Oracle ORCL · USD

13.SEGMENT INFORMATION ASC 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 Officer 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. 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. We have three businesses—cloud and license, hardware and services—each of which is comprised of a single operating segment. All three of our businesses market and sell our offerings globally to businesses of many sizes, government agencies, educational institutions and resellers with a worldwide sales force positioned to offer the combinations that best meet customer needs.Our cloud and license 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 services and license support offerings; and our cloud license and on-premise license offerings. Cloud services and license support revenues are generated from offerings that 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. Cloud services and license support contracts provide customers with access to the latest updates to the applications and infrastructure technologies as they become available and for which the customer contracted and also include related technical support services over the contractual term.

The 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, acquisition related and other expenses, restructuring expenses, stock-based compensation, interest expense or certain other non-operating income (expenses), net. 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.

8.DEFERRED REVENUESDeferred revenues consisted of the following: May 31, (in millions) 2025 2024 Cloud services and license support $ 8,270 $ 8,203 Hardware 614 546 Services 464 512 Cloud license and on-premise license 39 52 Deferred revenues, current 9,387 9,313 Deferred revenues, non-current (in other non-current liabilities) 1,346 1,233 Total deferred revenues $ 10,733 $ 10,546 Deferred cloud services and license support revenues and deferred hardware revenues substantially represent customer payments made in advance for cloud or support contracts that are typically 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. Deferred cloud license and on-premise license revenues typically resulted from customer payments that related to undelivered products and services or specified enhancements.

9.LEASES, OTHER COMMITMENTS AND CERTAIN CONTINGENCIES LeasesWe have operating and finance leases that primarily relate to certain of our data centers and facilities. As of May 31, 2025, our leases substantially have remaining terms of one year to fifteen years, some of which include options to extend and/or terminate the leases.The components of lease expense were as follows: Year Ended May 31, (in millions) 2025 2024 2023 Operating lease cost $ 1,716 $ 1,159 $ 883 Finance lease cost: Amortization of ROU assets $ 48 $ — $ — Interest on lease liabilities 38 — — Total finance lease cost $ 86 $ — $ — Supplemental balance sheet information related to operating leases was as follows: As of May 31, (Dollars in millions) 2025 2024 Operating lease ROU assets $ 13,145 $ 7,290 Operating lease liabilities: Operating lease liabilities, current $ 1,914 $ 1,290 Operating lease liabilities, non-current 11,536 6,255 Total operating lease liabilities $ 13,450 $ 7,545 Weighted average remaining lease term 10 years 9 years Weighted average discount rate 5.3% 5.1% Supplemental cash flow information related to operating leases was as follows: Year Ended May 31, (in millions) 2025 2024 2023 Cash paid for amounts included in the measurement of operating lease liabilities $ 1,685 $ 1,168 $ 894 ROU assets obtained in exchange for operating lease obligations $ 6,970 $ 4,246 $ 1,957 As of May 31, 2025, ROU assets, net of $55 million of accumulated depreciation, current lease liabilities and non-current lease liabilities for our finance leases were $2.9 billion, $257 million and $2.7 billion, respectively. In fiscal 2025, we recorded finance lease ROU assets of $2.9 billion in exchange for finance lease obligations. Cash paid for amounts included in the measurement of finance lease liabilities was $27 million in fiscal 2025. As of May 31, 2025, the weighted average remaining lease term for finance leases was approximately fifteen years and the weighted average discount rate used for calculating finance lease obligations was 5.5%. We had no finance leases for the year ended and as of May 31, 2024.

