v3.26.1
SEGMENT INFORMATION
 3 Months Ended
Aug. 31, 2026
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 Officers and Chief Technology Officer. We are organized by line of business and geographically. While our CODMs evaluate results in a number of different ways, the line of business management structure is the primary basis for which the allocation of resources and financial results are assessed.

We have three businesses: (1) cloud and software, (2) hardware and (3) services—each of which is comprised of a single operating segment. The tabular information below presents financial information, including information on segment revenues and significant segment expenses included within each segment’s measure of 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.

Our cloud and software business engages in the sale, marketing and delivery of our enterprise applications and infrastructure technologies through cloud and on-premise deployment models, including our cloud offerings and our software offerings. Cloud revenues are generated from applications and infrastructure offerings that are typically contracted with customers directly, delivered to customers over time with our revenue recognition occurring over the contractual terms and renewed by customers upon completion of the contractual terms. Our cloud contracts provide customers with access to the latest technological updates as they become available and for which the customer contracted together with related technical support services over the contractual term. Software revenues represent:

(1) fees earned from granting customers software licenses, generally on a perpetual basis, to use our database and middleware and our applications software products within cloud and on-premise information technology (IT) environments. We generally recognize revenues at the point in time the software is made available to the customer to download and use, which typically is immediate upon signature of the license contract; and

(2) software support revenues, which are typically contracted with customers directly, billed to customers in advance, delivered to customers over time with our revenue recognition occurring over the contractual terms and renewed by customers upon completion of the contractual terms.

Software support contracts provide customers with technical support services and unspecified license upgrades and enhancements during the term of the support period. In each fiscal year, our cloud and software business’ contractual activities, excluding the impact of timing of booking of large contracts, are typically highest in our fourth fiscal quarter, and the related cash flows are typically highest in the following quarter (i.e., in the first fiscal quarter of the next fiscal year) as we receive payments from these contracts. Costs associated with our cloud and software business are largely infrastructure- and personnel-related, including the cost of providing our cloud and software offerings, salaries and commissions earned by our sales force for the sale of our cloud and software offerings and marketing program costs.

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; 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 and include our consulting services and customer success services offerings. Costs associated with our services business consist primarily of personnel-related expenses, technology infrastructure expenditures, facilities expenses and external contractor expenses.

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)

 

2026

 

 

2025

 

Cloud and software:

 

 

 

 

 

 

Revenues

 

$

17,157

 

 

$

12,907

 

Cloud and software expenses

 

 

6,235

 

 

 

3,418

 

Sales and marketing expenses

 

 

1,564

 

 

 

1,798

 

Margin(1)

 

$

9,358

 

 

$

7,691

 

Hardware:

 

 

 

 

 

 

Revenues

 

$

774

 

 

$

670

 

Hardware expenses

 

 

272

 

 

 

169

 

Sales and marketing expenses

 

 

50

 

 

 

54

 

Margin(1)

 

$

452

 

 

$

447

 

Services:

 

 

 

 

 

 

Revenues

 

$

1,414

 

 

$

1,349

 

Services expenses

 

 

969

 

 

 

1,017

 

Margin(1)

 

$

445

 

 

$

332

 

Totals:

 

 

 

 

 

 

Revenues

 

$

19,345

 

 

$

14,926

 

Expenses

 

 

9,090

 

 

 

6,456

 

Margin(1)

 

$

10,255

 

 

$

8,470

 

 

(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, restructuring and other expenses, stock-based compensation, interest expense or certain other non-operating income, 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 margin for operating segments to income before income taxes:

 

 

 

Three Months Ended
August 31,

 

(in millions)

 

2026

 

 

2025

 

Total margin for operating segments

 

$

10,255

 

 

$

8,470

 

Research and development

 

 

(2,401

)

 

 

(2,491

)

General and administrative

 

 

(376

)

 

 

(376

)

Amortization of intangible assets

 

 

(202

)

 

 

(420

)

Restructuring and other

 

 

(94

)

 

 

(415

)

Stock-based compensation for operating segments

 

 

(362

)

 

 

(389

)

Expense allocations and other, net

 

 

(92

)

 

 

(102

)

Interest expense

 

 

(1,428

)

 

 

(923

)

Non-operating income, net

 

 

307

 

 

 

73

 

Income before income taxes

 

$

5,607

 

 

$

3,427

 

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 presents a summary of our total revenues by geographic region, which are generally based on the location of our customers:

 

 

 

Three Months Ended
August 31,

 

(in millions)

 

2026

 

 

2025

 

Americas

 

$

13,711

 

 

$

9,662

 

EMEA(1)

 

 

3,726

 

 

 

3,481

 

Asia Pacific

 

 

1,908

 

 

 

1,783

 

Total revenues

 

$

19,345

 

 

$

14,926

 

 

(1)
Comprises Europe, the Middle East and Africa

The following table presents our cloud revenues by offerings:

 

 

Three Months Ended
August 31,

 

(in millions)

 

2026

 

 

2025

 

Cloud applications

 

$

4,219

 

 

$

3,839

 

Cloud infrastructure

 

 

7,388

 

 

 

3,347

 

Total cloud revenues

 

$

11,607

 

 

$

7,186

 

 

The following table presents our software revenues by offerings:

 

 

 

Three Months Ended
August 31,

 

(in millions)

 

2026

 

 

2025

 

Software license

 

$

655

 

 

$

766

 

Software support

 

 

4,895

 

 

 

4,955

 

Total software revenues

 

$

5,550

 

 

$

5,721