v3.25.2
SEGMENT INFORMATION
 12 Months Ended
May 31, 2025
Segment Reporting [Abstract]  
SEGMENT INFORMATION
13.
SEGMENT INFORMATION

ASC 280, Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision makers (CODMs) are our Chief Executive Officer and Chief Technology Officer. We are organized by line of business and geographically. While our CODMs evaluate results in a number of different ways, the line of business management structure is the primary basis for which the allocation of resources and financial results are assessed. The tabular information below presents financial information, including information on segment revenues, significant segment expenses categories and amounts on a segment basis and included within each reported measure of a segment's profit or loss, that is regularly provided to our CODMs for their review and assists our CODMs with evaluating the company’s performance and allocating company resources.

We have three businesses—cloud and license, hardware and services—each of which is comprised of a single operating segment. All three of our businesses market and sell our offerings globally to businesses of many sizes, government agencies, educational institutions and resellers with a worldwide sales force positioned to offer the combinations that best meet customer needs.

Our cloud and license business engages in the sale, marketing and delivery of our enterprise applications and infrastructure technologies through cloud and on-premise deployment models including our cloud services and license support offerings; and our cloud license and on-premise license offerings. Cloud services and license support revenues are generated from offerings that are typically contracted with customers directly, billed to customers in advance, delivered to customers over time with our revenue recognition occurring over the contractual terms and renewed by customers upon completion of the contractual terms. Cloud services and license support contracts provide customers with access to the latest updates to the applications and infrastructure technologies as they become available and for which the customer contracted and also include related technical support services over the contractual term. 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, excluding the impact of timing of booking of large contracts, are typically highest in our fourth fiscal quarter and the related cash flows are typically highest in the following quarter (i.e., in the first fiscal quarter of the next fiscal year) as we receive payments from these contracts. Costs associated with our cloud and license business are largely personnel- and infrastructure-related including the cost of providing our cloud services and license support offerings, salaries and commissions earned by our sales force for the sale of our cloud and license offerings and marketing program costs.

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. Costs associated with our hardware business include the cost of hardware products, which consists of expenses for materials and labor used to produce these products by our internal manufacturing operations or by third-party manufacturers, warranty and related expenses and the impact of periodic changes in inventory valuation, including the impact of inventory determined to be excess and obsolete; the cost of materials used to repair customer products with eligible support contracts; the cost of labor and infrastructure to provide support services; and sales and marketing expenses, which are largely personnel-related and include variable compensation earned by our sales force for the sales of our hardware offerings.

Our services business provides services to customers and partners to help maximize the performance of their investments in Oracle applications and infrastructure technologies. Costs associated with our services business consist primarily of personnel-related expenses, technology infrastructure expenditures, facilities expenses and external contractor expenses.

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 for each of fiscal 2025, 2024 and 2023:

 

 

 

Year Ended May 31,

 

(in millions)

 

2025

 

 

2024

 

 

2023

 

Cloud and license:

 

 

 

 

 

 

 

 

 

Revenues

 

$

49,230

 

 

$

44,464

 

 

$

41,086

 

Cloud services and license support expenses

 

 

10,827

 

 

 

8,783

 

 

 

7,222

 

Sales and marketing expenses

 

 

7,473

 

 

 

7,167

 

 

 

7,738

 

Margin(1)

 

$

30,930

 

 

$

28,514

 

 

$

26,126

 

Hardware:

 

 

 

 

 

 

 

 

 

Revenues

 

$

2,936

 

 

$

3,066

 

 

$

3,274

 

Hardware products and support expenses

 

 

742

 

 

 

855

 

 

 

1,011

 

Sales and marketing expenses

 

 

276

 

 

 

296

 

 

 

331

 

Margin(1)

 

$

1,918

 

 

$

1,915

 

 

$

1,932

 

Services:

 

 

 

 

 

 

 

 

 

Revenues

 

$

5,233

 

 

$

5,431

 

 

$

5,594

 

Services expenses

 

 

4,240

 

 

 

4,515

 

 

 

4,490

 

Margin(1)

 

$

993

 

 

$

916

 

 

$

1,104

 

Totals:

 

 

 

 

 

 

 

 

 

Revenues

 

$

57,399

 

 

$

52,961

 

 

$

49,954

 

Expenses

 

 

23,558

 

 

 

21,616

 

 

 

20,792

 

Margin(1)

 

$

33,841

 

 

$

31,345

 

 

$

29,162

 

 

(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 income (expenses), net. Refer to the table below for a reconciliation of our total margin for operating segments to our income before income taxes as reported per our consolidated statements of operations.

