ORACLE CORP, 10-Q filed on 9/12/2023
Quarterly Report
v3.23.2
DOCUMENT AND ENTITY INFORMATION - shares
 3 Months Ended
Aug. 31, 2023
Sep. 07, 2023
Document Information [Line Items]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Aug. 31, 2023  
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2024  
Entity Registrant Name Oracle Corporation  
Entity Central Index Key 0001341439  
Current Fiscal Year End Date --05-31  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding (in shares)   2,739,821,000
Entity File Number 001-35992  
Entity Tax Identification Number 54-2185193  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Address, Address Line One 2300 Oracle Way  
Entity Address, City or Town Austin  
Entity Address State Or Province TX  
Entity Address, Postal Zip Code 78741  
City Area Code 737  
Local Phone Number 867-1000  
Entity Incorporation, State or Country Code DE  
Document Quarterly Report true  
Document Transition Report false  
Common Stock [Member]    
Document Information [Line Items]    
Title of 12(b) Security Common Stock, par value $0.01 per share  
Trading Symbol ORCL  
Security Exchange Name NYSE  
3.125% senior notes due July 2025 [Member]    
Document Information [Line Items]    
Title of 12(b) Security 3.125% senior notes due July 2025  
Security Exchange Name NYSE  
No Trading Symbol Flag true  
v3.23.2
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Millions
Aug. 31, 2023
May 31, 2023
Current assets:    
Cash and cash equivalents $ 11,613 $ 9,765
Marketable securities 470 422
Trade receivables, net of allowances for credit losses of $445 and $428 as of August 31, 2023 and May 31, 2023, respectively 6,519 6,915
Prepaid expenses and other current assets 3,564 3,902
Total current assets 22,166 21,004
Non-current assets:    
Property, plant and equipment, net 17,644 17,069
Intangible assets, net 9,074 9,837
Goodwill, net 62,206 62,261
Deferred tax assets 12,243 12,226
Other non-current assets 13,329 11,987
Total non-current assets 114,496 113,380
Total assets 136,662 134,384
Current liabilities:    
Notes payable and other borrowings, current 4,499 4,061
Accounts payable 1,034 1,204
Accrued compensation and related benefits 1,818 2,053
Deferred revenues 11,120 8,970
Other current liabilities 6,886 6,802
Total current liabilities 25,357 23,090
Non-current liabilities:    
Notes payable and other borrowings, non-current 84,442 86,420
Income taxes payable 11,201 11,077
Deferred tax liabilities 5,281 5,772
Other non-current liabilities 7,540 6,469
Total non-current liabilities 108,464 109,738
Commitments and contingencies
Oracle Corporation stockholders' deficit:    
Preferred stock, $0.01 par value—authorized: 1.0 shares; outstanding: none 0 0
Common stock, $0.01 par value and additional paid in capital - authorized: 11,000 shares; outstanding: 2,739 shares and 2,713 shares as of August 31, 2023 and May 31, 2023, respectively 30,295 30,215
Accumulated deficit (26,428) (27,620)
Accumulated other comprehensive loss (1,497) (1,522)
Total Oracle Corporation stockholders' deficit 2,370 1,073
Noncontrolling interests 471 483
Total stockholders' deficit 2,841 1,556
Total liabilities and stockholders' deficit $ 136,662 $ 134,384
v3.23.2
CONDENSED CONSOLIDATED BALANCE SHEETS PARENTHETICAL - USD ($)
$ in Millions
Aug. 31, 2023
May 31, 2023
Statement of Financial Position [Abstract]    
Allowance for credit losses $ 445 $ 428
Preferred stock par value per share $ 0.01 $ 0.01
Preferred stock shares authorized 1,000,000 1,000,000
Preferred stock shares outstanding 0 0
Common stock par value per share $ 0.01 $ 0.01
Common stock shares authorized 11,000,000,000 11,000,000,000
Common stock shares outstanding 2,739,000,000 2,713,000,000
v3.23.2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
shares in Millions, $ in Millions
 3 Months Ended
Aug. 31, 2023
Aug. 31, 2022
Revenues:    
Cloud services and license support $ 9,547 $ 8,417
Cloud license and on-premise license 809 904
Hardware 714 763
Services 1,383 1,361
Total revenues 12,453 11,445
Operating expenses:    
Cloud services and license support [1] 2,179 1,735
Hardware [1] 219 249
Services [1] 1,212 1,053
Sales and marketing [1] 2,026 2,177
Research and development 2,216 2,093
General and administrative 393 411
Amortization of intangible assets 763 919
Acquisition related and other 11 41
Restructuring 138 144
Total operating expenses 9,157 8,822
Operating income 3,296 2,623
Interest expense (872) (787)
Non-operating expenses, net (49) (180)
Income before income taxes 2,375 1,656
Benefit from (provision for) income taxes 45 (108)
Net income $ 2,420 $ 1,548
Earnings per share:    
Basic $ 0.89 $ 0.58
Diluted $ 0.86 $ 0.56
Weighted average common shares outstanding:    
Basic 2,728 2,685
Diluted 2,823 2,747
[1] Exclusive of amortization of intangible assets, which is shown separately.
v3.23.2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
$ in Millions
 3 Months Ended
Aug. 31, 2023
Aug. 31, 2022
Statement of Comprehensive Income [Abstract]    
Net income $ 2,420 $ 1,548
Other comprehensive income (loss), net of tax:    
Net foreign currency translation losses (44) (288)
Net unrealized gains on cash flow hedges 72 17
Other, net (3) (1)
Total other comprehensive income (loss), net 25 (272)
Comprehensive income $ 2,445 $ 1,276
v3.23.2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT) - USD ($)
$ in Millions
Total
Common Stock and Additional Paid in Capital
Accumulated Deficit
Other Stockholders' Deficit, Net
Balance, beginning of period at May. 31, 2022   $ 26,808 $ (31,336) $ (1,240)
Other comprehensive income (loss), net $ (272)     (272)
Common stock issued   515    
Stock-based compensation   750    
Repurchases of common stock (559) (73) (486)  
Shares repurchased for tax withholdings upon vesting of restricted stock-based awards   (829)    
Cash dividends declared     (860)  
Net income     1,548  
Other, net   53   (27)
Balance, end of period at Aug. 31, 2022 $ (5,449) 27,224 (31,134) (1,539)
Cash dividends declared per common share $ 0.32      
Balance, beginning of period at May. 31, 2023 $ 1,556 30,215 (27,620) (1,039)
Other comprehensive income (loss), net 25     25
Common stock issued   308    
Stock-based compensation   849    
Repurchases of common stock (150) (13) (137)  
Shares repurchased for tax withholdings upon vesting of restricted stock-based awards   (1,060)    
Cash dividends declared     (1,091)  
Net income     2,420  
Other, net   (4)   (12)
Balance, end of period at Aug. 31, 2023 $ 2,841 $ 30,295 $ (26,428) $ 1,026
Cash dividends declared per common share $ 0.4      
v3.23.2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Millions
 3 Months Ended
Aug. 31, 2023
Aug. 31, 2022
Cash flows from operating activities:    
Net income $ 2,420 $ 1,548
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation 712 547
Amortization of intangible assets 763 919
Deferred income taxes (517) (344)
Stock-based compensation 849 750
Other, net 169 156
Changes in operating assets and liabilities, net of effects from acquisitions:    
Decrease in trade receivables, net 380 761
Decrease in prepaid expenses and other assets 269 44
Decrease in accounts payable and other liabilities (457) (166)
Increase in income taxes payable 69 145
Increase in deferred revenues 2,317 2,034
Net cash provided by operating activities 6,974 6,394
Cash flows from investing activities:    
Purchases of marketable securities and other investments (333) (57)
Proceeds from sales and maturities of marketable securities and other investments 85 138
Acquisitions, net of cash acquired 0 (27,798)
Capital expenditures (1,314) (1,719)
Net cash used for investing activities (1,562) (29,436)
Cash flows from financing activities:    
Payments for repurchases of common stock (150) (552)
Proceeds from issuances of common stock 308 515
Shares repurchased for tax withholdings upon vesting of restricted stock-based awards (1,060) (829)
Payments of dividends to stockholders (1,091) (860)
Repayments of commercial paper (562) 0
Proceeds from issuances of senior notes and other borrowings, net of issuance costs 0 20,046
Repayments of senior notes and other borrowings (1,000) (5,883)
Other, net 27 (127)
Net cash (used for) provided by financing activities (3,528) 12,310
Effect of exchange rate changes on cash and cash equivalents (36) (203)
Net increase (decrease) in cash and cash equivalents 1,848 (10,935)
Cash and cash equivalents at beginning of period 9,765 21,383
Cash and cash equivalents at end of period 11,613 10,448
Non-cash financing activities:    
Fair values of stock awards assumed in connection with acquisitions $ 0 $ 55
v3.23.2
Pay vs Performance Disclosure - USD ($)
$ in Millions
 3 Months Ended
Aug. 31, 2023
Aug. 31, 2022
Pay vs Performance Disclosure    
Net Income (Loss) $ 2,420 $ 1,548
v3.23.2
Insider Trading Arrangements
 3 Months Ended
Aug. 31, 2023
shares
Trading Arrangements, by Individual  
Material Terms of Trading Arrangement

Our Section 16 officers and directors (as defined in Rule 16a-1 under the Exchange Act) may from time to time enter into plans for the purchase or sale of Oracle stock that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act. During the quarter ended August 31, 2023, the following Section 16 officer adopted, modified or terminated “Rule 10b5-1 trading arrangements” (as defined in Item 408 under Regulation S-K of the Exchange Act):

•
Safra Catz, our Chief Executive Officer and Director, adopted a new trading plan on August 1, 2023. The plan’s maximum duration is until October 4, 2024, and first trades will not occur until January 2, 2024, at the earliest. The trading plan is intended to permit Ms. Catz to exercise and sell two tranches of stock options set to expire in 2024: (i) 2,250,000 stock options expiring on July 24, 2024; and (ii) 500,000 stock options expiring on October 5, 2024.

