DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - shares | 9 Months Ended | |
Feb. 28, 2023 | Mar. 06, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Feb. 28, 2023 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 | |
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) | 2,699,802,000 | |
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 $0.01 per share | |
Trading Symbol | ORCL | |
Security Exchange Name | NYSE | |
3.125% senior notes due July 2025 [Member] | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 3.125% senior notes due July 2025 | |
Security Exchange Name | NYSE | |
No Trading Symbol Flag | true |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Feb. 28, 2023 | May 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 8,219 | $ 21,383 |
Marketable securities | 550 | 519 |
Trade receivables, net of allowances for credit losses of $400 and $362 as of February 28, 2023 and May 31, 2022, respectively | 6,213 | 5,953 |
Prepaid expenses and other current assets | 3,714 | 3,778 |
Total current assets | 18,696 | 31,633 |
Non-current assets: | ||
Property, plant and equipment, net | 16,345 | 9,716 |
Intangible assets, net | 10,707 | 1,440 |
Goodwill, net | 61,499 | 43,811 |
Deferred tax assets | 12,153 | 12,782 |
Other non-current assets | 12,220 | 9,915 |
Total non-current assets | 112,924 | 77,664 |
Total assets | 131,620 | 109,297 |
Current liabilities: | ||
Notes payable and other borrowings, current | 5,415 | 3,749 |
Accounts payable | 1,610 | 1,317 |
Accrued compensation and related benefits | 1,736 | 1,944 |
Deferred revenues | 8,598 | 8,357 |
Other current liabilities | 5,521 | 4,144 |
Total current liabilities | 22,880 | 19,511 |
Non-current liabilities: | ||
Notes payable and other borrowings, non-current | 86,396 | 72,110 |
Income taxes payable | 11,335 | 12,210 |
Deferred tax liabilities | 6,814 | 6,031 |
Other non-current liabilities | 6,107 | 5,203 |
Total non-current liabilities | 110,652 | 95,554 |
Commitments and contingencies | 0 | 0 |
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: 2,700 shares and 2,665 shares as of February 28, 2023 and May 31, 2022, respectively | 28,994 | 26,808 |
Accumulated deficit | (29,721) | (31,336) |
Accumulated other comprehensive loss | (1,694) | (1,692) |
Total Oracle Corporation stockholders' deficit | (2,421) | (6,220) |
Noncontrolling interests | 509 | 452 |
Total stockholders' deficit | (1,912) | (5,768) |
Total liabilities and stockholders' deficit | $ 131,620 | $ 109,297 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS PARENTHETICAL - USD ($) $ in Millions | Feb. 28, 2023 | May 31, 2022 |
Statement Of Financial Position [Abstract] | ||
Allowance for credit losses | $ 400 | $ 362 |
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 | 2,700,000,000 | 2,665,000,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Feb. 28, 2023 | Feb. 28, 2022 | Feb. 28, 2023 | Feb. 28, 2022 | ||
Revenues: | |||||
Cloud services and license support | $ 8,923 | $ 7,637 | $ 25,938 | $ 22,562 | |
Cloud license and on-premise license | 1,288 | 1,289 | 3,627 | 3,339 | |
Hardware | 811 | 798 | 2,424 | 2,328 | |
Services | 1,376 | 789 | 4,129 | 2,371 | |
Total revenues | 12,398 | 10,513 | 36,118 | 30,600 | |
Operating expenses: | |||||
Cloud services and license support | [1] | 1,980 | 1,305 | 5,606 | 3,778 |
Hardware | [1] | 244 | 244 | 780 | 718 |
Services | [1] | 1,215 | 669 | 3,448 | 1,984 |
Sales and marketing | [1] | 2,150 | 2,004 | 6,544 | 5,811 |
Research and development | 2,146 | 1,816 | 6,397 | 5,254 | |
General and administrative | 402 | 335 | 1,179 | 953 | |
Amortization of intangible assets | 886 | 279 | 2,712 | 882 | |
Acquisition related and other | 37 | 20 | 140 | 4,707 | |
Restructuring | 78 | 19 | 359 | 89 | |
Total operating expenses | 9,138 | 6,691 | 27,165 | 24,176 | |
Operating income | 3,260 | 3,822 | 8,953 | 6,424 | |
Interest expense | (908) | (667) | (2,550) | (2,051) | |
Non-operating expenses, net | (134) | (315) | (386) | (348) | |
Income before income taxes | 2,218 | 2,840 | 6,017 | 4,025 | |
Provision for income taxes | 322 | 521 | 833 | 497 | |
Net income | $ 1,896 | $ 2,319 | $ 5,184 | $ 3,528 | |
Earnings per share: | |||||
Basic | $ 0.70 | $ 0.87 | $ 1.93 | $ 1.30 | |
Diluted | $ 0.68 | $ 0.84 | $ 1.88 | $ 1.26 | |
Weighted average common shares outstanding: | |||||
Basic | 2,698 | 2,670 | 2,692 | 2,711 | |
Diluted | 2,776 | 2,754 | 2,757 | 2,800 | |
[1]Exclusive of amortization of intangible assets, which is shown separately. |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2023 | Feb. 28, 2022 | Feb. 28, 2023 | Feb. 28, 2022 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income | $ 1,896 | $ 2,319 | $ 5,184 | $ 3,528 |
Other comprehensive income (loss), net of tax: | ||||
Net foreign currency translation gains (losses) | 11 | (63) | (183) | (508) |
Net unrealized gains on cash flow hedges | 71 | 0 | 181 | 0 |
Other, net | 1 | 1 | 0 | 5 |
Total other comprehensive income (loss), net | 83 | (62) | (2) | (503) |
Comprehensive income | $ 1,979 | $ 2,257 | $ 5,182 | $ 3,025 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' 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, 2021 | $ 26,533 | $ (20,120) | $ (461) | |
Other comprehensive income (loss), net | $ (503) | (503) | ||
Common stock issued | 357 | |||
Stock-based compensation | 1,900 | |||
Repurchases of common stock | (15,600) | (1,648) | (13,952) | |
Cash dividends declared | (2,603) | |||
Net income | 3,528 | |||
Other, net | (1,013) | (229) | ||
Balance, end of period at Feb. 28, 2022 | $ (8,211) | 26,129 | (33,147) | (1,193) |
Cash dividends declared per common share | $ 0.96 | |||
Balance, beginning of period at Nov. 30, 2021 | 25,591 | (34,076) | (1,173) | |
Other comprehensive income (loss), net | $ (62) | (62) | ||
Common stock issued | 52 | |||
Stock-based compensation | 674 | |||
Repurchases of common stock | (65) | (535) | ||
Cash dividends declared | (855) | |||
Net income | 2,319 | |||
Other, net | (123) | 42 | ||
Balance, end of period at Feb. 28, 2022 | $ (8,211) | 26,129 | (33,147) | (1,193) |
Cash dividends declared per common share | $ 0.32 | |||
Balance, beginning of period at May. 31, 2022 | $ (5,768) | 26,808 | (31,336) | (1,240) |
Other comprehensive income (loss), net | (2) | (2) | ||
Common stock issued | 759 | |||
Stock-based compensation | 2,583 | |||
Repurchases of common stock | (1,100) | (153) | (983) | |
Cash dividends declared | (2,586) | |||
Net income | 5,184 | |||
Other, net | (1,003) | 57 | ||
Balance, end of period at Feb. 28, 2023 | $ (1,912) | 28,994 | (29,721) | (1,185) |
Cash dividends declared per common share | $ 0.96 | |||
Balance, beginning of period at Nov. 30, 2022 | 28,148 | (30,617) | (1,307) | |
Other comprehensive income (loss), net | $ 83 | 83 | ||
Common stock issued | 98 | |||
Stock-based compensation | 924 | |||
Repurchases of common stock | (18) | (137) | ||
Cash dividends declared | (863) | |||
Net income | 1,896 | |||
Other, net | (158) | 39 | ||
Balance, end of period at Feb. 28, 2023 | $ (1,912) | $ 28,994 | $ (29,721) | $ (1,185) |
Cash dividends declared per common share | $ 0.32 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Feb. 28, 2023 | Feb. 28, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 5,184 | $ 3,528 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 1,810 | 1,409 |
Amortization of intangible assets | 2,712 | 882 |
Deferred income taxes | (1,253) | (983) |
Stock-based compensation | 2,583 | 1,900 |
Other, net | 487 | 82 |
Changes in operating assets and liabilities, net of effects from acquisitions: | ||
Decrease in trade receivables, net | 460 | 652 |
Decrease in prepaid expenses and other assets | 515 | 71 |
Decrease in accounts payable and other liabilities | (783) | (683) |
Decrease in income taxes payable | (453) | (661) |
Increase (decrease) in deferred revenues | 256 | (643) |
Net cash provided by operating activities | 11,518 | 5,554 |
Cash flows from investing activities: | ||
Purchases of marketable securities and other investments | (921) | (10,134) |
Proceeds from sales and maturities of marketable securities and other investments | 552 | 25,735 |
Acquisitions, net of cash acquired | (27,721) | (132) |
Capital expenditures | (6,782) | (3,088) |
Net cash (used for) provided by investing activities | (34,872) | 12,381 |
Cash flows from financing activities: | ||
Payments for repurchases of common stock | (1,150) | (15,654) |
Proceeds from issuances of common stock | 759 | 357 |
Shares repurchased for tax withholdings upon vesting of restricted stock-based awards | (1,040) | (1,011) |
Payments of dividends to stockholders | (2,586) | (2,603) |
Proceeds from issuances of commercial paper, net of repayments | 1,874 | 0 |
Proceeds from issuances of senior notes and other borrowings, net of issuance costs | 33,494 | 0 |
Repayments of senior notes and other borrowings | (21,050) | (5,750) |
Other, net | 49 | (439) |
Net cash provided by (used for) financing activities | 10,350 | (25,100) |
Effect of exchange rate changes on cash and cash equivalents | (160) | (251) |
Net decrease in cash and cash equivalents | (13,164) | (7,416) |
Cash and cash equivalents at beginning of period | 21,383 | 30,098 |
Cash and cash equivalents at end of period | 8,219 | 22,682 |
Non-cash financing activities: | ||
Fair values of stock awards assumed in connection with acquisitions | $ 55 | $ 0 |
BASIS OF PRESENTATION, RECENT A
BASIS OF PRESENTATION, RECENT ACCOUNTING PRONOUNCEMENTS AND OTHER | 9 Months Ended |
Feb. 28, 2023 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
