||||||||||||||
Total intangible assets, net | $ 3,760 | |||||||||||||||||||
(5) | Income tax effects were calculated reflecting an effective GAAP tax rate of difference in our GAAP and non-GAAP tax rates in each of the first half of fiscal 2026 and 2025 was primarily due to the net tax effects related to stock-based compensation expense; acquisition related and other items, including the tax effects on amortization of intangible assets; and restructuring expense, partially offset by the net deferred tax effects related to an income tax benefit that was previously recorded due to the partial realignment of our legal entity structure; and, for the first half of fiscal 2026, the impact of the | |||||||||||||||||||
* | Not meaningful | |||||||||||||||||||
ORACLE CORPORATION | ||||||
Q2 FISCAL 2026 FINANCIAL RESULTS | ||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
($ in millions) | ||||||
November 30, | May 31, | |||||
2025 | 2025 | |||||
ASSETS | ||||||
Current Assets: | ||||||
Cash and cash equivalents | $ 19,241 | $ 10,786 | ||||
Marketable securities | 525 | 417 | ||||
Trade receivables, net | 9,440 | 8,558 | ||||
Prepaid expenses and other current assets | 5,160 | 4,818 | ||||
Total Current Assets | 34,366 | 24,579 | ||||
Non-Current Assets: | ||||||
Property, plant and equipment, net | 67,875 | 43,522 | ||||
Intangible assets, net | 3,760 | 4,587 | ||||
Goodwill | 62,207 | 62,207 | ||||
Deferred tax assets | 11,531 | 11,877 | ||||
Other non-current assets | 25,245 | 21,589 | ||||
Total Non-Current Assets | 170,618 | 143,782 | ||||
TOTAL ASSETS | $ 204,984 | $ 168,361 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Current Liabilities: | ||||||
Notes payable and other borrowings, current | $ 8,091 | $ 7,271 | ||||
Accounts payable | 10,140 | 5,113 | ||||
Accrued compensation and related benefits | 1,947 | 2,243 | ||||
Deferred revenues | 9,940 | 9,387 | ||||
Other current liabilities | 7,677 | 8,629 | ||||
Total Current Liabilities | 37,795 | 32,643 | ||||
Non-Current Liabilities: | ||||||
Notes payable and other borrowings, non-current | 99,984 | 85,297 | ||||
Income taxes payable | 10,885 | 10,269 | ||||
Operating lease liabilities | 16,311 | 11,536 | ||||
Other non-current liabilities | 9,552 | 7,647 | ||||
Total Non-Current Liabilities | 136,732 | 114,749 | ||||
Stockholders' Equity | 30,457 | 20,969 | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 204,984 | $ 168,361 | ||||
ORACLE CORPORATION | |||||
Q2 FISCAL 2026 FINANCIAL RESULTS | |||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
($ in millions) | |||||
Six Months Ended November 30, | |||||
2025 | 2024 | ||||
Cash Flows From Operating Activities: | |||||
Net income | $ 9,062 | $ 6,080 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Depreciation | 3,055 | 1,712 | |||
Amortization of intangible assets | 826 | 1,215 | |||
Deferred income taxes | 332 | (601) | |||
Stock-based compensation | 2,280 | 2,176 | |||
Gains from investments and other, net | (2,227) | 298 | |||
Changes in operating assets and liabilities: | |||||
Increase in trade receivables, net | (900) | (451) | |||
Decrease in prepaid expenses and other assets | 1,285 | 676 | |||
Decrease in accounts payable and other liabilities | (1,366) | (1,143) | |||
Decrease in income taxes payable | (2,608) | (1,685) | |||
Increase in deferred revenues | 467 | 454 | |||
Net cash provided by operating activities | 10,206 | 8,731 | |||