The Rule 10b5-1 trading arrangement described above was adopted and precleared in accordance with Oracle’s Insider Trading Policy and actual sale transactions made pursuant to such trading arrangements will be disclosed publicly in future Section 16 filings with the SEC.
Safra Catz [Member]  
Trading Arrangements, by Individual  
Name Safra Catz
Title Chief Executive Officer and Director
Rule 10b5-1 Arrangement Adopted true
Adoption Date August 1, 2023
Stock Options Expiring on July 24, 2024 [Member] | Safra Catz [Member]  
Trading Arrangements, by Individual  
Aggregate Available 2,250,000
Stock Options Expiring on October 5, 2024 [Member] | Safra Catz [Member]  
Trading Arrangements, by Individual  
Aggregate Available 500,000
v3.23.2
BASIS OF PRESENTATION AND OTHER
 3 Months Ended
Aug. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
BASIS OF PRESENTATION AND OTHER
1.
BASIS OF PRESENTATION AND OTHER

Basis of Presentation

We have prepared the condensed consolidated financial statements included herein pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and regulations. However, we believe that the disclosures herein are adequate to ensure the information presented is not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2023.

We believe that all necessary adjustments, which consisted only of normal recurring items, have been included in the accompanying financial statements to present fairly the results of the interim periods. The results of operations for the interim periods presented are not necessarily indicative of the operating results to be expected for any subsequent interim period or for the fiscal year ending May 31, 2024.

During the first quarter of fiscal 2024, we finalized our adoption of Accounting Standards Update 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting and subsequent amendments to the initial guidance (collectively, Topic 848), which had no material impact to our current or historical condensed consolidated financial statements. There have been no changes to our significant accounting policies as disclosed in our Annual Report on Form 10-K for the fiscal year ended May 31, 2023 that had a significant impact on our condensed consolidated financial statements or notes thereto as of and for the three months ended August 31, 2023.

Cash, Cash Equivalents and Restricted Cash

Restricted cash that was included within cash and cash equivalents as presented within our condensed consolidated balance sheets as of August 31, 2023 and May 31, 2023 and our condensed consolidated statements of cash flows for the three months ended August 31, 2023 and 2022 was nominal.

Remaining Performance Obligations from Contracts with Customers

Trade receivables, net of allowance for credit losses, and deferred revenues are reported net of related uncollected deferred revenues in our condensed consolidated balance sheets as of August 31, 2023 and May 31, 2023. The revenues recognized during the three months ended August 31, 2023 and 2022, respectively, that were included in the opening deferred revenues balances as of May 31, 2023 and 2022, respectively, were approximately $3.9 billion and $3.5 billion, respectively. Revenues recognized from performance obligations satisfied in prior periods and impairment losses recognized on our receivables were immaterial in each of the three months ended August 31, 2023 and 2022.

Remaining performance obligations, as defined in Note 1 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2023, were $64.9 billion as of August 31, 2023, approximately 49% of which we expect to recognize as revenues over the next twelve months, 35% over the subsequent month 13 to month 36 and the remainder thereafter.

Sales of Financing Receivables

We offer certain of our customers the option to acquire certain of our cloud and license, hardware 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. Financing receivables sold to financial institutions were $561 million and $927 million for the three months ended August 31, 2023 and 2022, respectively.

Non-Marketable Investments

Our non-marketable debt investments and equity securities and related instruments totaled $1.7 billion and $1.6 billion as of August 31, 2023 and May 31, 2023, respectively, and are included in other non-current assets in the accompanying condensed consolidated balance sheets and are subject to periodic impairment reviews. Certain of these non-marketable equity securities and related instruments are adjusted for observable price changes from orderly transactions. The majority of the non-marketable investments held as of these dates were with a related party entity for which we follow the equity method of accounting. We are also a counterparty to certain options to acquire additional equity interests in that entity at various times through June 2025 and we could obtain control of that entity should such options be exercised.

Acquisition Related and Other Expenses

Acquisition related and other expenses primarily consist of personnel related costs for transitional and certain other employees, certain business combination adjustments, including adjustments after the measurement period has ended, and certain other operating items, net.

 

 

 

Three Months Ended
August 31,

 

(in millions)

 

2023

 

 

2022

 

Transitional and other employee related costs

 

$

6

 

 

$

17

 

Business combination adjustments, net

 

 

1

 

 

 

5

 

Other, net

 

 

4

 

 

 

19

 

Total acquisition related and other expenses

 

$

11

 

 

$

41

 

Non-Operating Expenses, net

Non-operating 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 losses related to equity investments, including losses attributable to equity method investments and net other income and expenses, including net unrealized gains and losses from our investment portfolio related to our deferred compensation plan and non-service net periodic pension income and losses.

 

 

 

Three Months Ended
August 31,

 

(in millions)

 

2023

 

 

2022

 

Interest income

 

$

136

 

 

$

38

 

Foreign currency losses, net

 

 

(82

)

 

 

(71

)

Noncontrolling interests in income

 

 

(37

)

 

 

(38

)

Losses from equity investments, net

 

 

(118

)

 

 

(86

)

Other income (expenses), net

 

 

52

 

 

 

(23

)

Total non-operating expenses, net

 

$

(49

)

 

$

(180

)

 
v3.23.2
ACQUISITIONS
 3 Months Ended
Aug. 31, 2023
Business Combinations [Abstract]  
ACQUISITIONS
2.
ACQUISITIONS

Fiscal 2023 Acquisition of Cerner Corporation

On June 8, 2022, we completed our acquisition of Cerner Corporation (Cerner), a provider of digital information systems used within hospitals and health systems that are designed to enable medical professionals to deliver better healthcare to individual patients and communities.

The total purchase price for Cerner was $28.2 billion, which consisted of $28.2 billion in cash and $55 million for the fair values of restricted stock-based awards and stock options assumed. In allocating the purchase price based on estimated fair values, we recorded approximately $18.6 billion of goodwill, $12.0 billion of identifiable intangible assets and $2.4 billion of net tangible liabilities. See Note 2 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2023 for additional information regarding our acquisition of Cerner.

Other Fiscal 2023 Acquisitions

During fiscal 2023, we acquired certain other companies and purchased certain technology and development assets primarily to expand our products and services offerings. These acquisitions were not significant individually or in the aggregate to our consolidated financial statements.
v3.23.2
FAIR VALUE MEASUREMENTS
 3 Months Ended
Aug. 31, 2023
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS
3.
FAIR VALUE MEASUREMENTS

We perform fair value measurements in accordance with FASB Accounting Standards Codification (ASC) 820, Fair Value Measurement. 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.

ASC 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:

•
Level 1: quoted prices in active markets for identical assets or liabilities;
•
Level 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
•
Level 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.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Our assets and liabilities measured at fair value on a recurring basis consisted of the following (Level 1 and Level 2 inputs are defined above):

 

 

 

August 31, 2023

 

 

May 31, 2023

 

 

 

Fair Value Measurements
Using Input Types

 

 

 

 

 

Fair Value Measurements
Using Input Types

 

 

 

 

(in millions)

 

Level 1

 

 

Level 2

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

3,489

 

 

$

—

 

 

$

3,489

 

 

$

1,694

 

 

$

—

 

 

$

1,694

 

Time deposits and other

 

 

160

 

 

 

493

 

 

 

653

 

 

 

180

 

 

 

288

 

 

 

468

 

Derivative financial instruments

 

 

—

 

 

 

174

 

 

 

174

 

 

 

—

 

 

 

102

 

 

 

102

 

Total assets

 

$

3,649

 

 

$

667

 

 

$

4,316

 

 

$

1,874

 

 

$

390

 

 

$

2,264

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative financial instruments

 

$

—

 

 

$

112

 

 

$

112

 

 

$

—

 

 

$

126

 

 

$

126

 

 

Our cash equivalents and marketable securities investments consist of money market funds, time deposits, marketable equity securities and certain other securities. Marketable securities as presented per our condensed consolidated balance sheets included debt securities with original maturities at the time of purchase greater than three months and the remainder of the debt securities were included in cash and cash equivalents. We classify our marketable debt securities as available-for-sale debt securities at the time of purchase and reevaluate such classification as of each balance sheet date. As of August 31, 2023 and May 31, 2023, all of our marketable debt securities investments mature within one year. Our 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.