BASIS OF PRESENTATION, RECENT ACCOUNTING PRONOUNCEMENTS AND OTHER | 1. BASIS OF PRESENTATION, RECENT ACCOUNTING PRONOUNCEMENTS 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 (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, 2022. The comparability of our condensed consolidated financial statements as of and for the nine months ended February 28, 2023 was impacted by $4.7 billion of certain litigation related charges during the first nine months of fiscal 2022. Refer to Note 16 to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended May 31, 2022 for additional information. On June 8, 2022, we completed our acquisition of Cerner Corporation (Cerner), a provider of digital information systems used within hospitals and health systems, by means of a merger of one of our wholly owned subsidiaries with and into Cerner such that Cerner became an indirect, wholly owned subsidiary of Oracle. Through our acquisition of Cerner, we enhanced our offerings of each of our three existing businesses, cloud and license, hardware and services. The condensed consolidated financial statements included in this Quarterly Report include the financial results of Cerner prospectively from the date of acquisition. Refer to Note 2 below for additional details regarding our acquisition of Cerner. 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 our fiscal year ending May 31, 2023. 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, 2022 that had a significant impact on our condensed consolidated financial statements or notes thereto as of and for the nine months ended February 28, 2023. Use of Estimates Our condensed consolidated financial statements are prepared in accordance with GAAP as set forth in the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification, and we consider various staff accounting bulletins and other applicable guidance issued by the SEC. These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. To the extent that there are differences between these estimates, judgments or assumptions and actual results, our consolidated financial statements will be affected. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting among available alternatives would not produce a materially different result. During the first quarter of fiscal 2023, we completed an assessment of the useful lives of our servers and increased the estimate of the useful lives from four years to five years effective at the beginning of fiscal 2023. Based on the carrying value of our servers as of May 31, 2022, this change in accounting estimate decreased our total operating expenses by $101 million and $346 million for the third quarter and first nine months of fiscal 2023, respectively. 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 February 28, 2023 and May 31, 2022 and our condensed consolidated statements of cash flows for the nine months ended February 28, 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 February 28, 2023 and May 31, 2022. The revenues recognized during the nine months ended February 28, 2023 and 2022, respectively, that were included in the opening deferred revenues balances as of May 31, 2022 and 2021, respectively, were approximately $7.7 billion and $8.1 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 and nine months ended February 28, 2023 and 2022, respectively. 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, 2022, were $62.3 billion as of February 28, 2023, approximately 48% 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 $344 million and $1.5 billion for the three and nine months ended February 28, 2023, respectively, and $352 million and $1.4 billion for the three and nine months ended February 28, 2022, respectively. Non-Marketable Investments Our non-marketable debt investments and equity securities and related instruments totaled $2.1 billion and $1.2 billion as of February 28, 2023 and May 31, 2022, respectively, and are included in other non-current assets in the accompanying 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. For the nine months ended February 28, 2022, acquisition related and other expenses included certain litigation related charges. Three Months Ended February 28, Nine Months Ended February 28, (in millions) 2023 2022 2023 2022 Transitional and other employee related costs $ 15 $ 2 $ 52 $ 6 Business combination adjustments, net 2 5 10 8 Other, net 20 13 78 4,693 Total acquisition related and other expenses $ 37 $ 20 $ 140 $ 4,707 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 February 28, Nine Months Ended February 28, (in millions) 2023 2022 2023 2022 Interest income $ 90 $ 16 $ 180 $ 56 Foreign currency losses, net (55 ) (29 ) (181 ) (109 ) Noncontrolling interests in income (41 ) (42 ) (120 ) (131 ) Losses from equity investments, net (122 ) (197 ) (249 ) (138 ) Other losses, net (6 ) (63 ) (16 ) (26 ) Total non-operating expenses, net $ (134 ) $ (315 ) $ (386 ) $ (348 ) Recent Accounting Pronouncements Financial Instruments In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04) and also issued subsequent amendments to the initial guidance (collectively, Topic 848). Topic 848 provides optional guidance for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued. We will adopt Topic 848 when our relevant contracts are modified upon transition to alternative reference rates. We do not expect our adoption of Topic 848 to have a material impact on our consolidated financial statements. |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Feb. 28, 2023 | |
Business Combinations [Abstract] | |
ACQUISITIONS | 2. ACQUISITIONS Acquisition of Cerner Corporation On December 20, 2021, we entered into an Agreement and Plan of Merger (Merger Agreement) with 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. On January 19, 2022, pursuant to the Merger Agreement, we commenced a tender offer to purchase all of the issued and outstanding shares of common stock of Cerner at a purchase price of $95.00 per share, net to the seller in cash, without interest thereon, based upon the terms and subject to the conditions set forth in the Offer to Purchase dated January 19, 2022, and the related Letter of Transmittal. On June 8, 2022, pursuant to the terms of the tender offer and applicable Delaware law, we acquired all the outstanding Cerner shares and effectuated the merger of Cerner with and into a wholly-owned subsidiary of Oracle and Cerner became an indirect, wholly-owned subsidiary of Oracle. Vested equity awards outstanding immediately prior to the consummation of the merger were cancelled in exchange for the right to receive an amount in cash based on a formula contained in the Merger Agreement. The unvested equity awards to acquire Cerner common stock that were outstanding immediately prior to the conclusion of the merger were converted into equity awards denominated in shares of Oracle common stock based on formulas contained in the Merger Agreement. We have included the financial results of Cerner in our consolidated financial statements from the date of acquisition. For the third quarter and first nine months of fiscal 2023, Cerner contributed $1.5 billion and $4.4 billion to our total revenues, respectively. 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. Pursuant to our business combinations accounting policy, we estimated the preliminary fair values of net tangible and intangible assets acquired, and the excess of the consideration transferred over the aggregate of such fair values was recorded as goodwill. The preliminary fair values of net tangible assets and intangible assets acquired were based on preliminary valuations, and our estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date). The primary areas that remain preliminary relate to the fair values of intangible assets acquired, certain tangible assets and liabilities acquired, certain legal matters, income and non-income based taxes and residual goodwill. We expect to continue to obtain information to assist us in determining the fair values of the net assets acquired during the measurement period. The following table summarizes the estimated preliminary fair values of net tangible and intangible assets acquired from Cerner: (in millions) Cash and marketable securities $ 769 Trade receivables, net 793 Property, plant and equipment, net 1,512 Intangible assets 11,972 Goodwill 17,837 Other assets 839 Accounts payable and other liabilities (993 ) Deferred revenues (297 ) Senior notes and other borrowings (1,600 ) Deferred tax liabilities, net (2,607 ) Total $ 28,225 All of the $1.6 billion of senior notes and other borrowings assumed through our Cerner acquisition were paid during the first half of fiscal 2023. Refer to Note 5 below for more information. We do not expect the goodwill recognized as a part of our acquisition of Cerner to be deductible for income tax purposes. Other Fiscal 2023 and 2022 Acquisitions During the first nine months of fiscal 2023 and full year fiscal 2022, 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 condensed consolidated financial statements. Unaudited Pro Forma Financial Information The unaudited pro forma financial information in the table below summarizes the combined results of operations for Oracle and Cerner. The unaudited pro forma financial information for all periods presented included the business combination accounting effects resulting from this acquisition, including amortization charges from acquired intangible assets (certain of which are preliminary), stock-based compensation charges for unvested restricted stock-based awards and stock options assumed and the related tax effects as though Cerner was combined as of the beginning of fiscal 2022. The unaudited pro forma financial information as presented below