12.INCOME TAXES Our 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 2025, 2024 and 2023 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).The following is a geographical breakdown of income before income taxes: Year Ended May 31, (in millions) 2025 2024 2023 Domestic $ 4,376 $ 3,023 $ 1,492 Foreign 9,784 8,718 7,634 Income before income taxes $ 14,160 $ 11,741 $ 9,126 The provision for income taxes consisted of the following: Year Ended May 31, (Dollars in millions) 2025 2024 2023 Current provision: Federal $ 1,172 $ 999 $ 625 State 196 420 398 Foreign 1,986 1,994 1,767 Total current provision $ 3,354 $ 3,413 $ 2,790 Deferred benefit: Federal $ (2,208 ) $ (2,020 ) $ (2,193 ) State (202 ) (280 ) (398 ) Foreign 773 161 424 Total deferred benefit $ (1,637 ) $ (2,139 ) $ (2,167 ) Total provision for income taxes $ 1,717 $ 1,274 $ 623 Effective income tax rate 12.1% 10.9% 6.8% The provision for income taxes differed from the amount computed by applying the federal statutory rate to our income before income taxes as follows: Year Ended May 31, (Dollars in millions) 2025 2024 2023 U.S. federal statutory tax rate 21.0% 21.0% 21.0% Tax provision at statutory rate $ 2,974 $ 2,466 $ 1,917 Foreign earnings at other than U.S.

Item 1C. Cybersecurity Our overall information security risk management approach is designed to enable us to assess, identify and manage major risk exposures, including from material risks from cybersecurity threats, in a timely manner. As part of our information security risk management program, we perform risk assessments in which we map and prioritize information security risks identified through the processes described below. These assessments inform our information security risk management strategies and oversight processes and we view cybersecurity risks as one of the key risk categories we face.We believe that Oracle is a target for computer hackers, cyber threats and other bad actors because our products and services store, retrieve, process and manage large amounts of data, including sensitive data. We and our vendors are regularly subject to attempts by third parties to identify and exploit product and service vulnerabilities, penetrate or bypass our security measures and gain unauthorized access to our or our customers’, partners’ and suppliers’ software, hardware and cloud offerings, networks and systems.If a large scale cyberattack or other major security incident results in unauthorized access to or modification or exfiltration of a significant amount of our customers’ or suppliers’ data, other external data, our own data or our IT systems, or if the services we provide to our customers are disrupted, or if our products or services are reported to have (or are perceived as having) security vulnerabilities, we could incur significant expenses and suffer substantial damage to our brand and reputation, and this could result in a material impact on our business. Refer to “Data Privacy, Cybersecurity and Intellectual Property Risks” in Risk Factors included in Item 1A within this Annual Report for additional discussion of the challenges we encounter with respect to cybersecurity risks.During fiscal 2025, Oracle experienced cybersecurity incidents that, to date, have not had a material impact on our business, including our business strategy, results of operations or financial condition.Our corporate security and information security programs are designed to help us prevent, prepare for, detect, respond to and recover from cybersecurity threats. We leverage industry standard security frameworks to evaluate our security controls.

15.LEGAL PROCEEDINGS Netherlands Privacy Class ActionOn 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 fixed 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.We 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.Oracle filed its statement of appeal with the Dutch Supreme Court on December 20, 2024, and TPC appeared in the proceedings on January 31, 2025.

14.EARNINGS PER SHAREBasic earnings per share is computed by dividing net income 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 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. The following table sets forth the computation of basic and diluted earnings per share: Year Ended May 31, (in millions, except per share data) 2025 2024 2023 Net income $ 12,443 $ 10,467 $ 8,503 Weighted-average common shares outstanding 2,789 2,744 2,696 Dilutive effect of employee stock plans 77 79 70 Dilutive weighted-average common shares outstanding 2,866 2,823 2,766 Basic earnings per share $ 4.46 $ 3.82 $ 3.15 Diluted earnings per share $ 4.34 $ 3.71 $ 3.07 Anti-dilutive stock awards excluded from calculation(1) 23 27 50 (1)These stock awards relate to anti-dilutive restricted service-based awards as calculated using the treasury stock method and contingently issuable shares pursuant to PSOs arrangements. Such shares could be dilutive in the future. See Note 11 for information regarding our stock-based compensation plans.