Based on the trading prices of the $88.9 billion and $89.9 billion of senior notes and other long-term borrowings and the related fair value hedges that we had outstanding as of August 31, 2023 and May 31, 2023, respectively, the estimated fair values of the senior notes and other long-term borrowings and the related fair value hedges using Level 2 inputs at August 31, 2023 and May 31, 2023 were $78.7 billion and $79.9 billion, respectively.
v3.23.2
INTANGIBLE ASSETS AND GOODWILL
 3 Months Ended
Aug. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
INTANGIBLE ASSETS AND GOODWILL
4.
INTANGIBLE ASSETS AND GOODWILL

The changes in intangible assets for fiscal 2024 and the net book value of intangible assets as of August 31, 2023 and May 31, 2023 were as follows:

 

 

 

Intangible Assets, Gross

 

 

Accumulated Amortization

 

 

Intangible Assets, Net

 

(in millions)

 

May 31,
 2023

 

 

Additions &
Adjustments, net

 

 

August 31,
 2023

 

 

May 31,
 2023

 

 

Expense

 

 

August 31,
 2023

 

 

May 31,
 2023

 

 

August 31,
 2023

 

Developed technology

 

$

4,300

 

 

$

—

 

 

$

4,300

 

 

$

(2,407

)

 

$

(168

)

 

$

(2,575

)

 

$

1,893

 

 

$

1,725

 

Cloud services and license support agreements and related relationships

 

 

9,456

 

 

 

—

 

 

 

9,456

 

 

 

(5,579

)

 

 

(269

)

 

 

(5,848

)

 

 

3,877

 

 

 

3,608

 

Cloud license and on-premise license agreements and related relationships

 

 

2,688

 

 

 

—

 

 

 

2,688

 

 

 

(697

)

 

 

(116

)

 

 

(813

)

 

 

1,991

 

 

 

1,875

 

Other

 

 

3,582

 

 

 

—

 

 

 

3,582

 

 

 

(1,506

)

 

 

(210

)

 

 

(1,716

)

 

 

2,076

 

 

 

1,866

 

Total intangible assets, net

 

$

20,026

 

 

$

—

 

 

$

20,026

 

 

$

(10,189

)

 

$

(763

)

 

$

(10,952

)

 

$

9,837

 

 

$

9,074

 

 

 

As of August 31, 2023, estimated future amortization expenses related to intangible assets were as follows (in millions):

 

Remainder of fiscal 2024

 

$

2,231

 

Fiscal 2025

 

 

2,283

 

Fiscal 2026

 

 

1,620

 

Fiscal 2027

 

 

664

 

Fiscal 2028

 

 

635

 

Fiscal 2029

 

 

561

 

Thereafter

 

 

1,080

 

Total intangible assets, net

 

$

9,074

 

 

The changes in the carrying amounts of goodwill, net, which is generally not deductible for tax purposes, for our operating segments for the three months ended August 31, 2023 were as follows:

 

(in millions)

 

Cloud and License

 

 

Hardware

 

 

Services

 

 

Total Goodwill, net

 

Balances as of May 31, 2023

 

$

57,060

 

 

$

2,732

 

 

$

2,469

 

 

$

62,261

 

Goodwill adjustments, net(1)

 

 

(13

)

 

 

—

 

 

 

(42

)

 

 

(55

)

Balances as of August 31, 2023

 

$

57,047

 

 

$

2,732

 

 

$

2,427

 

 

$

62,206

 

 

(1)
Amounts include any changes in goodwill balances for the period presented that resulted from foreign currency translations and certain other adjustments.
v3.23.2
RESTRUCTURING ACTIVITIES
 3 Months Ended
Aug. 31, 2023
Restructuring and Related Activities [Abstract]  
RESTRUCTURING ACTIVITIES
5.
RESTRUCTURING ACTIVITIES

Fiscal 2024 Oracle Restructuring Plan

During the first quarter of 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). The total estimated restructuring costs associated with the 2024 Restructuring Plan are up to $609 million and will be recorded to the restructuring expense line item within our condensed consolidated statements of operations as they are incurred. We recorded $153 million of restructuring expenses in connection with the 2024 Restructuring Plan in the first three months of fiscal 2024 and we expect to incur the majority of the estimated remaining $456 million through the end of fiscal 2025. Any changes to the estimates of executing the 2024 Restructuring Plan will be reflected in our future results of operations.

Summary of All Plans

 

 

 

Accrued

 

 

Three Months Ended August 31, 2023

Accrued

 

 

Total
Costs

 

 

Total
Expected

 

(in millions)

 

May 31,
2023(2)

 

 

Initial
Costs(3)

 

 

Adj. to
Cost(4)

 

 

Cash
Payments

 

 

August 31,
2023(2)

 

 

Accrued
to Date

 

 

Program
Costs

 

2024 Restructuring Plan(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cloud and license

 

$

—

 

 

$

79

 

 

$

—

 

 

$

(23

)

 

$

56

 

 

$

79

 

 

$

184

 

Hardware

 

 

—

 

 

 

2

 

 

 

—

 

 

 

(1

)

 

 

1

 

 

 

2

 

 

 

5

 

Services

 

 

—

 

 

 

24

 

 

 

—

 

 

 

(13

)

 

 

11

 

 

 

24

 

 

 

187

 

Other

 

 

—

 

 

 

48

 

 

 

—

 

 

 

(22

)

 

 

26

 

 

 

48

 

 

 

233

 

Total 2024 Restructuring Plan

 

$

—

 

 

$

153

 

 

$

—

 

 

$

(59

)

 

$

94

 

 

$

153

 

 

$

609

 

Total other restructuring plans(5)

 

$

199

 

 

$

—

 

 

$

(15

)

 

$

(48

)

 

$

136

 

 

 

 

 

 

 

Total restructuring plans

 

$

199

 

 

$

153

 

 

$

(15

)

 

$

(107

)

 

$

230

 

 

 

 

 

 

 

 

(1)
Restructuring 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.
(2)
As of August 31, 2023 and May 31, 2023, substantially all restructuring liabilities have been recorded in other current liabilities within our condensed consolidated balance sheets.
(3)
Costs recorded for the respective restructuring plans during the period presented.
(4)
All plan adjustments were changes in estimates whereby increases and decreases in costs were generally recorded to operating expenses in the period of adjustments.
(5)
Other 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 condensed consolidated statements of operations was not significant.
v3.23.2
DEFERRED REVENUES
 3 Months Ended
Aug. 31, 2023
Deferred Revenue Disclosure [Abstract]  
DEFERRED REVENUES
6.
DEFERRED REVENUES

Deferred revenues consisted of the following:

 

(in millions)

 

August 31,
 2023

 

 

May 31,
 2023

 

Cloud services and license support

 

$

9,911

 

 

$

7,983

 

Hardware

 

 

686

 

 

 

535

 

Services

 

 

469

 

 

 

400

 

Cloud license and on-premise license

 

 

54

 

 

 

52

 

Deferred revenues, current

 

 

11,120

 

 

 

8,970

 

Deferred revenues, non-current (in other non-current liabilities)

 

 

1,146

 

 

 

968

 

Total deferred revenues

 

$

12,266

 

 

$

9,938

 

 

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.
v3.23.2
STOCKHOLDERS' EQUITY (DEFICIT)
 3 Months Ended
Aug. 31, 2023
Stockholders' Equity Note [Abstract]  
STOCKHOLDERS' EQUITY (DEFICIT)
7.
STOCKHOLDERS’ EQUITY (DEFICIT)

Common Stock Repurchases

Our Board of Directors has approved a program for us to repurchase shares of our common stock. As of August 31, 2023, approximately $8.0 billion remained available for stock repurchases pursuant to our stock repurchase program. We repurchased 1.3 million shares for $150 million during the three months ended August 31, 2023 and 7.5 million shares for $559 million during the three months ended August 31, 2022 under the stock repurchase program.

Our stock repurchase authorization does not have an expiration date and the pace of our repurchase activity will depend on factors such as our working capital needs, our cash requirements for 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.

Dividends on Common Stock

In September 2023, our Board of Directors declared a quarterly cash dividend of $0.40 per share of our outstanding common stock. The dividend is payable on October 26, 2023 to stockholders of record as of the close of business on October 12, 2023. Future declarations of dividends and the establishment of future record and payment dates are subject to the final determination of our Board of Directors.

Fiscal 2024 Stock‑Based Awards Activity and Compensation Expense

During the first quarter of fiscal 2024, we issued 2 million restricted stock-based units (RSUs), all of which are subject to service-based vesting restrictions. These fiscal 2024 stock-based award issuances were partially offset by stock-based award forfeitures and cancellations of 1 million shares during the first quarter of fiscal 2024.

The RSUs that were granted during the three months ended August 31, 2023 have similar vesting restrictions and contractual lives and were valued using methodologies of a similar nature as those described in Note 12 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2023.

Stock-based compensation expense is included in the following operating expense line items in our condensed consolidated statements of operations:

 

 

Three Months Ended
August 31,

 

(in millions)

 

2023

 

 

2022

 

Cloud services and license support

 

$

111

 

 

$

91

 

Hardware

 

 

5

 

 

 

4

 

Services

 

 

34

 

 

 

25

 

Sales and marketing

 

 

135

 

 

 

124

 

Research and development

 

 

484

 

 

 

422

 

General and administrative

 

 

80

 

 

 

84

 

Total stock-based compensation

 

$

849

 

 

$

750

 
v3.23.2
INCOME TAXES
 3 Months Ended
Aug. 31, 2023
Income Tax Disclosure [Abstract]  
INCOME TAXES
8.
INCOME TAXES

Our effective tax rates for each of the periods presented are the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. Our benefit from (provision for) income taxes varied from the tax computed at the U.S. federal statutory income tax rate for the periods presented 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. Our effective tax benefit rate was (1.9%) for the three months ended August 31, 2023, and our effective tax rate was 6.5% for the three months ended August 31, 2022.

Our net deferred tax assets were $7.0 billion and $6.5 billion as of August 31, 2023 and May 31, 2023, 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.

Domestically, U.S. federal and state taxing authorities are currently examining income tax returns of Oracle and various acquired entities for years through fiscal 2021. 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 2007, and we are no longer subject to audit for those periods.

Internationally, 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 2023. Many of the relevant tax years are at an advanced stage in examination or subsequent controversy resolution processes. With some exceptions, we are generally no longer subject to tax examinations in non-U.S. jurisdictions for years prior to fiscal 2001.

We 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, Germany, India, Indonesia, Israel, Italy, Mexico, New Zealand, 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.

We 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.
v3.23.2
SEGMENT INFORMATION
 3 Months Ended
Aug. 31, 2023
Segment Reporting [Abstract]  
SEGMENT INFORMATION
9.
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 that is 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. Cloud license and on-premise license revenues represent fees earned from granting customers licenses, generally on a perpetual basis, to use our database and middleware and our applications software products within cloud and on-premise 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. In each fiscal year, our cloud and license business’ contractual activities 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.

Our 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.

Our services business provides services to customers and partners to help maximize the performance of their investments in Oracle applications and infrastructure technologies.

We do not track our assets for each business. Consequently, it is not practical to show assets by operating segment.