is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of fiscal 2022. The unaudited pro forma financial information for the three and nine months ended February 28, 2023 and 2022 combined the historical results of Oracle for the three and nine months ended February 28, 2023 and 2022, respectively, the historical results of Cerner for the three and nine months ended December 31, 2022 and 2021, respectively (adjusted due to differences in reporting periods and considering the date we acquired Cerner), and the effects of the pro forma adjustments listed above. The unaudited pro forma financial information was as follows: Three Months Ended February 28, Nine Months Ended February 28, (in millions, except per share data) 2023 2022 2023 2022 Total revenues $ 12,398 $ 11,956 $ 36,228 $ 34,954 Net income $ 1,896 $ 1,938 $ 5,137 $ 2,143 Basic earnings per share $ 0.70 $ 0.73 $ 1.91 $ 0.79 Diluted earnings per share $ 0.68 $ 0.70 $ 1.86 $ 0.77 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Feb. 28, 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 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): February 28, 2023 May 31, 2022 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 $ 1,297 $ — $ 1,297 $ 12,842 $ — $ 12,842 Time deposits and other 157 433 590 240 280 520 Derivative financial instruments — 181 181 — — — Total assets $ 1,454 $ 614 $ 2,068 $ 13,082 $ 280 $ 13,362 Liabilities: Derivative financial instruments $ — $ 145 $ 145 $ — $ 97 $ 97 Our marketable securities investments consist of 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 February 28, 2023 and May 31, 2022, 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 $89.9 billion and $75.9 billion of senior notes and other borrowings and the related fair value hedges that we had outstanding as of February 28, 2023 and May 31, 2022, respectively, the estimated fair values of the senior notes and other borrowings and the related fair value hedges using Level 2 inputs at February 28, 2023 and May 31, 2022 were $78.5 billion and $67.0 billion, respectively. |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 9 Months Ended |
Feb. 28, 2023 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | 4. INTANGIBLE ASSETS AND GOODWILL The changes in intangible assets for fiscal 2023 and the net book value of intangible assets as of February 28, 2023 and May 31, 2022 were as follows: Intangible Assets, Gross Accumulated Amortization Intangible Assets, Net Weighted Average Useful Life (2) (Dollars in millions) May 31, 2022 Additions & Adjustments, net (1) February 28, 2023 May 31, 2022 Expense February 28, 2023 May 31, 2022 February 28, 2023 Developed technology $ 3,966 $ 2,379 $ 6,345 $ (3,660 ) $ (621 ) $ (4,281 ) $ 306 $ 2,064 4 Cloud services and license support agreements and related relationships 5,260 4,318 9,578 (4,194 ) (1,135 ) (5,329 ) 1,066 4,249 7 Cloud license and on-premise license agreements and related relationships 356 2,437 2,793 (343 ) (342 ) (685 ) 13 2,108 7 Other 865 2,845 3,710 (810 ) (614 ) (1,424 ) 55 2,286 4 Total intangible assets, net $ 10,447 $ 11,979 $ 22,426 $ (9,007 ) $ (2,712 ) $ (11,719 ) $ 1,440 $ 10,707 (1) Amounts also included any changes in intangible asset balances for the periods presented that resulted from foreign currency translations. (2) Represents weighted-average useful lives (in years) of intangible assets acquired during fiscal 2023. As of February 28, 2023, estimated future amortization expenses related to intangible assets were as follows (in millions): Remainder of fiscal 2023 $ 869 Fiscal 2024 2,995 Fiscal 2025 2,283 Fiscal 2026 1,620 Fiscal 2027 664 Fiscal 2028 635 Thereafter 1,641 Total intangible assets, net $ 10,707 The changes in the carrying amounts of goodwill, net, which is generally not deductible for tax purposes, for our operating segments for the nine months ended February 28, 2023 were as follows: (in millions) Cloud and License Hardware Services Total Goodwill, net Balances as of May 31, 2022 $ 39,938 $ 2,367 $ 1,506 $ 43,811 Goodwill from acquisitions 16,460 346 1,065 17,871 Goodwill adjustments, net (1) 5 1 (189 ) (183 ) Balances as of February 28, 2023 $ 56,403 $ 2,714 $ 2,382 $ 61,499 (1) Pursuant to our business combinations accounting policy, we recorded goodwill adjustments for the effects on goodwill of changes to net assets acquired during the period that such a change is identified, provided that any such change is within the measurement period (up to one year from the date of the acquisition). Amounts also include any changes in goodwill balances for the period presented that resulted from foreign currency translations and certain other adjustments. |
NOTES PAYABLE AND OTHER BORROWI
NOTES PAYABLE AND OTHER BORROWINGS | 9 Months Ended |
Feb. 28, 2023 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE AND OTHER BORROWINGS | 5. NOTES PAYABLE AND OTHER BORROWINGS Delayed Draw Term Loan Credit Agreement On June 8, 2022, we borrowed $15.7 billion under a delayed draw term loan credit agreement (Bridge Credit Agreement) that we entered into in March 2022 to partly finance our acquisition of Cerner. The Bridge Credit Agreement provides that, subject to certain exceptions, net cash proceeds received by us from certain debt and equity issuances shall result in mandatory prepayments under the Bridge Credit Agreement. Interest is based on either (a) a Term Secured Overnight Financing Rate (SOFR)-based formula plus a margin of 100.0 basis points to 137.5 basis points, depending on the credit rating assigned to our long-term senior unsecured debt, or (b) a Base Rate formula plus a margin of 0.0 basis points to 37.5 basis points, depending on the same such credit rating, each as set forth in the Bridge Credit Agreement. The effective interest rate for the third quarter and first nine months of fiscal 2023 was 5.36% and 3.57%, respectively. We fully repaid the amount borrowed under the Bridge Credit Agreement during the first nine months of fiscal 2023. Five-Year Term Loan Credit Agreement On August 16, 2022, we entered into a $4.4 billion term loan credit agreement (Term Loan Credit Agreement), which provides for a total term loan commitment of $4.4 billion, comprised of a $3.6 billion term loan (Term Loan 1 Facility) and a $790 million term loan (Term Loan 2 Facility and, together with the Term Loan 1 Facility, the Term Loan Facilities). The proceeds of the Term Loan Facilities may only be used to refinance indebtedness incurred under the Bridge Credit Agreement and to pay related fees and expenses. On November 2, 2022, the total term loan commitment was increased by $1.3 billion, comprised of $1.1 billion under the Term Loan 1 Facility and $170 million under the Term Loan 2 Facility pursuant to the terms of the Term Loan Credit Agreement. We may request additional commitments under the Term Loan Credit Agreement up to a maximum of $6.0 billion (each, an Incremental Borrowing). The use of proceeds of any Incremental Borrowing will be specified at the time of such borrowing and may include working capital purposes and other general corporate purposes. We initially borrowed $4.4 billion on August 16, 2022, and we borrowed an incremental $1.3 billion on November 2, 2022, each under the Term Loan Facilities. We used the net proceeds of the borrowings under the Term Loan Credit Agreement to reduce the amount of indebtedness outstanding under the Bridge Credit Agreement. The effective interest rate for these borrowings during the third quarter and first nine months of fiscal 2023 was 6.10% and 5.32%, respectively. The Term Loan Credit Agreement provides for repayment of borrowings under the Term Loan Facilities as follows: • an amount equal to the amount borrowed reduced by any prepayments multiplied by 1.25% on September 30, 2024 and quarterly thereafter until June 30, 2026; • an amount equal to the amount borrowed reduced by any prepayments multiplied by 2.50% on September 30, 2026 and quarterly thereafter until June 30, 2027; and • any remaining unpaid principal balance under the Term Loan 1 Facility will become fully due and payable on August 16, 2027 and any remaining unpaid principal balance under the Term Loan 2 Facility will become fully due and payable on August 16, 2025 (subject to any extension of the Term Loan 2 Facility termination date, as set out below), unless the outstanding loans are prepaid earlier at the request of Oracle or accelerated by the lenders if an event of default occurs. The termination date of the Term Loan 2 Facility may be extended at our sole option by up to 2 years. The termination date of each Term Loan Facility may also be further extended at each lender’s option by up to 2 years. Interest is based on either (a) a Term SOFR-based formula plus a margin of 147.5 basis points to 197.5 basis points, depending on the credit rating assigned to our long-term senior unsecured debt, or (b) a Base Rate formula plus a margin of 47.5 basis points to 97.5 basis points, depending on the same such credit rating, each as set forth in the Term Loan Credit Agreement. The Term Loan Credit Agreement contains certain customary representations and warranties, covenants and events of default, including the requirement that the ratio of “Consolidated EBITDA” to “Consolidated Net Interest Expense” (each term as defined in the Term Loan Credit Agreement) of Oracle and its subsidiaries shall not be less than 3.0 to 1.0 at the end of any fiscal quarter during the period that the Term Loan Credit Agreement is effective. If an event of default occurs under the Term Loan Credit Agreement and is not cured within the applicable grace period or waived, any unpaid amounts under the Term