Cash Flows From Investing Activities: | |||||
Purchases of marketable securities and other investments | (634) | (636) | |||
Proceeds from sales and maturities of marketable securities and other investments | 4,737 | 356 | |||
Capital expenditures | (20,535) | (6,273) | |||
Net cash used for investing activities | (16,432) | (6,553) | |||
Cash Flows From Financing Activities: | |||||
Payments for repurchases of common stock | (95) | (300) | |||
Proceeds from issuances of common stock | 1,308 | 307 | |||
Shares repurchased for tax withholdings upon vesting of restricted stock-based awards | (109) | (898) | |||
Payments of dividends to stockholders | (2,848) | (2,221) | |||
Proceeds from (repayments of) commercial paper and other short-term financing, net | 886 | (396) | |||
Proceeds from issuances of senior notes and term loan credit agreements, net of issuance costs | 17,880 | 11,837 | |||
Repayments of senior notes, term loan credit agreements and other borrowings | (2,122) | (9,700) | |||
Other financing activities, net | (203) | (276) | |||
Net cash provided by (used for) financing activities | 14,697 | (1,647) | |||
Effect of exchange rate changes on cash and cash equivalents | (16) | (44) | |||
Net increase in cash and cash equivalents | 8,455 | 487 | |||
Cash and cash equivalents at beginning of period | 10,786 | 10,454 | |||
Cash and cash equivalents at end of period | $ 19,241 | $ 10,941 | |||
ORACLE CORPORATION | ||||||||||
Q2 FISCAL 2026 FINANCIAL RESULTS | ||||||||||
FREE CASH FLOW - TRAILING FOUR-QUARTERS (1) | ||||||||||
($ in millions) | ||||||||||
Fiscal 2025 | Fiscal 2026 | |||||||||
Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | |||
GAAP Operating Cash Flow | $ 19,126 | $ 20,287 | $ 20,745 | $ 20,821 | $ 21,534 | $ 22,296 | ||||
Capital Expenditures | (7,855) | (10,745) | (14,933) | (21,215) | (27,414) | (35,477) | ||||
Free Cash Flow | $ 11,271 | $ 9,542 | $ 5,812 | $ (394) | $ (5,880) | $ (13,181) | ||||
Operating Cash Flow % | 8 % | 19 % | 14 % | 12 % | 13 % | 10 % | ||||
Free Cash Flow % Growth | 19 % | (6 %) | (53 %) | (103 %) | (152 %) | (238 %) | ||||
GAAP Net Income | $ 10,976 | $ 11,624 | $ 12,160 | $ 12,443 | $ 12,441 | $ 15,425 | ||||
Operating Cash Flow as a | 174 % | 175 % | 171 % | 167 % | 173 % | 145 % | ||||
Free Cash Flow as a | 103 % | 82 % | 48 % | (3 %) | (47 %) | (85 %) | ||||
(1) To supplement our statements of cash flows presented on a GAAP basis, we use non-GAAP measures of cash flows on a trailing four-quarter basis to analyze cash flow generated from operations. We believe free cash flow is also useful as one of the bases for comparing our performance with our competitors. The presentation of non-GAAP free cash flow is not meant to be considered in isolation or as an alternative to net income as an indicator of our performance, or as an alternative to cash flows from operating activities as a measure of liquidity. | ||||||||||
ORACLE CORPORATION | ||||||||||||||
Q2 FISCAL 2026 FINANCIAL RESULTS | ||||||||||||||
SUPPLEMENTAL ANALYSIS OF GAAP REVENUES (1) | ||||||||||||||
($ in millions) | ||||||||||||||
Fiscal 2025 | Fiscal 2026 | |||||||||||||
Q1 | Q2 | Q3 | Q4 | TOTAL | Q1 | Q2 | Q3 | Q4 | TOTAL | |||||
REVENUES BY OFFERINGS | ||||||||||||||
Cloud | $ 5,623 | $ 5,937 | $ 6,210 | $ 6,737 | $ 24,506 | $ 7,186 | $ 7,977 | $ 15,162 | ||||||
Software license | 870 | 1,195 | 1,129 | 2,007 | 5,201 | 766 | 939 | 1,705 | ||||||