The following table presents summary results for each of our three businesses:

 

 

 

Three Months Ended
August 31,

 

(in millions)

 

2023

 

 

2022

 

Cloud and license:

 

 

 

 

 

 

Revenues

 

$

10,356

 

 

$

9,321

 

Cloud services and license support expenses

 

 

2,040

 

 

 

1,620

 

Sales and marketing expenses

 

 

1,784

 

 

 

1,930

 

Margin(1)

 

$

6,532

 

 

$

5,771

 

Hardware:

 

 

 

 

 

 

Revenues

 

$

714

 

 

$

763

 

Hardware products and support expenses

 

 

211

 

 

 

243

 

Sales and marketing expenses

 

 

70

 

 

 

79

 

Margin(1)

 

$

433

 

 

$

441

 

Services:

 

 

 

 

 

 

Revenues

 

$

1,383

 

 

$

1,361

 

Services expenses

 

 

1,145

 

 

 

1,007

 

Margin(1)

 

$

238

 

 

$

354

 

Totals:

 

 

 

 

 

 

Revenues

 

$

12,453

 

 

$

11,445

 

Expenses

 

 

5,250

 

 

 

4,879

 

Margin(1)

 

$

7,203

 

 

$

6,566

 

 

(1)
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 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 condensed consolidated statements of operations.

The following table reconciles total operating segment margin to income before income taxes:

 

 

 

Three Months Ended
August 31,

 

(in millions)

 

2023

 

 

2022

 

Total margin for operating segments

 

$

7,203

 

 

$

6,566

 

Research and development

 

 

(2,216

)

 

 

(2,093

)

General and administrative

 

 

(393

)

 

 

(411

)

Amortization of intangible assets

 

 

(763

)

 

 

(919

)

Acquisition related and other

 

 

(11

)

 

 

(41

)

Restructuring

 

 

(138

)

 

 

(144

)

Stock-based compensation for operating segments

 

 

(285

)

 

 

(244

)

Expense allocations and other, net

 

 

(101

)

 

 

(91

)

Interest expense

 

 

(872

)

 

 

(787

)

Non-operating expenses, net

 

 

(49

)

 

 

(180

)

Income before income taxes

 

$

2,375

 

 

$

1,656

 

 

Disaggregation of Revenues

We 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 condensed consolidated statements of operations.

The following table is a summary of our total revenues by geographic region:

 

 

 

Three Months Ended
August 31,

 

(in millions)

 

2023

 

 

2022

 

Americas

 

$

7,841

 

 

$

7,192

 

EMEA(1)

 

 

3,005

 

 

 

2,691

 

Asia Pacific

 

 

1,607

 

 

 

1,562

 

Total revenues

 

$

12,453

 

 

$

11,445

 

 

(1)
Comprised of Europe, the Middle East and Africa

The following table presents our cloud services and license support revenues by offerings:

 

 

 

Three Months Ended
August 31,

 

(in millions)

 

2023

 

 

2022

 

Cloud services

 

$

4,635

 

 

$

3,579

 

License support

 

 

4,912

 

 

 

4,838

 

Total cloud services and license support revenues

 

$

9,547

 

 

$

8,417

 

The following table presents our cloud services and license support revenues by applications and infrastructure ecosystems:

 

 

 

Three Months Ended
August 31,

 

(in millions)

 

2023

 

 

2022

 

Applications cloud services and license support

 

$

4,471

 

 

$

4,016

 

Infrastructure cloud services and license support

 

 

5,076

 

 

 

4,401

 

Total cloud services and license support revenues

 

$

9,547

 

 

$

8,417

 
v3.23.2
EARNINGS PER SHARE
 3 Months Ended
Aug. 31, 2023
Earnings Per Share [Abstract]  
EARNINGS PER SHARE
10.
EARNINGS PER SHARE

Basic 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 employee stock

purchase plan as applicable pursuant to the treasury stock method. The following table sets forth the computation of basic and diluted earnings per share:

 

 

 

Three Months Ended
August 31,

 

(in millions, except per share data)

 

2023

 

 

2022

 

Net income

 

$

2,420

 

 

$

1,548

 

Weighted-average common shares outstanding

 

 

2,728

 

 

 

2,685

 

Dilutive effect of employee stock plans

 

 

95

 

 

 

62

 

Dilutive weighted-average common shares outstanding

 

 

2,823

 

 

 

2,747

 

Basic earnings per share

 

$

0.89

 

 

$

0.58

 

Diluted earnings per share

 

$

0.86

 

 

$

0.56

 

Shares subject to anti-dilutive restricted stock-based awards and stock options excluded from calculation(1)

 

 

27

 

 

 

71

 

 

(1)
These weighted shares relate to anti-dilutive restricted service based stock-based awards as calculated using the treasury stock method and contingently issuable shares pursuant to performance stock option arrangements. Such shares could be dilutive in the future.
v3.23.2
LEGAL PROCEEDINGS
 3 Months Ended
Aug. 31, 2023
Legal Proceedings [Abstract]  
LEGAL PROCEEDINGS
11.
LEGAL PROCEEDINGS

Derivative Litigation Concerning Oracle’s NetSuite Acquisition

On May 3 and July 18, 2017, two alleged stockholders filed separate derivative lawsuits in the Court of Chancery of the State of Delaware, purportedly on Oracle’s behalf. Thereafter, the court consolidated the two derivative cases and designated the July 18, 2017 complaint as the operative complaint. The consolidated lawsuit was brought against all the then-current members and one former member of our Board of Directors, and Oracle as a nominal defendant. Plaintiff alleged that the defendants breached their fiduciary duties by causing Oracle to agree to purchase NetSuite Inc. at an excessive price. The complaint sought (and the operative complaint continues to seek) declaratory relief, unspecified monetary damages (including interest), and attorneys’ fees and costs. The defendants filed a motion to dismiss, which the court denied on March 19, 2018.

On May 4, 2018, our Board of Directors established a Special Litigation Committee (SLC) to investigate the allegations in this derivative action. Three non-employee directors served on the SLC. On August 15, 2019, the SLC filed a letter with the court, stating that the SLC believed that plaintiff should be allowed to proceed with the derivative litigation on behalf of Oracle. After the SLC advised the Board that it had fulfilled its duties and obligations, the Board withdrew the SLC’s authority, except that the SLC maintained certain authority to respond to discovery requests in the litigation.

After plaintiff filed the July 18, 2017 complaint, an additional plaintiff joined the case. Plaintiffs filed several amended complaints, and filed their most recent amended complaint on December 11, 2020. The operative complaint asserts claims for breach of fiduciary duty against our Chief Executive Officer, our Chief Technology Officer, the estate of Mark Hurd (our former Chief Executive Officer who passed away on October 18, 2019), and two other members of our Board of Directors. Oracle is named as a nominal defendant. On December 11, 2020, the estate of Mark Hurd and the two other members of our Board of Directors moved to dismiss this complaint. On June 21, 2021, the court granted this motion as to the estate of Mark Hurd and one Board member and denied the motion as to the other Board member, who filed an answer to the complaint on August 9, 2021. On December 28, 2020, our Chief Executive Officer, our Chief Technology Officer, and Oracle as a nominal defendant filed answers to the operative complaint.

Trial commenced on July 18, 2022, and has concluded. On November 18, 2022, the court held a final hearing on the parties’ post-trial briefing. On December 27, 2022, the court “so ordered” a stipulation, dismissing the Board member from this action. On May 12, 2023, the court issued its trial ruling, finding for defendants and rejecting plaintiffs’ claims. On May 22, 2023, plaintiffs filed a motion for attorneys’ fees, claiming that this lawsuit had

conferred a benefit on Oracle. By letter dated May 23, 2023, the court informed the parties that a final order and judgment would be entered after the court resolved plaintiffs’ motion for attorneys’ fees. On July 28, 2023, nominal defendant Oracle filed an opposition to plaintiffs’ fee application. No schedule has been set for plaintiffs to file a reply. Because the court has not yet ruled on plaintiffs’ motion, no judgment has been entered, and plaintiffs time to file a notice of appeal has not yet begun to run. On May 31, 2023, defendants filed a bill of costs, as the prevailing party. This motion is fully briefed, and the court has not yet ruled on this motion.

While Oracle continues to evaluate these claims, we do not believe this litigation will have a material impact on our financial position or results of operations.

Derivative Litigation Concerning Oracle’s Cloud Business

On February 12 and May 6, 2019, two stockholder derivative lawsuits were filed in the United States District Court for the Northern District of California. The cases were consolidated, and on July 8, 2019, a single plaintiff filed a consolidated complaint. The consolidated complaint brought various claims relating to a Rule 10b-5 class action that was filed in the same court on August 10, 2018, and which was settled for a payment by the Company of $17,500,000. That matter is now concluded. In the Rule 10b-5 class action, plaintiff alleged Oracle and certain Oracle officers made or were responsible for false and misleading statements regarding Oracle’s cloud business.

Plaintiff in the derivative action filed an amended complaint on June 4, 2021. The derivative suit is brought by an alleged stockholder of Oracle, purportedly on Oracle’s behalf, against our Chief Technology Officer, our Chief Executive Officer, and the estate of Mark Hurd. Plaintiff claims that the alleged actions described in the 10b-5 class action caused harm to Oracle, including harming Oracle because Oracle allegedly repurchased its own stock at an inflated price. Plaintiff also claims that defendants violated their fiduciary duties of candor, good faith, loyalty, and due care by failing to prevent this alleged harm. Plaintiff also brings derivative claims for violations of federal securities laws. Plaintiff seeks a ruling that this case may proceed as a derivative action, a finding that defendants are liable for breaching their fiduciary duties, an award of damages to Oracle, an order directing defendants to enact corporate reforms, attorneys’ fees and costs, and unspecified relief. On June 14, 2021, the court “so ordered” a stipulation from the parties, staying this case pending resolution of the 10b-5 action, and the court “so ordered” two additional stipulations, staying the case until January 31, 2023. While Defendants had been scheduled to file their motion to dismiss by June 29, 2023, the parties agreed to two stays of this case, which the court “so ordered” on June 23, 2023, and on September 1, 2023. The September 1 stay was entered so that the parties can explore a mediated resolution to this matter.