Loan Credit Agreement may be declared immediately due and payable. We were in compliance with such covenants as of February 28, 2023. The summary above does not purport to be complete and is qualified in its entirety by reference to the full text of the Term Loan Credit Agreement. Senior Notes In the first nine months of fiscal 2023, we issued $12.3 billion, par value, of fixed-rate senior notes comprised of the following: February 28, 2023 (Dollars in millions) Date of Issuance Amount Effective Interest Rate $1,000, 5.80%, due November 2025 November 2022 $ 1,000 5.93% $750, 4.50%, due May 2028 February 2023 750 4.60% $1,250, 6.15%, due November 2029 November 2022 1,250 6.21% $750, 4.65%, due May 2030 February 2023 750 4.75% $2,250, 6.25%, due November 2032 November 2022 2,250 6.32% $1,500, 4.90%, due February 2033 February 2023 1,500 4.95% $2,500, 6.90%, due November 2052 November 2022 2,500 6.94% $2,250, 5.55%, due February 2053 February 2023 2,250 5.62% Total fixed rate senior notes $ 12,250 Unamortized discount/issuance costs (67 ) Total fixed-rate senior notes, net $ 12,183 We used the net proceeds from the issuance of the senior notes to repay the amount of indebtedness outstanding under the Bridge Credit Agreement, to repay $1.3 billion of senior notes due February 2023 and to partially repay our outstanding commercial paper notes. The interest is payable semi-annually. We may redeem some or all of the senior notes of each series prior to their maturity, subject to certain restrictions, and the payment of an applicable make-whole premium in certain instances. The senior notes rank pari passu with any other existing and future unsecured and unsubordinated indebtedness of Oracle. All existing and future indebtedness and liabilities of the subsidiaries of Oracle are or will be effectively senior to the senior notes. We were in compliance with all senior notes-related covenants at February 28, 2023. The material terms and conditions of the senior notes are set forth in, and the foregoing description of the senior notes is qualified in its entirety by reference to, the Officers’ Certificates filed as Exhibit 4.1 to Oracle’s Current Report on Form 8-K filed on November 9, 2022 and filed herewith as Exhibit 4.01 and incorporated by reference herein. Cash Flow Hedge In August 2022, we entered into certain interest rate swap agreements to manage the related interest rate risk of $4.4 billion borrowings under the Term Loan Credit Agreement by effectively converting the floating-rate to fixed-rate. The economic effect of the swap agreements was to eliminate the uncertainty of the cash flows associated with floating-rate interest payments of the Term Loan Credit Agreement by a fixed annual interest rate of 3.07%, plus a margin depending on the credit rating assigned to our long-term senior unsecured debt as mentioned above. We have designated these interest rate swap agreements as qualifying hedging instruments and are accounting for these as cash flow hedges pursuant to ASC 815, Derivatives and Hedging The fair values of these interest rate swap agreements are recognized either as non-current assets or non-current liabilities in our consolidated balance sheets. Changes in the fair values of these interest rate swap agreements are reported in accumulated other comprehensive loss in our consolidated balance sheets and an amount is reclassified out of accumulated other comprehensive loss into non-operating income or expense, net in the same period that We do not use any interest rate swap agreements for trading purposes. Cerner Senior Notes and Other Borrowings In connection with our acquisition of Cerner, we assumed: • $1.0 billion par value of legacy Cerner senior notes. The acquisition triggered a mandatory offer to prepay such senior notes in accordance with the terms of the underlying note purchase agreements. Holders of $931 million par value of senior notes exercised the option for prepayment, and accordingly, such notes together with accrued interest were redeemed on June 8, 2022, and the remaining outstanding senior notes together with accrued interest were redeemed during the second quarter of fiscal 2023; and • $600 million of principal amount of revolving credit loans. The entire loan along with accrued interest was settled and the credit facility was terminated on June 8, 2022. Commercial Paper Program and Commercial Paper Notes During the first quarter of fiscal 2023, our commercial paper program was increased to $6.0 billion. Our commercial paper program allows us to issue and sell unsecured short-term promissory notes pursuant to a private placement exemption from the registration requirements under federal and state securities laws pursuant to dealer agreements with various banks and an Issuing and Paying Agency Agreement with Deutsche Bank Trust Company Americas. There were $1.9 billion of outstanding commercial paper notes as of February 28, 2023 (none outstanding as of May 31, 2022) that mature at various dates through May 2023. The effective interest rate including issuance costs was 5.24% and 4.55% for the third quarter and first nine months of fiscal 2023, respectively. We use the net proceeds from the issuance of commercial paper for general corporate purposes. There have been no other significant changes in our notes payable or other borrowing arrangements that were disclosed in our Annual Report on Form 10-K for the fiscal year ended May 31, 2022. |
RESTRUCTURING ACTIVITIES
RESTRUCTURING ACTIVITIES | 9 Months Ended |
Feb. 28, 2023 | |
Restructuring And Related Activities [Abstract] | |
RESTRUCTURING ACTIVITIES | 6 . RESTRUCTURING ACTIVITIES Fiscal 2022 Oracle Restructuring Plan During fiscal 2022, 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 (2022 Restructuring Plan). In the first nine months of fiscal 2023, our management supplemented the 2022 Restructuring Plan to reflect additional actions that we expect to take. The total estimated restructuring costs associated with the 2022 Restructuring Plan are up to $927 million and will be recorded to the restructuring expense line item within our condensed consolidated statements of operations as they are incurred. We recorded $359 million and $117 million of restructuring expenses in connection with the 2022 Restructuring Plan in the first nine months of fiscal 2023 and 2022, respectively. We expect to incur some of the estimated remaining $342 million through the end of fiscal 2023. Any changes to the estimates or timing of executing the 2022 Restructuring Plan will be reflected in our future results of operations. Summary of All Plans Accrued May 31, 2022 (2) Nine Months Ended February 28, 2023 Accrued February 28, 2023 (2) Total Costs Accrued to Date Total Expected Program Costs (in millions) Initial Costs (3) Adj. to Cost (4) Cash Payments Others (5) 2022 Restructuring Plan (1) Cloud and license $ 34 $ 206 $ (3 ) $ (163 ) $ — $ 74 $ 291 $ 515 Hardware 7 14 — (13 ) (1 ) 7 25 32 Services 9 18 — (14 ) (1 ) 12 34 51 Other 10 127 — (103 ) — 34 235 329 Total 2022 Restructuring Plan $ 60 $ 365 $ (3 ) $ (293 ) $ (2 ) $ 127 $ 585 $ 927 Total other restructuring plans (6) $ 71 $ — $ (3 ) $ (17 ) $ (2 ) $ 49 Total restructuring plans $ 131 $ 365 $ (6 ) $ (310 ) $ (4 ) $ 176 (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 February 28, 2023 and May 31, 2022, 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 ) Represents foreign currency translation and certain other non-cash adjustments. ( 6 ) Other restructuring plans presented in the table 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 period presented but for which the periodic impact to our condensed consolidated statements of operations was not significant. |
DEFERRED REVENUES
DEFERRED REVENUES | 9 Months Ended |
Feb. 28, 2023 | |
Deferred Revenue Disclosure [Abstract] | |
DEFERRED REVENUES | 7 . DEFERRED REVENUES Deferred revenues consisted of the following: (in millions) February 28, 2023 May 31, 2022 Cloud services and license support $ 7,528 $ 7,406 Hardware 498 555 Services 524 360 Cloud license and on-premise license 48 36 Deferred revenues, current 8,598 8,357 Deferred revenues, non-current (in other non-current liabilities) 790 753 Total deferred revenues $ 9,388 $ 9,110 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. |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 9 Months Ended |
Feb. 28, 2023 | |
Stockholders Equity Note [Abstract] | |