 

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

 

 

Year Ended May 31,

 

(in millions)

 

2025

 

 

2024

 

 

2023

 

Total margin for operating segments

 

$

33,841

 

 

$

31,345

 

 

$

29,162

 

Research and development

 

 

(9,860

)

 

 

(8,915

)

 

 

(8,623

)

General and administrative

 

 

(1,602

)

 

 

(1,548

)

 

 

(1,579

)

Amortization of intangible assets

 

 

(2,307

)

 

 

(3,010

)

 

 

(3,582

)

Acquisition related and other

 

 

(75

)

 

 

(314

)

 

 

(190

)

Restructuring

 

 

(299

)

 

 

(404

)

 

 

(490

)

Stock-based compensation for operating segments

 

 

(1,597

)

 

 

(1,382

)

 

 

(1,201

)

Expense allocations and other, net

 

 

(423

)

 

 

(419

)

 

 

(404

)

Interest expense

 

 

(3,578

)

 

 

(3,514

)

 

 

(3,505

)

Non-operating income (expenses), net

 

 

60

 

 

 

(98

)

 

 

(462

)

Income before income taxes

 

$

14,160

 

 

$

11,741

 

 

$

9,126

 

 

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 consolidated statements of operations.

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

 

 

Year Ended May 31,

 

(in millions)

 

2025

 

 

2024

 

 

2023

 

Americas

 

$

36,339

 

 

$

33,122

 

 

$

31,226

 

EMEA(1)

 

 

14,025

 

 

 

13,030

 

 

 

12,109

 

Asia Pacific

 

 

7,035

 

 

 

6,809

 

 

 

6,619

 

Total revenues

 

$

57,399

 

 

$

52,961

 

 

$

49,954

 

 

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

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

 

 

Year Ended May 31,

 

(in millions)

 

2025

 

 

2024

 

 

2023

 

Cloud services

 

$

24,506

 

 

$

19,774

 

 

$

15,881

 

License support

 

 

19,523

 

 

 

19,609

 

 

 

19,426

 

Total cloud services and license support revenues

 

$

44,029

 

 

$

39,383

 

 

$

35,307

 

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

 

 

Year Ended May 31,

 

(in millions)

 

2025

 

 

2024

 

 

2023

 

Applications cloud services and license support

 

$

19,383

 

 

$

18,172

 

 

$

16,651

 

Infrastructure cloud services and license support

 

 

24,646

 

 

 

21,211

 

 

 

18,656

 

Total cloud services and license support revenues

 

$

44,029

 

 

$

39,383

 

 

$

35,307

 

 

Geographic Information

Disclosed in the table below is geographic information for each country that comprised greater than three percent of our total revenues for any of fiscal 2025, 2024 or 2023:

 

 

 

As of and for the Year Ended May 31,

 

 

 

2025

 

 

2024

 

 

2023

 

(in millions)

 

Revenues

 

 

Long-Lived
Assets(1)

 

 

Revenues

 

 

Long-Lived
Assets(1)

 

 

Revenues

 

 

Long-Lived
Assets(1)

 

U.S.

 

$

32,075

 

 

$

45,439

 

 

$

29,055

 

 

$

24,798

 

 

$

27,535

 

 

$

19,322

 

United Kingdom

 

 

2,594

 

 

 

2,530

 

 

 

2,423

 

 

 

1,164

 

 

 

2,159

 

 

 

905

 

Germany

 

 

1,817

 

 

 

2,013

 

 

 

1,794

 

 

 

1,192

 

 

 

1,755

 

 

 

940

 

Japan

 

 

1,759

 

 

 

2,320

 

 

 

1,662

 

 

 

1,144

 

 

 

1,681

 

 

 

770

 

Other countries

 

 

19,154

 

 

 

7,841

 

 

 

18,027

 

 

 

3,962

 

 

 

16,824

 

 

 

3,626

 

Total

 

$

57,399

 

 

$

60,143

 

 

$

52,961

 

 

$

32,260

 

 

$

49,954

 

 

$

25,563

 

 

(1)
Long-lived assets exclude goodwill, intangible assets, non-marketable investments and deferred taxes, which are not allocated to specific geographic locations as it is impracticable to do so.