While Oracle continues to evaluate these claims, we do not believe these matters will have a material impact on our financial position or results of operations.

Other Litigation

We 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 we 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.
v3.23.2
BASIS OF PRESENTATION AND OTHER (Policies)
 3 Months Ended
Aug. 31, 2023
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

We have prepared the condensed consolidated financial statements included herein pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and regulations. However, we believe that the disclosures herein are adequate to ensure the information presented is not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2023.

We believe that all necessary adjustments, which consisted only of normal recurring items, have been included in the accompanying financial statements to present fairly the results of the interim periods. The results of operations for the interim periods presented are not necessarily indicative of the operating results to be expected for any subsequent interim period or for the fiscal year ending May 31, 2024.

During the first quarter of fiscal 2024, we finalized our adoption of Accounting Standards Update 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting and subsequent amendments to the initial guidance (collectively, Topic 848), which had no material impact to our current or historical condensed consolidated financial statements. There have been no changes to our significant accounting policies as disclosed in our Annual Report on Form 10-K for the fiscal year ended May 31, 2023 that had a significant impact on our condensed consolidated financial statements or notes thereto as of and for the three months ended August 31, 2023.
Cash, Cash Equivalents and Restricted Cash

Cash, Cash Equivalents and Restricted Cash

Restricted cash that was included within cash and cash equivalents as presented within our condensed consolidated balance sheets as of August 31, 2023 and May 31, 2023 and our condensed consolidated statements of cash flows for the three months ended August 31, 2023 and 2022 was nominal.
Remaining Performance Obligations from Contracts with Customers

Remaining Performance Obligations from Contracts with Customers

Trade receivables, net of allowance for credit losses, and deferred revenues are reported net of related uncollected deferred revenues in our condensed consolidated balance sheets as of August 31, 2023 and May 31, 2023. The revenues recognized during the three months ended August 31, 2023 and 2022, respectively, that were included in the opening deferred revenues balances as of May 31, 2023 and 2022, respectively, were approximately $3.9 billion and $3.5 billion, respectively. Revenues recognized from performance obligations satisfied in prior periods and impairment losses recognized on our receivables were immaterial in each of the three months ended August 31, 2023 and 2022.

Remaining performance obligations, as defined in Note 1 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2023, were $64.9 billion as of August 31, 2023, approximately 49% of which we expect to recognize as revenues over the next twelve months, 35% over the subsequent month 13 to month 36 and the remainder thereafter.
Sales of Financing Receivables

Sales of Financing Receivables

We offer certain of our customers the option to acquire certain of our cloud and license, hardware 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. Financing receivables sold to financial institutions were $561 million and $927 million for the three months ended August 31, 2023 and 2022, respectively.
Non-Marketable Investments

Non-Marketable Investments

Our non-marketable debt investments and equity securities and related instruments totaled $1.7 billion and $1.6 billion as of August 31, 2023 and May 31, 2023, respectively, and are included in other non-current assets in the accompanying condensed consolidated balance sheets and are subject to periodic impairment reviews. Certain of these non-marketable equity securities and related instruments are adjusted for observable price changes from orderly transactions. The majority of the non-marketable investments held as of these dates were with a related party entity for which we follow the equity method of accounting. We are also a counterparty to certain options to acquire additional equity interests in that entity at various times through June 2025 and we could obtain control of that entity should such options be exercised.
Acquisition Related and Other Expenses

Acquisition Related and Other Expenses

Acquisition related and other expenses primarily consist of personnel related costs for transitional and certain other employees, certain business combination adjustments, including adjustments after the measurement period has ended, and certain other operating items, net.

 

 

 

Three Months Ended
August 31,

 

(in millions)

 

2023

 

 

2022

 

Transitional and other employee related costs

 

$

6

 

 

$

17

 

Business combination adjustments, net

 

 

1

 

 

 

5

 

Other, net

 

 

4

 

 

 

19

 

Total acquisition related and other expenses

 

$

11

 

 

$

41

 
Non-Operating (Expenses) Income, net

Non-Operating Expenses, net

Non-operating 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 losses related to equity investments, including losses attributable to equity method investments and net other income and expenses, including net unrealized gains and losses from our investment portfolio related to our deferred compensation plan and non-service net periodic pension income and losses.

 

 

 

Three Months Ended
August 31,

 

(in millions)

 

2023

 

 

2022

 

Interest income

 

$

136

 

 

$

38

 

Foreign currency losses, net

 

 

(82

)

 

 

(71

)

Noncontrolling interests in income

 

 

(37

)

 

 

(38

)

Losses from equity investments, net

 

 

(118

)

 

 

(86

)

Other income (expenses), net

 

 

52

 

 

 

(23

)

Total non-operating expenses, net

 

$

(49

)

 

$

(180

)
Fair Value Measurements

We perform fair value measurements in accordance with FASB Accounting Standards Codification (ASC) 820, Fair Value Measurement. 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.

ASC 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:

•
Level 1: quoted prices in active markets for identical assets or liabilities;
•
Level 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
•
Level 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.
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 that is provided to our CODMs for their review and assists our CODMs with evaluating the company’s performance and allocating company resources
v3.23.2
BASIS OF PRESENTATION AND OTHER (Tables)
 3 Months Ended
Aug. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Acquisition Related and Other Expenses

 

 

Three Months Ended
August 31,

 

(in millions)

 

2023

 

 

2022

 

Transitional and other employee related costs

 

$

6

 

 

$

17

 

Business combination adjustments, net

 

 

1

 

 

 

5

 

Other, net

 

 

4

 

 

 

19

 

Total acquisition related and other expenses

 

$

11

 

 

$

41

 
Non-Operating (Expenses) Income, net

 

 

Three Months Ended
August 31,

 

(in millions)

 

2023

 

 

2022

 

Interest income

 

$

136

 

 

$

38

 

Foreign currency losses, net

 

 

(82

)

 

 

(71

)

Noncontrolling interests in income

 

 

(37

)

 

 

(38

)

Losses from equity investments, net

 

 

(118

)

 

 

(86

)

Other income (expenses), net

 

 

52

 

 

 

(23

)

Total non-operating expenses, net

 

$

(49

)

 

$

(180

)
v3.23.2
FAIR VALUE MEASUREMENTS (Tables)
 3 Months Ended
Aug. 31, 2023
Fair Value Disclosures [Abstract]  
Assets and Liabilities Measured at Fair Value on a Recurring Basis

 

 

August 31, 2023

 

 

May 31, 2023

 

 

 

Fair Value Measurements
Using Input Types

 

 

 

 

 

Fair Value Measurements
Using Input Types

 

 

 

 

(in millions)

 

Level 1

 

 

Level 2

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

3,489

 

 

$

—

 

 

$

3,489

 

 

$

1,694

 

 

$

—

 

 

$

1,694

 

Time deposits and other

 

 

160

 

 

 

493

 

 

 

653

 

 

 

180

 

 

 

288

 

 

 

468

 

Derivative financial instruments

 

 

—

 

 

 

174

 

 

 

174

 

 

 

—

 

 

 

102

 

 

 

102

 

Total assets

 

$

3,649

 

 

$

667

 

 

$

4,316

 

 

$

1,874

 

 

$

390

 

 

$

2,264

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative financial instruments

 

$

—

 

 

$

112

 

 

$

112

 

 

$

—

 

 

$

126

 

 

$

126

 
v3.23.2
INTANGIBLE ASSETS AND GOODWILL (Tables)
 3 Months Ended
Aug. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets

 

 

Intangible Assets, Gross

 

 

Accumulated Amortization

 

 

Intangible Assets, Net

 

(in millions)

 

May 31,
 2023

 

 

Additions &
Adjustments, net

 

 

August 31,
 2023

 

 

May 31,
 2023

 

 

Expense

 

 

August 31,
 2023

 

 

May 31,
 2023

 

 

August 31,
 2023

 

Developed technology

 

$

4,300

 

 

$

—

 

 

$

4,300

 

 

$

(2,407

)

 

$

(168

)

 

$

(2,575

)

 

$

1,893

 

 

$

1,725

 

Cloud services and license support agreements and related relationships

 

 

9,456

 

 

 

—

 

 

 

9,456

 

 

 

(5,579

)

 

 

(269

)

 

 

(5,848

)

 

 

3,877

 

 

 

3,608

 

Cloud license and on-premise license agreements and related relationships

 

 

2,688

 

 

 

—

 

 

 

2,688

 

 

 

(697

)

 

 

(116

)

 

 

(813

)

 

 

1,991

 

 

 

1,875

 

Other

 

 

3,582

 

 

 

—

 

 

 

3,582

 

 

 

(1,506

)

 

 

(210

)

 

 

(1,716

)

 

 

2,076

 

 

 

1,866

 

Total intangible assets, net

 

$

20,026

 

 

$

—

 

 

$

20,026

 

 

$

(10,189

)

 

$

(763

)

 

$

(10,952

)

 

$

9,837

 

 

$

9,074

 

 

 
Estimated Future Amortization Expenses Related to Intangible Assets

Remainder of fiscal 2024

 

$

2,231

 

Fiscal 2025

 

 

2,283

 

Fiscal 2026

 

 

1,620

 

Fiscal 2027

 

 

664

 

Fiscal 2028

 

 

635

 

Fiscal 2029

 

 

561

 

Thereafter

 

 

1,080

 

Total intangible assets, net

 

$

9,074

 
Goodwill

(in millions)

 

Cloud and License

 

 

Hardware

 

 

Services

 

 

Total Goodwill, net

 

Balances as of May 31, 2023

 

$

57,060

 

 

$

2,732

 