STOCKHOLDERS' DEFICIT | 8 . STOCKHOLDERS’ DEFICIT Common Stock Repurchases Our Board of Directors has approved a program for us to repurchase shares of our common stock. As of February 28, 2023, approximately $8.3 billion remained available for stock repurchases pursuant to our stock repurchase program. We repurchased 15.4 million shares for $1.1 billion during the nine months ended February 28, 2023 and 177.9 million shares for $15.6 billion during the nine months ended February 28, 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 plan. Our stock repurchase program may be accelerated, suspended, delayed or discontinued at any time. Dividends on Common Stock In March 2023, our Board of Directors declared a quarterly cash dividend of $0.40 per share of our outstanding common stock, an increase of $0.08 per share over the dividend declared in December 2022. The dividend is payable on April 24, 2023 to stockholders of record as of the close of business on April 11, 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 2023 Stock‑Based Awards Activity and Compensation Expense During the first nine months of fiscal 2023, we issued 74 million restricted stock-based units (RSUs), substantially all of which were part of our annual stock-based award process, and assumed 5 million RSUs in connection with our acquisition of Cerner . All issued and assumed RSUs are subject to service-based vesting restrictions. These fiscal 2023 stock-based award issuances were partially offset by stock-based award forfeitures and cancellations of 10 million shares during the first nine months of fiscal 2023 . The RSUs that were granted during the nine months ended February 28, 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, 2022. Stock-based compensation expense is included in the following operating expense line items in our condensed consolidated statements of operations: Three Months Ended February 28, Nine Months Ended February 28, (in millions) 2023 2022 2023 2022 Cloud services and license support $ 114 $ 55 $ 319 $ 145 Hardware 5 4 13 11 Services 39 17 99 49 Sales and marketing 158 113 433 328 Research and development 517 421 1,448 1,188 General and administrative 91 64 271 179 Total stock-based compensation $ 924 $ 674 $ 2,583 $ 1,900 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Feb. 28, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 9 . 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 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 rates were 14.5% and 13.8% for the three and nine months ended February 28, 2023, respectively, and 18.4% and 12.3% for the three and nine months ended February 28, 2022, respectively. Our net deferred tax assets were $5.3 billion and $6.8 billion as of February 28, 2023 and May 31, 2022, 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 2011 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, 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. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Feb. 28, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 10 . SEGMENT INFORMATION ASC 280, Segment Reporting We have three businesses—cloud and license, hardware and services—each of which is comprised of a single 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 February 28, Nine Months Ended February 28, (in millions) 2023 2022 2023 2022 Cloud and license: Revenues $ 10,211 $ 8,926 $ 29,565 $ 25,901 Cloud services and license support expenses 1,842 1,231 5,209 3,568 Sales and marketing expenses 1,874 1,760 5,738 5,083 Margin (1) $ 6,495 $ 5,935 $ 18,618 $ 17,250 Hardware: Revenues $ 811 $ 798 $ 2,424 $ 2,328 Hardware products and support expenses 236 237 758 696 Sales and marketing expenses 81 88 243 265 Margin (1) $ 494 $ 473 $ 1,423 $ 1,367 Services: Revenues $ 1,376 $ 789 $ 4,129 $ 2,371 Services expenses 1,147 633 3,265 1,873 Margin (1) $ 229 $ 156 $ 864 $ 498 Totals: Revenues $ 12,398 $ 10,513 $ 36,118 $ 30,600 Expenses 5,180 3,949 15,213 11,485 Margin (1) $ 7,218 $ 6,564 $ 20,905 $ 19,115 ( 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 February 28, Nine Months Ended February 28, (in millions) 2023 2022 2023 2022 Total margin for operating segments $ 7,218 $ 6,564 $ 20,905 $ 19,115 Research and development (2,146 ) (1,816 ) (6,397 ) (5,254 ) General and administrative (402 ) (335 ) (1,179 ) (953 ) Amortization of intangible assets (886 ) (279 ) (2,712 ) (882 ) Acquisition related and other (37 ) (20 ) (140 ) (4,707 ) Restructuring (78 ) (19 ) (359 ) (89 ) Stock-based compensation for operating segments (316 ) (189 ) (864 ) (533 ) Expense allocations and other, net (93 ) (84 ) (301 ) (273 ) Interest expense (908 ) (667 ) (2,550 ) (2,051 ) Non-operating expenses, net (134 ) (315 ) (386 ) (348 ) Income before income taxes $ 2,218 $ 2,840 $ 6,017 $ 4,025 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 February 28, Nine Months Ended February 28, (in millions) 2023 2022 2023 2022 Americas $ 7,671 $ 5,849 $ 22,649 $ 16,905 EMEA (1) 3,067 3,014 8,653 8,751 Asia Pacific 1,660 1,650 4,816 4,944 Total revenues $ 12,398 $ 10,513 $ 36,118 $ 30,600 (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 February 28, Nine Months Ended February 28, (in millions) 2023 2022 2023 2022 Cloud services $ 4,053 $ 2,791 $ 11,445 $ 7,919 License support 4,870 4,846 14,493 14,643 Total cloud services and license support revenues $ 8,923 $ 7,637 $ 25,938 $ 22,562 The following table presents our cloud services and license support revenues by applications and infrastructure ecosystems: Three Months Ended February 28, Nine Months Ended February 28, (in millions) 2023 2022 2023 2022 Applications cloud services and license support $ 4,166 $ 3,187 $ 12,262 $ 9,377 Infrastructure cloud services and license support 4,757 4,450 13,676 13,185 Total cloud services and license support revenues $ 8,923 $ 7,637 $ 25,938 $ 22,562 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Feb. 28, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 1 1 . 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 February 28, Nine Months Ended February 28, (in millions, except per share data) 2023 2022 2023 2022 Net income $ 1,896 $ 2,319 $ 5,184 $ 3,528 Weighted average common shares outstanding 2,698 2,670 2,692 2,711 Dilutive effect of employee stock plans 78 84 65 89 Dilutive weighted average common shares outstanding 2,776 2,754 2,757 2,800 Basic earnings per share $ 0.70 $ 0.87 $ 1.93 $ 1.30 Diluted earnings per share $ 0.68 $ 0.84 $ 1.88 $ 1.26 Shares subject to anti-dilutive restricted stock-based awards and stock options excluded from calculation (1) 33 33 56 32 (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 Options arrangements. Such shares could be dilutive in the future. |
LEGAL PROCEEDINGS
LEGAL PROCEEDINGS | 9 Months Ended |
Feb. 28, 2023 | |
Legal Proceedings [Abstract] | |
LEGAL PROCEEDINGS | 1 2 . 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. (NetSuite) 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. The court has not yet issued a decision regarding our Chief Executive Officer and Chief Technology Officer. 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. Securities Class Action and Derivative Litigation Concerning Oracle’s Cloud Business On August 10, 2018, a putative class action, brought by an alleged stockholder of Oracle, was filed in the U.S. District Court for the Northern District of California against us, our Chief Technology Officer, our then-two Chief Executive Officers, two other Oracle executives, and one former Oracle executive. As noted above, Mr. Hurd, one of our then-two Chief Executive Officers, passed away on October 18, 2019. On March 8, 2019, plaintiff filed an amended complaint. Plaintiff alleges that the defendants made or are responsible for false and misleading statements regarding Oracle’s cloud business. Plaintiff further alleges that the former Oracle executive engaged in insider trading. Plaintiff seeks a ruling that this case may proceed as a class action, and seeks damages, attorneys’ fees and costs, and unspecified declaratory/injunctive relief. On April 19, 2019, defendants moved to dismiss plaintiff’s amended complaint. On December 17, 2019, the court granted this motion, giving plaintiffs an opportunity to file an amended complaint, which plaintiff filed on February 17, 2020. On April 23, 2020, defendants filed a motion to dismiss, and the court held a hearing on this motion on September 24, 2020. On March 22, 2021, the court granted in part and denied in part this motion. The court dismissed the action as to one Oracle executive and the former Oracle executive. The court permitted plaintiff to proceed with only a narrow omissions theory against the remaining defendants. On April 21, 2021, defendants filed an answer to the complaint. On October 8, 2021, plaintiffs filed a motion for class certification, which the court granted on May 9, 2022. On May 23, 2022, defendants filed a petition in the Ninth Circuit Court of Appeals for permission to appeal the court’s order granting class certification, and plaintiffs filed an opposition on June 2, 2022. On June 3, 2022, the District Court “So Ordered” a stipulation by the parties, which vacated all dates in this case because the parties had reached an agreement to settle this action, subject to the court’s approval. On June 8, 2022, the Ninth Circuit Court of Appeals granted defendants’ unopposed motion to stay the petition for permission to appeal in light of the proposed settlement. On September 15, 2022, the District Court granted plaintiffs’ motion for preliminary approval of the proposed settlement, under which the matter is resolved for a payment by the Company of $ 17,500,000 . This sum includes all fees and costs. On January 12, 2023, the court held a final approval hearing, and approved the proposed settlement. On January 13, 2023, a judgment dismissing this case was entered . No notice of appeal was filed, and the time to appeal has expired. This matter is now concluded . On February 12 and May 8, 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 the 10b-5 class action described immediately above. The parties agreed to stay the derivative case pending resolution of defendants’ motion to dismiss the securities case, which the court granted in part and denied in part on March 22, 2021. Plaintiff 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 class action discussed above caused harm to Oracle, and 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. Plaintiffs seek a ruling that this case may proceed as a derivative action, a finding that defendants are liable for breaching their fiduciary duties, damages, 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. While the parties were scheduled to participate in a mediation on October 14, 2022, that mediation was canceled. On October 28, 2022, the District Court “So Ordered” a stipulation extending the stay in this case until November 30, 2022, and on December 7, 2022, the court signed a second stipulation, extending the stay until January 31, 2023. The parties are meeting and conferring regarding how this litigation will proceed. 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. |