Software support | 4,896 | 4,869 | 4,797 | 4,961 | 19,523 | 4,955 | 4,938 | 9,893 | ||||||
Software | 5,766 | 6,064 | 5,926 | 6,968 | 24,724 | 5,721 | 5,877 | 11,598 | ||||||
Hardware | 655 | 728 | 703 | 850 | 2,936 | 670 | 776 | 1,446 | ||||||
Services | 1,263 | 1,330 | 1,291 | 1,348 | 5,233 | 1,349 | 1,428 | 2,777 | ||||||
Total revenues | $ 13,307 | $ 14,059 | $ 14,130 | $ 15,903 | $ 57,399 | $ 14,926 | $ 16,058 | $ 30,983 | ||||||
AS REPORTED REVENUE GROWTH | ||||||||||||||
Cloud | 21 % | 24 % | 23 % | 27 % | 24 % | 28 % | 34 % | 31 % | ||||||
Software license | 7 % | 1 % | (10 %) | 9 % | 2 % | (12 %) | (21 %) | (17 %) | ||||||
Software support | 0 % | 0 % | (2 %) | 1 % | 0 % | 1 % | 1 % | 1 % | ||||||
Software | 1 % | 0 % | (4 %) | 3 % | 0 % | (1 %) | (3 %) | (2 %) | ||||||
Hardware | (8 %) | (4 %) | (7 %) | 1 % | (4 %) | 2 % | 7 % | 5 % | ||||||
Services | (9 %) | (3 %) | (1 %) | (2 %) | (4 %) | 7 % | 7 % | 7 % | ||||||
Total revenues | 7 % | 9 % | 6 % | 11 % | 8 % | 12 % | 14 % | 13 % | ||||||
CONSTANT CURRENCY REVENUE | ||||||||||||||
Cloud | 22 % | 24 % | 25 % | 27 % | 24 % | 27 % | 33 % | 30 % | ||||||
Software license | 8 % | 3 % | (8 %) | 8 % | 3 % | (13 %) | (23 %) | (19 %) | ||||||
Software support | 0 % | 0 % | 0 % | 0 % | 0 % | (1 %) | 0 % | 0 % | ||||||
Software | 1 % | 0 % | (2 %) | 2 % | 1 % | (2 %) | (5 %) | (4 %) | ||||||
Hardware | (8 %) | (3 %) | (5 %) | 0 % | (4 %) | 1 % | 5 % | 3 % | ||||||
Services | (8 %) | (3 %) | 1 % | (2 %) | (3 %) | 5 % | 6 % | 6 % | ||||||
Total revenues | 8 % | 9 % | 8 % | 11 % | 9 % | 11 % | 13 % | 12 % | ||||||
CLOUD | ||||||||||||||
Cloud applications | $ 3,469 | $ 3,503 | $ 3,558 | $ 3,742 | $ 14,272 | $ 3,839 | $ 3,898 | $ 7,736 | ||||||
Cloud infrastructure | 2,154 | 2,434 | 2,652 | 2,995 | 10,234 | 3,347 | 4,079 | 7,426 | ||||||
Total cloud revenues | $ 5,623 | $ 5,937 | $ 6,210 | $ 6,737 | $ 24,506 | $ 7,186 | $ 7,977 | $ 15,162 | ||||||
AS REPORTED REVENUE GROWTH | ||||||||||||||
Cloud applications | 10 % | 10 % | 9 % | 12 % | 10 % | 11 % | 11 % | 11 % | ||||||
Cloud infrastructure | 45 % | 52 % | 49 % | 52 % | 50 % | 55 % | 68 % | 62 % | ||||||
Total cloud revenues | 21 % | 24 % | 23 % | 27 % | 24 % | 28 % | 34 % | 31 % | ||||||
CONSTANT CURRENCY REVENUE | ||||||||||||||
Cloud applications | 10 % | 10 % | 10 % | 11 % | 10 % | 10 % | 11 % | 10 % | ||||||
Cloud infrastructure | 46 % | 52 % | 51 % | 52 % | 51 % | 54 % | 66 % | 61 % | ||||||
Total cloud revenues | 22 % | 24 % | 25 % | 27 % | 24 % | 27 % | 33 % | 30 % | ||||||
GEOGRAPHIC REVENUES | ||||||||||||||
Americas | $ 8,372 | $ 8,933 | $ 9,000 | $ 10,034 | $ 36,339 | $ 9,662 | $ 10,467 | $ 20,129 | ||||||
Europe/ | 3,228 | 3,381 | 3,421 | 3,996 | 14,025 | 3,481 | 3,760 | 7,240 | ||||||
Asia Pacific | 1,707 | 1,745 | 1,709 | 1,873 | 7,035 | 1,783 | 1,831 | 3,614 | ||||||
Total revenues | $ 13,307 | $ 14,059 | $ 14,130 | $ 15,903 | $ 57,399 | $ 14,926 | $ 16,058 | $ 30,983 | ||||||
(1) The sum of the quarterly information presented may vary from the year-to-date information presented due to rounding. | ||||||||||||||
(2) We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than on May 31, 2025 and 2024 for the fiscal 2026 and fiscal 2025 constant currency growth rate calculations presented, respectively, rather than the actual exchange rates in effect during the respective periods. | ||||||||||||||
APPENDIX A
ORACLE CORPORATION
Q2 FISCAL 2026 FINANCIAL RESULTS
EXPLANATION OF NON-GAAP MEASURES