 

$

2,469

 

 

$

62,261

 

Goodwill adjustments, net(1)

 

 

(13

)

 

 

—

 

 

 

(42

)

 

 

(55

)

Balances as of August 31, 2023

 

$

57,047

 

 

$

2,732

 

 

$

2,427

 

 

$

62,206

 

 

(1)
Amounts include any changes in goodwill balances for the period presented that resulted from foreign currency translations and certain other adjustments.
v3.23.2
RESTRUCTURING ACTIVITIES (Tables)
 3 Months Ended
Aug. 31, 2023
Restructuring and Related Activities [Abstract]  
Summary of All Plans

 

 

Accrued

 

 

Three Months Ended August 31, 2023

Accrued

 

 

Total
Costs

 

 

Total
Expected

 

(in millions)

 

May 31,
2023(2)

 

 

Initial
Costs(3)

 

 

Adj. to
Cost(4)

 

 

Cash
Payments

 

 

August 31,
2023(2)

 

 

Accrued
to Date

 

 

Program
Costs

 

2024 Restructuring Plan(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cloud and license

 

$

—

 

 

$

79

 

 

$

—

 

 

$

(23

)

 

$

56

 

 

$

79

 

 

$

184

 

Hardware

 

 

—

 

 

 

2

 

 

 

—

 

 

 

(1

)

 

 

1

 

 

 

2

 

 

 

5

 

Services

 

 

—

 

 

 

24

 

 

 

—

 

 

 

(13

)

 

 

11

 

 

 

24

 

 

 

187

 

Other

 

 

—

 

 

 

48

 

 

 

—

 

 

 

(22

)

 

 

26

 

 

 

48

 

 

 

233

 

Total 2024 Restructuring Plan

 

$

—

 

 

$

153

 

 

$

—

 

 

$

(59

)

 

$

94

 

 

$

153

 

 

$

609

 

Total other restructuring plans(5)

 

$

199

 

 

$

—

 

 

$

(15

)

 

$

(48

)

 

$

136

 

 

 

 

 

 

 

Total restructuring plans

 

$

199

 

 

$

153

 

 

$

(15

)

 

$

(107

)

 

$

230

 

 

 

 

 

 

 

 

(1)
Restructuring 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.
(2)
As of August 31, 2023 and May 31, 2023, substantially all restructuring liabilities have been recorded in other current liabilities within our condensed consolidated balance sheets.
(3)
Costs recorded for the respective restructuring plans during the period presented.
(4)
All plan adjustments were changes in estimates whereby increases and decreases in costs were generally recorded to operating expenses in the period of adjustments.
(5)
Other 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 condensed consolidated statements of operations was not significant.
v3.23.2
DEFERRED REVENUES (Tables)
 3 Months Ended
Aug. 31, 2023
Deferred Revenue Disclosure [Abstract]  
Deferred Revenues

(in millions)

 

August 31,
 2023

 

 

May 31,
 2023

 

Cloud services and license support

 

$

9,911

 

 

$

7,983

 

Hardware

 

 

686

 

 

 

535

 

Services

 

 

469

 

 

 

400

 

Cloud license and on-premise license

 

 

54

 

 

 

52

 

Deferred revenues, current

 

 

11,120

 

 

 

8,970

 

Deferred revenues, non-current (in other non-current liabilities)

 

 

1,146

 

 

 

968

 

Total deferred revenues

 

$

12,266

 

 

$

9,938

 
v3.23.2
STOCKHOLDERS' EQUITY (DEFICIT) (Tables)
 3 Months Ended
Aug. 31, 2023
Stockholders' Equity Note [Abstract]  
Stock-Based Compensation Expense

 

 

Three Months Ended
August 31,

 

(in millions)

 

2023

 

 

2022

 

Cloud services and license support

 

$

111

 

 

$

91

 

Hardware

 

 

5

 

 

 

4

 

Services

 

 

34

 

 

 

25

 

Sales and marketing

 

 

135

 

 

 

124

 

Research and development

 

 

484

 

 

 

422

 

General and administrative

 

 

80

 

 

 

84

 

Total stock-based compensation

 

$

849

 

 

$

750

 
v3.23.2
SEGMENT INFORMATION (Tables)
 3 Months Ended
Aug. 31, 2023
Segment Reporting [Abstract]  
Summary of Businesses Results

 

 

Three Months Ended
August 31,

 

(in millions)

 

2023

 

 

2022

 

Cloud and license:

 

 

 

 

 

 

Revenues

 

$

10,356

 

 

$

9,321

 

Cloud services and license support expenses

 

 

2,040

 

 

 

1,620

 

Sales and marketing expenses

 

 

1,784

 

 

 

1,930

 

Margin(1)

 

$

6,532

 

 

$

5,771

 

Hardware:

 

 

 

 

 

 

Revenues

 

$

714

 

 

$

763

 

Hardware products and support expenses

 

 

211

 

 

 

243

 

Sales and marketing expenses

 

 

70

 

 

 

79

 

Margin(1)

 

$

433

 

 

$

441

 

Services:

 

 

 

 

 

 

Revenues

 

$

1,383

 

 

$

1,361

 

Services expenses

 

 

1,145

 

 

 

1,007

 

Margin(1)

 

$

238

 

 

$

354

 

Totals:

 

 

 

 

 

 

Revenues

 

$

12,453

 

 

$

11,445

 

Expenses

 

 

5,250

 

 

 

4,879

 

Margin(1)

 

$

7,203

 

 

$

6,566

 

 

(1)
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 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 condensed consolidated statements of operations.
Reconciliation of Total Operating Segment Margin to Income before Income Taxes

 

 

Three Months Ended
August 31,

 

(in millions)

 

2023

 

 

2022

 

Total margin for operating segments

 

$

7,203

 

 

$

6,566

 

Research and development

 

 

(2,216

)

 

 

(2,093

)

General and administrative

 

 

(393

)

 

 

(411

)

Amortization of intangible assets

 

 

(763

)

 

 

(919

)

Acquisition related and other

 

 

(11

)

 

 

(41

)

Restructuring

 

 

(138

)

 

 

(144

)

Stock-based compensation for operating segments

 

 

(285

)

 

 

(244

)

Expense allocations and other, net

 

 

(101

)

 

 

(91

)

Interest expense

 

 

(872

)

 

 

(787

)

Non-operating expenses, net

 

 

(49

)

 

 

(180

)

Income before income taxes

 

$

2,375

 

 

$

1,656

 
Disaggregation of Revenue by Geography and Ecosystem

 

 

Three Months Ended
August 31,

 

(in millions)

 

2023

 

 

2022

 

Americas

 

$

7,841

 

 

$

7,192

 

EMEA(1)

 

 

3,005

 

 

 

2,691

 

Asia Pacific

 

 

1,607

 

 

 

1,562

 

Total revenues

 

$

12,453

 

 

$

11,445

 

 

(1)
Comprised of Europe, the Middle East and Africa

 

 

Three Months Ended
August 31,

 

(in millions)

 

2023

 

 

2022

 

Cloud services

 

$

4,635

 

 

$

3,579

 

License support

 

 

4,912

 

 

 

4,838

 

Total cloud services and license support revenues

 

$

9,547

 

 

$

8,417

 

 

 

Three Months Ended
August 31,

 

(in millions)

 

2023

 

 

2022

 

Applications cloud services and license support

 

$

4,471

 

 

$

4,016

 

Infrastructure cloud services and license support

 

 

5,076

 

 

 

4,401

 

Total cloud services and license support revenues

 

$

9,547

 

 

$

8,417

 
v3.23.2
EARNINGS PER SHARE (Tables)
 3 Months Ended
Aug. 31, 2023
Earnings Per Share [Abstract]  
Earnings Per Share

 

 

Three Months Ended
August 31,

 

(in millions, except per share data)

 

2023

 

 

2022

 

Net income

 

$

2,420

 

 

$

1,548

 

Weighted-average common shares outstanding

 

 

2,728

 

 

 

2,685

 

Dilutive effect of employee stock plans

 

 

95

 

 

 

62

 

Dilutive weighted-average common shares outstanding

 

 

2,823

 

 

 

2,747

 

Basic earnings per share

 

$

0.89

 

 

$

0.58

 

Diluted earnings per share

 

$

0.86

 

 

$

0.56

 

Shares subject to anti-dilutive restricted stock-based awards and stock options excluded from calculation(1)

 

 

27

 

 

 

71

 

 