BASIS OF PRESENTATION, RECENT_2
BASIS OF PRESENTATION, RECENT ACCOUNTING PRONOUNCEMENTS AND OTHER (Policies) | 9 Months Ended |
Feb. 28, 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 (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, 2022. The comparability of our condensed consolidated financial statements as of and for the nine months ended February 28, 2023 was impacted by $4.7 billion of certain litigation related charges during the first nine months of fiscal 2022. Refer to Note 16 to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended May 31, 2022 for additional information. On June 8, 2022, we completed our acquisition of Cerner Corporation (Cerner), a provider of digital information systems used within hospitals and health systems, by means of a merger of one of our wholly owned subsidiaries with and into Cerner such that Cerner became an indirect, wholly owned subsidiary of Oracle. Through our acquisition of Cerner, we enhanced our offerings of each of our three existing businesses, cloud and license, hardware and services. The condensed consolidated financial statements included in this Quarterly Report include the financial results of Cerner prospectively from the date of acquisition. Refer to Note 2 below for additional details regarding our acquisition of Cerner. 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 our fiscal year ending May 31, 2023. 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, 2022 that had a significant impact on our condensed consolidated financial statements or notes thereto as of and for the nine months ended February 28, 2023. |
Use of Estimates | Use of Estimates Our condensed consolidated financial statements are prepared in accordance with GAAP as set forth in the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification, and we consider various staff accounting bulletins and other applicable guidance issued by the SEC. These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. To the extent that there are differences between these estimates, judgments or assumptions and actual results, our consolidated financial statements will be affected. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting among available alternatives would not produce a materially different result. During the first quarter of fiscal 2023, we completed an assessment of the useful lives of our servers and increased the estimate of the useful lives from four years to five years effective at the beginning of fiscal 2023. Based on the carrying value of our servers as of May 31, 2022, this change in accounting estimate decreased our total operating expenses by $101 million and $346 million for the third quarter and first nine months of fiscal 2023, respectively. |
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 February 28, 2023 and May 31, 2022 and our condensed consolidated statements of cash flows for the nine months ended February 28, 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 February 28, 2023 and May 31, 2022. The revenues recognized during the nine months ended February 28, 2023 and 2022, respectively, that were included in the opening deferred revenues balances as of May 31, 2022 and 2021, respectively, were approximately $7.7 billion and $8.1 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 and nine months ended February 28, 2023 and 2022, respectively. 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, 2022, were $62.3 billion as of February 28, 2023, approximately 48% 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 $344 million and $1.5 billion for the three and nine months ended February 28, 2023, respectively, and $352 million and $1.4 billion for the three and nine months ended February 28, 2022, respectively. |
Non-Marketable Investments | Non-Marketable Investments Our non-marketable debt investments and equity securities and related instruments totaled $2.1 billion and $1.2 billion as of February 28, 2023 and May 31, 2022, respectively, and are included in other non-current assets in the accompanying 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. For the nine months ended February 28, 2022, acquisition related and other expenses included certain litigation related charges. Three Months Ended February 28, Nine Months Ended February 28, (in millions) 2023 2022 2023 2022 Transitional and other employee related costs $ 15 $ 2 $ 52 $ 6 Business combination adjustments, net 2 5 10 8 Other, net 20 13 78 4,693 Total acquisition related and other expenses $ 37 $ 20 $ 140 $ 4,707 |
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 February 28, Nine Months Ended February 28, (in millions) 2023 2022 2023 2022 Interest income $ 90 $ 16 $ 180 $ 56 Foreign currency losses, net (55 ) (29 ) (181 ) (109 ) Noncontrolling interests in income (41 ) (42 ) (120 ) (131 ) Losses from equity investments, net (122 ) (197 ) (249 ) (138 ) Other losses, net (6 ) (63 ) (16 ) (26 ) Total non-operating expenses, net $ (134 ) $ (315 ) $ (386 ) $ (348 ) |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Financial Instruments In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04) and also issued subsequent amendments to the initial guidance (collectively, Topic 848). Topic 848 provides optional guidance for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued. We will adopt Topic 848 when our relevant contracts are modified upon transition to alternative reference rates. We do not expect our adoption of Topic 848 to have a material impact on our consolidated financial statements. |
Fair Value Measurements | We perform fair value measurements in accordance with FASB Accounting Standards Codification (ASC) 820, Fair Value Measurement 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 |
BASIS OF PRESENTATION, RECENT_3
BASIS OF PRESENTATION, RECENT ACCOUNTING PRONOUNCEMENTS AND OTHER (Tables) | 9 Months Ended |
Feb. 28, 2023 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Acquisition Related and Other Expenses | Three Months Ended February 28, Nine Months Ended February 28, (in millions) 2023 2022 2023 2022 Transitional and other employee related costs $ 15 $ 2 $ 52 $ 6 Business combination adjustments, net 2 5 10 8 Other, net 20 13 78 4,693 Total acquisition related and other expenses $ 37 $ 20 $ 140 $ 4,707 |
Non-Operating (Expenses) Income, net | Three Months Ended February 28, Nine Months Ended February 28, (in millions) 2023 2022 2023 2022 Interest income $ 90 $ 16 $ 180 $ 56 Foreign currency losses, net (55 ) (29 ) (181 ) (109 ) Noncontrolling interests in income (41 ) (42 ) (120 ) (131 ) Losses from equity investments, net (122 ) (197 ) (249 ) (138 ) Other losses, net (6 ) (63 ) (16 ) (26 ) Total non-operating expenses, net $ (134 ) $ (315 ) $ (386 ) $ (348 ) |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 9 Months Ended |
Feb. 28, 2023 | |
Business Combinations [Abstract] | |
Fair Values of Net Assets Acquired from Cerner | (in millions) Cash and marketable securities $ 769 Trade receivables, net 793 Property, plant and equipment, net 1,512 Intangible assets 11,972 Goodwill 17,837 Other assets 839 Accounts payable and other liabilities (993 ) Deferred revenues (297 ) Senior notes and other borrowings (1,600 ) Deferred tax liabilities, net (2,607 ) Total $ 28,225 |
Unaudited Pro Forma Financial Information | Three Months Ended February 28, Nine Months Ended February 28, (in millions, except per share data) 2023 2022 2023 2022 Total revenues $ 12,398 $ 11,956 $ 36,228 $ 34,954 Net income $ 1,896 $ 1,938 $ 5,137 $ 2,143 Basic earnings per share $ 0.70 $ 0.73 $ 1.91 $ 0.79 Diluted earnings per share $ 0.68 $ 0.70 $ 1.86 $ 0.77 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Feb. 28, 2023 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | February 28, 2023 May 31, 2022 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 $ 1,297 $ — $ 1,297 $ 12,842 $ — $ 12,842 Time deposits and other 157 433 590 240 280 520 Derivative financial instruments — 181 181 — — — Total assets $ 1,454 $ 614 $ 2,068 $ 13,082 $ 280 $ 13,362 Liabilities: Derivative financial instruments $ — $ 145 $ 145 $ — $ 97 $ 97 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 9 Months Ended |
Feb. 28, 2023 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets, Gross Accumulated Amortization Intangible Assets, Net Weighted Average Useful Life (2) (Dollars in millions) May 31, 2022 Additions & Adjustments, net (1) February 28, 2023 May 31, 2022 Expense February 28, 2023 May 31, 2022 February 28, 2023 Developed technology $ 3,966 $ 2,379 $ 6,345 $ (3,660 ) $ (621 ) $ (4,281 ) $ 306 $ 2,064 4 Cloud services and license support agreements and related relationships 5,260 4,318 9,578 (4,194 ) (1,135 ) (5,329 ) 1,066 4,249 7 Cloud license and on-premise license agreements and related relationships 356 2,437 2,793 (343 ) (342 ) (685 ) 13 2,108 7 Other 865 2,845 3,710 (810 ) (614 ) (1,424 ) 55 2,286 4 Total intangible assets, net $ 10,447 $ 11,979 $ 22,426 $ (9,007 ) $ (2,712 ) $ (11,719 ) $ 1,440 $ 10,707 (1) Amounts also included any changes in intangible asset balances for the periods presented that resulted from foreign currency translations. (2) Represents weighted-average useful lives (in years) of intangible assets acquired during fiscal 2023. |
Estimated Future Amortization Expenses Related to Intangible Assets | Remainder of fiscal 2023 $ 869 Fiscal 2024 2,995 Fiscal 2025 2,283 Fiscal 2026 1,620 Fiscal 2027 664 Fiscal 2028 635 Thereafter 1,641 Total intangible assets, net $ 10,707 |