To supplement our financial results presented on a GAAP basis, we use the non-GAAP measures indicated in the tables, which exclude certain business combination accounting entries and expenses related to acquisitions, as well as other significant expenses including stock-based compensation, that we believe are helpful in understanding our past financial performance and our future results. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Compensation of our executives is based in part on the performance of our business based on these non-GAAP measures. Our non-GAAP financial measures reflect adjustments based on the following items, as well as the related income tax effects related to each of the below items except for the impact of the
- Stock-based compensation expenses: We have excluded the effect of stock-based compensation expenses from our non-GAAP operating expenses, income tax effects and net income measures. Although stock-based compensation is a key incentive offered to our employees, and we believe such compensation contributed to the revenues earned during the periods presented and also believe it will contribute to the generation of future period revenues, we continue to evaluate our business performance excluding stock-based compensation expenses. Stock-based compensation expenses will recur in future periods.
- Amortization of intangible assets: We have excluded the effect of amortization of intangible assets from our non-GAAP operating expenses, income tax effects and net income measures. Amortization of intangible assets is inconsistent in amount and frequency and is significantly affected by the timing and size of our acquisitions. Investors should note that the use of intangible assets contributed to our revenues earned during the periods presented and will contribute to our future period revenues as well. Amortization of intangible assets will recur in future periods.
- Acquisition related and other expenses; and restructuring expenses: We have excluded the effect of acquisition related and other expenses and the effect of restructuring expenses from our non-GAAP operating expenses, income tax effects and net income measures. We incurred expenses in connection with our acquisitions and also incurred certain other operating expenses or income, which we generally would not have otherwise incurred in the periods presented as a part of our continuing operations. Acquisition related and other expenses consisted of personnel-related costs for transitional and certain other employees, certain business combination adjustments including certain adjustments after the measurement period has ended, and certain other operating items, net. Restructuring expenses consisted of employee severance and other exit costs. We believe it is useful for investors to understand the effects of these items on our total operating expenses. Although acquisition related and other expenses and restructuring expenses may diminish over time with respect to past acquisitions and/or strategic initiatives, we generally will incur certain of these expenses in connection with any future acquisitions and/or strategic initiatives.
- Impact of the
U.S. One, Big, Beautiful Bill Act (OBBBA): OBBBA was signed into law on July 4, 2025. We recorded a net tax expense of$958 million
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SOURCE Oracle
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