(1)
These weighted shares relate to anti-dilutive restricted service based stock-based awards as calculated using the treasury stock method and contingently issuable shares pursuant to performance stock option arrangements. Such shares could be dilutive in the future.
v3.23.2
BASIS OF PRESENTATION AND OTHER Narrative (Details) - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Aug. 31, 2023
Aug. 31, 2022
May 31, 2023
May 31, 2022
Contract with Customer, Asset and Liability [Abstract]        
Revenues recognized included in opening deferred revenues balances     $ 3,900 $ 3,500
Revenue, Performance Obligation [Abstract]        
Remaining performance obligation, amount $ 64,900      
Sales of Financing Receivables [Abstract]        
Sales of financing receivables $ 561 $ 927    
Accounting Standards Update 2020-04 [Member]        
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]        
Accounting Standards Update, Adopted true      
Immaterial effect true      
v3.23.2
BASIS OF PRESENTATION AND OTHER Narrative (Details1)
Aug. 31, 2023
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-09-01  
Revenue, Performance Obligation [Abstract]  
Remaining performance obligation, percentage 49.00%
Revenue, remaining performance obligation, expected timing of satisfaction, period 12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-09-01  
Revenue, Performance Obligation [Abstract]  
Remaining performance obligation, percentage 35.00%
Revenue, remaining performance obligation, expected timing of satisfaction, period 2 years
v3.23.2
BASIS OF PRESENTATION AND OTHER (Details) - USD ($)
$ in Millions
 3 Months Ended
Aug. 31, 2023
Aug. 31, 2022
May 31, 2023
Equity Securities, FV-NI and without Readily Determinable Fair Value [Abstract]      
Non-marketable debt investments and equity securities and related instruments $ 1,700   $ 1,600
Acquisition Related and Other Expenses [Abstract]      
Transitional and other employee related costs 6 $ 17  
Business combination adjustments, net 1 5  
Other, net 4 19  
Total acquisition related and other expenses 11 41  
Non-Operating Expenses, net [Abstract]      
Interest income 136 38  
Foreign currency losses, net (82) (71)  
Noncontrolling interests in income (37) (38)  
Losses from equity investments, net (118) (86)  
Other income (expenses), net 52 (23)  
Total non-operating expenses, net $ (49) $ (180)  
v3.23.2
ACQUISITIONS Narrative (Details) - USD ($)
$ in Millions
 3 Months Ended
Jun. 08, 2022
Aug. 31, 2023
Aug. 31, 2022
May 31, 2023
Business Acquisition [Line Items]        
Revenues   $ 12,453 $ 11,445  
Fair values of restricted stock-based awards and stock options assumed   0 $ 55  
Goodwill   $ 62,206   $ 62,261
Cerner Corporation [Member]        
Business Acquisition [Line Items]        
Total preliminary purchase price $ 28,200      
Preliminary purchase price, in cash 28,200      
Fair values of restricted stock-based awards and stock options assumed 55      
Goodwill 18,600      
Intangible assets 12,000      
Tangible liabilities, Net $ 2,400      
v3.23.2
FAIR VALUES OF NET ASSETS ACQUIRED FROM CERNER (Details) - USD ($)
$ in Millions
Jun. 08, 2022
Aug. 31, 2023
May 31, 2023
Business Acquisition [Line Items]      
Goodwill   $ 62,206 $ 62,261
Cerner Corporation [Member]      
Business Acquisition [Line Items]      
Intangible assets $ 12,000    
Goodwill 18,600    
Total preliminary purchase price $ 28,200    
v3.23.2
FAIR VALUE MEASUREMENTS (Details) - USD ($)
$ in Millions
Aug. 31, 2023
May 31, 2023
Assets [Abstract]    
Derivative financial instruments $ 174 $ 102
Total assets 4,316 2,264
Liabilities [Abstract]    
Derivative financial instruments 112 126
Money Market Funds [Member]    
Assets [Abstract]    
Investments and cash and cash equivalents 3,489 1,694
Time Deposits and Other [Member]    
Assets [Abstract]    
Investments and cash and cash equivalents 653 468
Fair Value Measurements Using Input Types Level 1 [Member]    
Assets [Abstract]    
Derivative financial instruments 0 0
Total assets 3,649 1,874
Liabilities [Abstract]    
Derivative financial instruments 0 0
Fair Value Measurements Using Input Types Level 1 [Member] | Money Market Funds [Member]    
Assets [Abstract]    
Investments and cash and cash equivalents 3,489 1,694
Fair Value Measurements Using Input Types Level 1 [Member] | Time Deposits and Other [Member]    
Assets [Abstract]    
Investments and cash and cash equivalents 160 180
Fair Value Measurements Using Input Types Level 2 [Member]    
Assets [Abstract]    
Derivative financial instruments 174 102
Total assets 667 390
Liabilities [Abstract]    
Derivative financial instruments 112 126
Fair Value Measurements Using Input Types Level 2 [Member] | Money Market Funds [Member]    
Assets [Abstract]    
Investments and cash and cash equivalents 0 0
Fair Value Measurements Using Input Types Level 2 [Member] | Time Deposits and Other [Member]    
Assets [Abstract]    
Investments and cash and cash equivalents $ 493 $ 288
v3.23.2
FAIR VALUE MEASUREMENTS Narrative (Details) - Senior Notes and Other Long Term Borrowings [Member] - USD ($)
$ in Billions
Aug. 31, 2023
May 31, 2023
Marketable security investments maturity information [Abstract]    
Total debt, carrying value $ 88.9 $ 89.9
Fair Value Measurements Using Input Types Level 2 [Member]    
Marketable security investments maturity information [Abstract]    
Total debt, fair value $ 78.7 $ 79.9
v3.23.2
INTANGIBLE ASSETS (Details) - USD ($)
$ in Millions
 3 Months Ended
Aug. 31, 2023
Aug. 31, 2022
May 31, 2023
Acquired Finite-Lived Intangible Assets [Line Items]      
Intangible Assets, Gross $ 20,026   $ 20,026
Additions & Adjustments, net 0    
Accumulated Amortization, (10,952)   (10,189)
Expense (763) $ (919)  
Intangible Assets, Net 9,074   9,837
Developed technology [Member]      
Acquired Finite-Lived Intangible Assets [Line Items]      
Intangible Assets, Gross 4,300   4,300
Additions & Adjustments, net 0    
Accumulated Amortization, (2,575)   (2,407)
Expense (168)    
Intangible Assets, Net 1,725   1,893
Cloud services and license support agreements and related relationships [Member]      
Acquired Finite-Lived Intangible Assets [Line Items]      
Intangible Assets, Gross 9,456   9,456
Additions & Adjustments, net 0    
Accumulated Amortization, (5,848)   (5,579)
Expense (269)    
Intangible Assets, Net 3,608   3,877
Cloud license and on premise license agreements and related relationships [Member]      
Acquired Finite-Lived Intangible Assets [Line Items]      
Intangible Assets, Gross 2,688   2,688
Additions & Adjustments, net 0    
Accumulated Amortization, (813)   (697)
Expense (116)    
Intangible Assets, Net 1,875   1,991
Other [Member]      
Acquired Finite-Lived Intangible Assets [Line Items]      
Intangible Assets, Gross 3,582   3,582
Additions & Adjustments, net 0    
Accumulated Amortization, (1,716)   (1,506)
Expense (210)    
Intangible Assets, Net $ 1,866   $ 2,076
v3.23.2
INTANGIBLE ASSETS AMORTIZATION (Details) - USD ($)
$ in Millions
Aug. 31, 2023
May 31, 2023
Finite lived intangible assets future amortization expense [Abstract]    
Remainder of fiscal 2024 $ 2,231  
Fiscal 2025 2,283  
Fiscal 2026 1,620  
Fiscal 2027 664  
Fiscal 2028 635  
Fiscal 2029 561  
Thereafter 1,080  
Intangible Assets, Net $ 9,074 $ 9,837
v3.23.2
GOODWILL (Details)
$ in Millions
 3 Months Ended
Aug. 31, 2023
USD ($)
Goodwill [Line Items]  
Balances at period start $ 62,261
Goodwill adjustments, net 55 [1]
Balances at period end 62,206
Cloud and License [Member]  
Goodwill [Line Items]  
Balances at period start 57,060
Goodwill adjustments, net 13 [1]
Balances at period end 57,047
Hardware [Member]  
Goodwill [Line Items]  
Balances at period start 2,732
Goodwill adjustments, net 0 [1]
Balances at period end 2,732
Services [Member]  
Goodwill [Line Items]  
Balances at period start 2,469
Goodwill adjustments, net 42 [1]
Balances at period end $ 2,427
[1] Amounts include any changes in goodwill balances for the period presented that resulted from foreign currency translations and certain other adjustments.
v3.23.2
RESTRUCTURING ACTIVITIES Narrative (Details) - USD ($)
$ in Millions
 3 Months Ended
Aug. 31, 2023
Aug. 31, 2022
Restructuring Cost and Reserve [Line Items]    
Restructuring expenses $ 138 $ 144
Fiscal 2024 Oracle Restructuring [Member]    
Restructuring Cost and Reserve [Line Items]    
Total estimated restructuring costs [1] 609  
Restructuring expenses 153  
Remaining expenses to incur 456  
Fiscal 2024 Oracle Restructuring [Member] | Maximum [Member]    
Restructuring Cost and Reserve [Line Items]    
Total estimated restructuring costs $ 609  
[1] Restructuring 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.
v3.23.2
RESTRUCTURING ACTIVITIES (Details)
$ in Millions
 3 Months Ended
Aug. 31, 2023
USD ($)
 [2]
Restructuring Reserve Disclosures [Abstract]  
Accrued at period start $ 199 [1]
Initial Costs 153 [3]
Adjustments to Cost (15) [4]
Cash Payments (107)
Accrued at period end 230 [1]
Fiscal 2024 Oracle Restructuring [Member]  
Restructuring Reserve Disclosures [Abstract]  
Accrued at period start 0 [1]
Initial Costs 153 [3]
Adjustments to Cost 0 [4]
Cash Payments (59)
Accrued at period end 94 [1]
Total Costs Accrued to Date 153
Total Expected Program Costs 609
Fiscal 2024 Oracle Restructuring [Member] | Other [Member]  
Restructuring Reserve Disclosures [Abstract]  
Accrued at period start 0 [1]
Initial Costs 48 [3]
Adjustments to Cost 0 [4]
Cash Payments (22)
Accrued at period end 26 [1]
Total Costs Accrued to Date 48
Total Expected Program Costs 233
Fiscal 2024 Oracle Restructuring [Member] | Cloud and License [Member] | Operating Segments [Member]  
Restructuring Reserve Disclosures [Abstract]  
Accrued at period start 0 [1]
Initial Costs 79 [3]
Adjustments to Cost 0 [4]
Cash Payments (23)