Goodwill | (in millions) Cloud and License Hardware Services Total Goodwill, net Balances as of May 31, 2022 $ 39,938 $ 2,367 $ 1,506 $ 43,811 Goodwill from acquisitions 16,460 346 1,065 17,871 Goodwill adjustments, net (1) 5 1 (189 ) (183 ) Balances as of February 28, 2023 $ 56,403 $ 2,714 $ 2,382 $ 61,499 (1) Pursuant to our business combinations accounting policy, we recorded goodwill adjustments for the effects on goodwill of changes to net assets acquired during the period that such a change is identified, provided that any such change is within the measurement period (up to one year from the date of the acquisition). Amounts also include any changes in goodwill balances for the period presented that resulted from foreign currency translations and certain other adjustments. |
NOTES PAYABLE AND OTHER BORRO_2
NOTES PAYABLE AND OTHER BORROWINGS (Tables) | 9 Months Ended |
Feb. 28, 2023 | |
Debt Disclosure [Abstract] | |
Notes Payable and Other Borrowings | February 28, 2023 (Dollars in millions) Date of Issuance Amount Effective Interest Rate $1,000, 5.80%, due November 2025 November 2022 $ 1,000 5.93% $750, 4.50%, due May 2028 February 2023 750 4.60% $1,250, 6.15%, due November 2029 November 2022 1,250 6.21% $750, 4.65%, due May 2030 February 2023 750 4.75% $2,250, 6.25%, due November 2032 November 2022 2,250 6.32% $1,500, 4.90%, due February 2033 February 2023 1,500 4.95% $2,500, 6.90%, due November 2052 November 2022 2,500 6.94% $2,250, 5.55%, due February 2053 February 2023 2,250 5.62% Total fixed rate senior notes $ 12,250 Unamortized discount/issuance costs (67 ) Total fixed-rate senior notes, net $ 12,183 |
RESTRUCTURING ACTIVITIES (Table
RESTRUCTURING ACTIVITIES (Tables) | 9 Months Ended |
Feb. 28, 2023 | |
Restructuring And Related Activities [Abstract] | |
Summary of All Plans | Accrued May 31, 2022 (2) Nine Months Ended February 28, 2023 Accrued February 28, 2023 (2) Total Costs Accrued to Date Total Expected Program Costs (in millions) Initial Costs (3) Adj. to Cost (4) Cash Payments Others (5) 2022 Restructuring Plan (1) Cloud and license $ 34 $ 206 $ (3 ) $ (163 ) $ — $ 74 $ 291 $ 515 Hardware 7 14 — (13 ) (1 ) 7 25 32 Services 9 18 — (14 ) (1 ) 12 34 51 Other 10 127 — (103 ) — 34 235 329 Total 2022 Restructuring Plan $ 60 $ 365 $ (3 ) $ (293 ) $ (2 ) $ 127 $ 585 $ 927 Total other restructuring plans (6) $ 71 $ — $ (3 ) $ (17 ) $ (2 ) $ 49 Total restructuring plans $ 131 $ 365 $ (6 ) $ (310 ) $ (4 ) $ 176 (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 February 28, 2023 and May 31, 2022, 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 ) Represents foreign currency translation and certain other non-cash adjustments. ( 6 ) Other restructuring plans presented in the table 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 period presented but for which the periodic impact to our condensed consolidated statements of operations was not significant. |
DEFERRED REVENUES (Tables)
DEFERRED REVENUES (Tables) | 9 Months Ended |
Feb. 28, 2023 | |
Deferred Revenue Disclosure [Abstract] | |
Deferred Revenues | (in millions) February 28, 2023 May 31, 2022 Cloud services and license support $ 7,528 $ 7,406 Hardware 498 555 Services 524 360 Cloud license and on-premise license 48 36 Deferred revenues, current 8,598 8,357 Deferred revenues, non-current (in other non-current liabilities) 790 753 Total deferred revenues $ 9,388 $ 9,110 |
STOCKHOLDERS' DEFICIT (Tables)
STOCKHOLDERS' DEFICIT (Tables) | 9 Months Ended |
Feb. 28, 2023 | |
Stockholders Equity Note [Abstract] | |
Stock-Based Compensation Expense | Three Months Ended February 28, Nine Months Ended February 28, (in millions) 2023 2022 2023 2022 Cloud services and license support $ 114 $ 55 $ 319 $ 145 Hardware 5 4 13 11 Services 39 17 99 49 Sales and marketing 158 113 433 328 Research and development 517 421 1,448 1,188 General and administrative 91 64 271 179 Total stock-based compensation $ 924 $ 674 $ 2,583 $ 1,900 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Feb. 28, 2023 | |
Segment Reporting [Abstract] | |
Summary of Businesses Results | Three Months Ended February 28, Nine Months Ended February 28, (in millions) 2023 2022 2023 2022 Cloud and license: Revenues $ 10,211 $ 8,926 $ 29,565 $ 25,901 Cloud services and license support expenses 1,842 1,231 5,209 3,568 Sales and marketing expenses 1,874 1,760 5,738 5,083 Margin (1) $ 6,495 $ 5,935 $ 18,618 $ 17,250 Hardware: Revenues $ 811 $ 798 $ 2,424 $ 2,328 Hardware products and support expenses 236 237 758 696 Sales and marketing expenses 81 88 243 265 Margin (1) $ 494 $ 473 $ 1,423 $ 1,367 Services: Revenues $ 1,376 $ 789 $ 4,129 $ 2,371 Services expenses 1,147 633 3,265 1,873 Margin (1) $ 229 $ 156 $ 864 $ 498 Totals: Revenues $ 12,398 $ 10,513 $ 36,118 $ 30,600 Expenses 5,180 3,949 15,213 11,485 Margin (1) $ 7,218 $ 6,564 $ 20,905 $ 19,115 ( 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 February 28, Nine Months Ended February 28, (in millions) 2023 2022 2023 2022 Total margin for operating segments $ 7,218 $ 6,564 $ 20,905 $ 19,115 Research and development (2,146 ) (1,816 ) (6,397 ) (5,254 ) General and administrative (402 ) (335 ) (1,179 ) (953 ) Amortization of intangible assets (886 ) (279 ) (2,712 ) (882 ) Acquisition related and other (37 ) (20 ) (140 ) (4,707 ) Restructuring (78 ) (19 ) (359 ) (89 ) Stock-based compensation for operating segments (316 ) (189 ) (864 ) (533 ) Expense allocations and other, net (93 ) (84 ) (301 ) (273 ) Interest expense (908 ) (667 ) (2,550 ) (2,051 ) Non-operating expenses, net (134 ) (315 ) (386 ) (348 ) Income before income taxes $ 2,218 $ 2,840 $ 6,017 $ 4,025 |
Disaggregation of Revenue by Geography and Ecosystem | Three Months Ended February 28, Nine Months Ended February 28, (in millions) 2023 2022 2023 2022 Americas $ 7,671 $ 5,849 $ 22,649 $ 16,905 EMEA (1) 3,067 3,014 8,653 8,751 Asia Pacific 1,660 1,650 4,816 4,944 Total revenues $ 12,398 $ 10,513 $ 36,118 $ 30,600 (1) Comprised of Europe, the Middle East and Africa Three Months Ended February 28, Nine Months Ended February 28, (in millions) 2023 2022 2023 2022 Cloud services $ 4,053 $ 2,791 $ 11,445 $ 7,919 License support 4,870 4,846 14,493 14,643 Total cloud services and license support revenues $ 8,923 $ 7,637 $ 25,938 $ 22,562 Three Months Ended February 28, Nine Months Ended February 28, (in millions) 2023 2022 2023 2022 Applications cloud services and license support $ 4,166 $ 3,187 $ 12,262 $ 9,377 Infrastructure cloud services and license support 4,757 4,450 13,676 13,185 Total cloud services and license support revenues $ 8,923 $ 7,637 $ 25,938 $ 22,562 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Feb. 28, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Three Months Ended February 28, Nine Months Ended February 28, (in millions, except per share data) 2023 2022 2023 2022 Net income $ 1,896 $ 2,319 $ 5,184 $ 3,528 Weighted average common shares outstanding 2,698 2,670 2,692 2,711 Dilutive effect of employee stock plans 78 84 65 89 Dilutive weighted average common shares outstanding 2,776 2,754 2,757 2,800 Basic earnings per share $ 0.70 $ 0.87 $ 1.93 $ 1.30 Diluted earnings per share $ 0.68 $ 0.84 $ 1.88 $ 1.26 Shares subject to anti-dilutive restricted stock-based awards and stock options excluded from calculation (1) 33 33 56 32 (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 Options arrangements. Such shares could be dilutive in the future. |
BASIS OF PRESENTATION, RECENT_4
BASIS OF PRESENTATION, RECENT ACCOUNTING PRONOUNCEMENTS AND OTHER Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Jun. 08, 2022 Subsidiary | Feb. 28, 2023 USD ($) | Aug. 31, 2022 | Feb. 28, 2022 USD ($) | Feb. 28, 2023 USD ($) Business | Feb. 28, 2022 USD ($) | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
Litigation related charges | $ 4,700 | |||||
Number of owned wholly subsidiaries | Subsidiary | 1 | |||||
Number of businesses | Business | 3 | |||||
Decrease in total operating expense due to change in accounting estimate | $ 101 | $ 346 | ||||
Contract with Customer, Asset and Liability [Abstract] | ||||||
Revenues recognized included in opening deferred revenues balances | 7,700 | 8,100 | ||||
Revenue, Performance Obligation [Abstract] | ||||||
Remaining performance obligation, amount | 62,300 | 62,300 | ||||
Sales of Financing Receivables [Abstract] | ||||||
Sales of financing receivables | $ 344 | $ 352 | $ 1,500 | $ 1,400 | ||
Servers [Member] | Minimum [Member] | ||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
Useful life of asset | 4 years | |||||
Servers [Member] | Maximum [Member] | ||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
Useful life of asset | 5 years |
BASIS OF PRESENTATION, RECENT_5
BASIS OF PRESENTATION, RECENT ACCOUNTING PRONOUNCEMENTS AND OTHER Narrative (Details1) | Feb. 28, 2023 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-03-01 | |
Revenue, Performance Obligation [Abstract] | |
Remaining performance obligation, percentage | 48% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-03-01 | |
Revenue, Performance Obligation [Abstract] | |
Remaining performance obligation, percentage | 35% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 2 years |
BASIS OF PRESENTATION, RECENT_6
BASIS OF PRESENTATION, RECENT ACCOUNTING PRONOUNCEMENTS AND OTHER (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Feb. 28, 2023 | Feb. 28, 2022 | Feb. 28, 2023 | Feb. 28, 2022 | May 31, 2022 | |
Equity Securities, FV-NI and without Readily Determinable Fair Value [Abstract] | |||||
Non-marketable debt investments and equity securities and related instruments | $ 2,100 | $ 2,100 | $ 1,200 | ||