Accrued at period end 56 [1]
Total Costs Accrued to Date 79
Total Expected Program Costs 184
Fiscal 2024 Oracle Restructuring [Member] | Hardware [Member] | Operating Segments [Member]  
Restructuring Reserve Disclosures [Abstract]  
Accrued at period start 0 [1]
Initial Costs 2 [3]
Adjustments to Cost 0 [4]
Cash Payments (1)
Accrued at period end 1 [1]
Total Costs Accrued to Date 2
Total Expected Program Costs 5
Fiscal 2024 Oracle Restructuring [Member] | Services [Member] | Operating Segments [Member]  
Restructuring Reserve Disclosures [Abstract]  
Accrued at period start 0 [1]
Initial Costs 24 [3]
Adjustments to Cost 0 [4]
Cash Payments (13)
Accrued at period end 11 [1]
Total Costs Accrued to Date 24
Total Expected Program Costs 187
Other Restructuring Plans [Member]  
Restructuring Reserve Disclosures [Abstract]  
Accrued at period start 199 [1],[5]
Initial Costs 0 [3],[5]
Adjustments to Cost (15) [4],[5]
Cash Payments (48) [5]
Accrued at period end $ 136 [1],[5]
[1] As of August 31, 2023 and May 31, 2023, substantially all restructuring liabilities have been recorded in other current liabilities within our condensed consolidated balance sheets.
[2] Restructuring 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.
[3] Costs recorded for the respective restructuring plans during the period presented.
[4] All plan adjustments were changes in estimates whereby increases and decreases in costs were generally recorded to operating expenses in the period of adjustments.
[5] Other 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 condensed consolidated statements of operations was not significant.
v3.23.2
DEFERRED REVENUES (Details) - USD ($)
$ in Millions
Aug. 31, 2023
May 31, 2023
Deferred Revenues [Line Items]    
Deferred revenues, current $ 11,120 $ 8,970
Deferred revenues, non-current (in other non-current liabilities) 1,146 968
Total deferred revenues 12,266 9,938
Cloud services and license support [Member] | Cloud and License [Member]    
Deferred Revenues [Line Items]    
Deferred revenues, current 9,911 7,983
Hardware [Member] | Hardware [Member]    
Deferred Revenues [Line Items]    
Deferred revenues, current 686 535
Services [Member] | Services [Member]    
Deferred Revenues [Line Items]    
Deferred revenues, current 469 400
Cloud license and on-premise license [Member] | Cloud and License [Member]    
Deferred Revenues [Line Items]    
Deferred revenues, current $ 54 $ 52
v3.23.2
STOCKHOLDERS' EQUITY (DEFICIT) Narrative (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions
 3 Months Ended
Sep. 11, 2023
Aug. 31, 2023
Aug. 31, 2022
Stock Repurchases [Abstract]      
Amount available for future repurchases   $ 8,000  
Repurchases of common stock (in shares)   1.3 7.5
Repurchased amount   $ 150 $ 559
Stock-based compensation expense and valuations of stock awards [Abstract]      
Restricted stock-based units granted (in shares)   2.0  
Forfeitures and cancellations (in shares)   1.0  
Subsequent Event [Member]      
Dividends on Common Stock [Abstract]      
Dividends declared per share of outstanding common stock (in dollars per share) $ 0.40    
Dividend payable date Oct. 26, 2023    
Dividend record date Oct. 12, 2023    
v3.23.2
STOCKHOLDERS' EQUITY (DEFICIT) (Details) - USD ($)
$ in Millions
 3 Months Ended
Aug. 31, 2023
Aug. 31, 2022
Stock-based compensation expense and valuations of stock awards [Abstract]    
Total stock-based compensation $ 849 $ 750
Cloud services and license support [Member]    
Stock-based compensation expense and valuations of stock awards [Abstract]    
Total stock-based compensation 111 91
Hardware [Member]    
Stock-based compensation expense and valuations of stock awards [Abstract]    
Total stock-based compensation 5 4
Services [Member]    
Stock-based compensation expense and valuations of stock awards [Abstract]    
Total stock-based compensation 34 25
Sales and marketing [Member]    
Stock-based compensation expense and valuations of stock awards [Abstract]    
Total stock-based compensation 135 124
Research and development [Member]    
Stock-based compensation expense and valuations of stock awards [Abstract]    
Total stock-based compensation 484 422
General and administrative [Member]    
Stock-based compensation expense and valuations of stock awards [Abstract]    
Total stock-based compensation $ 80 $ 84
v3.23.2
INCOME TAXES (Details) - USD ($)
$ in Billions
 3 Months Ended
Aug. 31, 2023
Aug. 31, 2022
May 31, 2023
Income Tax Disclosure [Abstract]      
Effective income tax rate (1.90%) 6.50%  
Deferred Tax Assets, Net [Abstract]      
Net deferred tax assets $ 7.0   $ 6.5
v3.23.2
SEGMENT INFORMATION Narrative (Details)
 3 Months Ended
Aug. 31, 2023
Segment
Business
Segment reporting information [Line Items]  
Number of businesses | Business 3
Cloud and License [Member]  
Segment reporting information [Line Items]  
Number of operating segments 1
Hardware [Member]  
Segment reporting information [Line Items]  
Number of operating segments 1
Services [Member]  
Segment reporting information [Line Items]  
Number of operating segments 1
v3.23.2
SEGMENT INFORMATION (Details) - USD ($)
$ in Millions
 3 Months Ended
Aug. 31, 2023
Aug. 31, 2022
Segment reporting information [Line Items]    
Revenues $ 12,453 $ 11,445
Cloud services and license support expenses [1] 2,179 1,735
Sales and marketing expenses [1] 2,026 2,177
Margin 3,296 2,623
Operating Segments [Member]    
Segment reporting information [Line Items]    
Revenues 12,453 11,445
Expenses 5,250 4,879
Margin [2] 7,203 6,566
Operating Segments [Member] | Cloud and License [Member]    
Segment reporting information [Line Items]    
Revenues 10,356 9,321
Cloud services and license support expenses 2,040 1,620
Sales and marketing expenses 1,784 1,930
Margin [2] 6,532 5,771
Operating Segments [Member] | Hardware [Member]    
Segment reporting information [Line Items]    
Revenues 714 763
Hardware products and support expenses 211 243
Sales and marketing expenses 70 79
Margin [2] 433 441
Operating Segments [Member] | Services [Member]    
Segment reporting information [Line Items]    
Revenues 1,383 1,361
Services expenses 1,145 1,007
Margin [2] $ 238 $ 354
[1] Exclusive of amortization of intangible assets, which is shown separately.
[2] 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 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 condensed consolidated statements of operations.
v3.23.2
SEGMENT INFORMATION RECONCILIATION (Details) - USD ($)
$ in Millions
 3 Months Ended
Aug. 31, 2023
Aug. 31, 2022
Reconciliation of Total Operating Segment Margin to Income Before Provision for Income Taxes [Abstract]    
Total margin for operating segments $ 3,296 $ 2,623
Research and development (2,216) (2,093)
General and administrative (393) (411)
Amortization of intangible assets (763) (919)
Acquisition related and other (11) (41)
Restructuring (138) (144)
Stock-based compensation for operating segments (285) (244)
Expense allocations and other, net (101) (91)
Interest expense (872) (787)
Non-operating expenses, net (49) (180)
Income before income taxes 2,375 1,656
Operating Segments [Member]    
Reconciliation of Total Operating Segment Margin to Income Before Provision for Income Taxes [Abstract]    
Total margin for operating segments [1] $ 7,203 $ 6,566
[1] 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 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 condensed consolidated statements of operations.
v3.23.2
SUMMARY OF TOTAL REVENUES BY GEOGRAPHIC REGION (Details) - USD ($)
$ in Millions
 3 Months Ended
Aug. 31, 2023
Aug. 31, 2022
Disaggregation of Revenue [Line Items]    
Total revenues $ 12,453 $ 11,445
Americas [Member]    
Disaggregation of Revenue [Line Items]    
Total revenues 7,841 7,192
EMEA [Member]    
Disaggregation of Revenue [Line Items]    
Total revenues [1] 3,005 2,691
Asia Pacific [Member]    
Disaggregation of Revenue [Line Items]    
Total revenues $ 1,607 $ 1,562
[1] Comprised of Europe, the Middle East and Africa
v3.23.2
SUMMARY OF CLOUD SERVICES AND LICENSE SUPPORT REVENUES BY ECOSYSTEMS (Details) - USD ($)
$ in Millions
 3 Months Ended
Aug. 31, 2023
Aug. 31, 2022
Disaggregation of Revenue [Line Items]    
Total revenues $ 12,453 $ 11,445
Cloud Services [Member]    
Disaggregation of Revenue [Line Items]    
Total revenues 4,635 3,579
License Support [Member]    
Disaggregation of Revenue [Line Items]    
Total revenues 4,912 4,838
Cloud services and license support [Member]    
Disaggregation of Revenue [Line Items]    
Total revenues 9,547 8,417
Applications Cloud Services and License Support [Member]    
Disaggregation of Revenue [Line Items]    
Total revenues 4,471 4,016
Infrastructure Cloud Services and License Support [Member]    
Disaggregation of Revenue [Line Items]    
Total revenues $ 5,076 $ 4,401
v3.23.2
EARNINGS PER SHARE (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions
 3 Months Ended
Aug. 31, 2023
Aug. 31, 2022
Earnings Per Share [Abstract]    
Net Income (Loss) $ 2,420 $ 1,548
Weighted average common shares outstanding 2,728 2,685
Dilutive effect of employee stock plans 95 62
Dilutive weighted average common shares outstanding 2,823 2,747
Basic earnings per share $ 0.89 $ 0.58
Diluted earnings per share $ 0.86 $ 0.56
Shares subject to anti-dilutive restricted stock-based awards and stock options excluded from calculation [1] 27 71
[1] These weighted shares relate to anti-dilutive restricted service based stock-based awards as calculated using the treasury stock method and contingently issuable shares pursuant to performance stock option arrangements. Such shares could be dilutive in the future.
v3.23.2
LEGAL PROCEEDINGS (Details)
Aug. 10, 2018
USD ($)
Derivative Litigation Concerning Oracle Cloud Business  
Loss Contingencies [Line Items]  
Payment of legal settlements $ 17,500,000