Acquisition Related and Other Expenses [Abstract] | |||||
Transitional and other employee related costs | 15 | $ 2 | 52 | $ 6 | |
Business combination adjustments, net | 2 | 5 | 10 | 8 | |
Other, net | 20 | 13 | 78 | 4,693 | |
Total acquisition related and other expenses | 37 | 20 | 140 | 4,707 | |
Non-Operating Expenses, net [Abstract] | |||||
Interest income | 90 | 16 | 180 | 56 | |
Foreign currency losses, net | (55) | (29) | (181) | (109) | |
Noncontrolling interests in income | (41) | (42) | (120) | (131) | |
Losses from equity investments, net | (122) | (197) | (249) | (138) | |
Other losses, net | (6) | (63) | (16) | (26) | |
Total non-operating expenses, net | $ (134) | $ (315) | $ (386) | $ (348) |
ACQUISITIONS Narrative (Details
ACQUISITIONS Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Jun. 08, 2022 | Jan. 19, 2022 | Feb. 28, 2023 | Feb. 28, 2022 | Feb. 28, 2023 | Feb. 28, 2022 | |
Business Acquisition [Line Items] | ||||||
Total revenues | $ 12,398 | $ 10,513 | $ 36,118 | $ 30,600 | ||
Fair values of restricted stock-based awards and stock options assumed | 55 | $ 0 | ||||
Business combination, senior notes and other borrowings assumed | $ 1,600 | |||||
Business combination, assumed senior notes and other borrowings, repaid | 1,600 | |||||
Cerner Corporation [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Merger agreement date | Jan. 19, 2022 | |||||
Total revenues | $ 1,500 | $ 4,400 | ||||
Total preliminary purchase price | 28,225 | |||||
Preliminary purchase price, in cash | 28,200 | |||||
Fair values of restricted stock-based awards and stock options assumed | 55 | |||||
Business combination, senior notes and other borrowings assumed | $ 1,600 | |||||
Common Stock [Member] | Cerner Corporation [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Tender offer purchase share price | $ 95 |
FAIR VALUES OF NET ASSETS ACQUI
FAIR VALUES OF NET ASSETS ACQUIRED FROM CERNER (Details) - USD ($) $ in Millions | Jun. 08, 2022 | Feb. 28, 2023 | May 31, 2022 |
Business Acquisition [Line Items] | |||
Goodwill | $ 61,499 | $ 43,811 | |
Senior notes and other borrowings | $ (1,600) | ||
Cerner Corporation [Member] | |||
Business Acquisition [Line Items] | |||
Cash and marketable securities | 769 | ||
Trade receivables, net | 793 | ||
Property, plant and equipment, net | 1,512 | ||
Intangible assets | 11,972 | ||
Goodwill | 17,837 | ||
Other assets | 839 | ||
Accounts payable and other liabilities | (993) | ||
Deferred revenues | (297) | ||
Senior notes and other borrowings | (1,600) | ||
Deferred tax liabilities, net | (2,607) | ||
Total preliminary purchase price | $ 28,225 |
ACQUISITIONS - UNAUDITED PRO FO
ACQUISITIONS - UNAUDITED PRO FORMA FINANCIAL INFORMATION (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2023 | Feb. 28, 2022 | Feb. 28, 2023 | Feb. 28, 2022 | |
Acquisitions Proforma [Abstract] | ||||
Total revenues | $ 12,398 | $ 11,956 | $ 36,228 | $ 34,954 |
Net income | $ 1,896 | $ 1,938 | $ 5,137 | $ 2,143 |
Basic earnings per share | $ 0.70 | $ 0.73 | $ 1.91 | $ 0.79 |
Diluted earnings per share | $ 0.68 | $ 0.70 | $ 1.86 | $ 0.77 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Millions | Feb. 28, 2023 | May 31, 2022 |
Assets [Abstract] | ||
Derivative financial instruments | $ 181 | $ 0 |
Total assets | 2,068 | 13,362 |
Liabilities [Abstract] | ||
Derivative financial instruments | 145 | 97 |
Money Market Funds [Member] | ||
Assets [Abstract] | ||
Investments and cash and cash equivalents | 1,297 | 12,842 |
Time Deposits and Other [Member] | ||
Assets [Abstract] | ||
Investments and cash and cash equivalents | 590 | 520 |
Fair Value Measurements Using Input Types Level 1 [Member] | ||
Assets [Abstract] | ||
Derivative financial instruments | 0 | 0 |
Total assets | 1,454 | 13,082 |
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 | 1,297 | 12,842 |
Fair Value Measurements Using Input Types Level 1 [Member] | Time Deposits and Other [Member] | ||
Assets [Abstract] | ||
Investments and cash and cash equivalents | 157 | 240 |
Fair Value Measurements Using Input Types Level 2 [Member] | ||
Assets [Abstract] | ||
Derivative financial instruments | 181 | 0 |
Total assets | 614 | 280 |
Liabilities [Abstract] | ||
Derivative financial instruments | 145 | 97 |
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 | $ 433 | $ 280 |
FAIR VALUE MEASUREMENTS Narrati
FAIR VALUE MEASUREMENTS Narrative (Details) - USD ($) $ in Millions | Feb. 28, 2023 | May 31, 2022 |
Marketable security investments maturity information [Abstract] | ||
Total debt, carrying value | $ 12,250 | |
Senior Notes and Other Borrowings [Member] | ||
Marketable security investments maturity information [Abstract] | ||
Total debt, carrying value | 89,900 | $ 75,900 |
Fair Value Measurements Using Input Types Level 2 [Member] | Senior Notes and Other Borrowings [Member] | ||
Marketable security investments maturity information [Abstract] | ||
Total debt, fair value | $ 78,500 | $ 67,000 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Feb. 28, 2023 | Feb. 28, 2022 | Feb. 28, 2023 | Feb. 28, 2022 | May 31, 2022 | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Intangible Assets, Gross | $ 22,426 | $ 22,426 | $ 10,447 | |||
Additions & Adjustments, net | [1] | 11,979 | ||||
Accumulated Amortization, | (11,719) | (11,719) | (9,007) | |||
Expense | (886) | $ (279) | (2,712) | $ (882) | ||
Intangible Assets, Net | 10,707 | 10,707 | 1,440 | |||
Developed technology [Member] | ||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Intangible Assets, Gross | 6,345 | 6,345 | 3,966 | |||
Additions & Adjustments, net | [1] | 2,379 | ||||
Accumulated Amortization, | (4,281) | (4,281) | (3,660) | |||
Expense | (621) | |||||
Intangible Assets, Net | 2,064 | $ 2,064 | 306 | |||
Weighted Average Useful Life | [2] | 4 years | ||||
Cloud services and license support agreements and related relationships [Member] | ||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Intangible Assets, Gross | 9,578 | $ 9,578 | 5,260 | |||
Additions & Adjustments, net | [1] | 4,318 | ||||
Accumulated Amortization, | (5,329) | (5,329) | (4,194) | |||
Expense | (1,135) | |||||
Intangible Assets, Net | 4,249 | $ 4,249 | 1,066 | |||
Weighted Average Useful Life | [2] | 7 years | ||||
Cloud license and on premise license agreements and related relationships [Member] | ||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Intangible Assets, Gross | 2,793 | $ 2,793 | 356 | |||
Additions & Adjustments, net | [1] | 2,437 | ||||
Accumulated Amortization, | (685) | (685) | (343) | |||
Expense | (342) | |||||
Intangible Assets, Net | 2,108 | $ 2,108 | 13 | |||
Weighted Average Useful Life | [2] | 7 years | ||||
Other [Member] | ||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Intangible Assets, Gross | 3,710 | $ 3,710 | 865 | |||
Additions & Adjustments, net | [1] | 2,845 | ||||
Accumulated Amortization, | (1,424) | (1,424) | (810) | |||
Expense | (614) | |||||
Intangible Assets, Net | $ 2,286 | $ 2,286 | $ 55 | |||
Weighted Average Useful Life | [2] | 4 years | ||||
[1] Amounts also included any changes in intangible asset balances for the periods presented that resulted from foreign currency translations. Represents weighted-average useful lives (in years) of intangible assets acquired during fiscal 2023. |
INTANGIBLE ASSETS AMORTIZATION
INTANGIBLE ASSETS AMORTIZATION (Details) - USD ($) $ in Millions | Feb. 28, 2023 | May 31, 2022 |
Finite lived intangible assets future amortization expense [Abstract] | ||
Remainder of fiscal 2023 | $ 869 | |
Fiscal 2024 | 2,995 | |
Fiscal 2025 | 2,283 | |
Fiscal 2026 | 1,620 | |
Fiscal 2027 | 664 | |
Fiscal 2028 | 635 | |
Thereafter | 1,641 | |
Intangible Assets, Net | $ 10,707 | $ 1,440 |
GOODWILL (Details)
GOODWILL (Details) $ in Millions | 9 Months Ended | |
Feb. 28, 2023 USD ($) | ||
Goodwill [Line Items] | ||
Balances at period start | $ 43,811 | |
Goodwill from acquisitions | 17,871 | |
Goodwill adjustments, net | (183) | [1] |
Balances at period end | 61,499 | |
Cloud and License [Member] | ||
Goodwill [Line Items] | ||
Balances at period start | 39,938 | |
Goodwill from acquisitions | 16,460 | |
Goodwill adjustments, net | 5 | [1] |
Balances at period end | 56,403 | |
Hardware [Member] | ||
Goodwill [Line Items] | ||
Balances at period start | 2,367 | |
Goodwill from acquisitions | 346 | |
Goodwill adjustments, net | 1 | [1] |
Balances at period end | 2,714 | |
Services [Member] | ||
Goodwill [Line Items] | ||
Balances at period start | 1,506 | |
Goodwill from acquisitions | 1,065 | |
Goodwill adjustments, net | (189) | [1] |
Balances at period end | $ 2,382 | |
[1]Pursuant to our business combinations accounting policy, we recorded goodwill adjustments for the effects on goodwill of changes to net assets acquired during the period that such a change is identified, provided that any such change is within the measurement period (up to one year from the date of the acquisition). Amounts also include any changes in goodwill balances for the period presented that resulted from foreign currency translations and certain other adjustments. |
NOTES PAYABLE AND OTHER BORRO_3
NOTES PAYABLE AND OTHER BORROWINGS (Details) $ in Millions | 9 Months Ended |
Feb. 28, 2023 USD ($) | |
Debt Instrument [Line Items] | |
Total debt, carrying value | $ 12,250 |
Unamortized discount/issuance costs | (67) |
Total fixed-rate senior notes, net | 12,183 |
Senior Notes Due November2025 | |
Debt Instrument [Line Items] | |
Senior notes, par value | $ 1,000 |
Stated interest rate percentage | 5.80% |
Maturity date | Nov. 10, 2025 |
Total debt, carrying value | $ 1,000 |
Date of issuance | Nov. 09, 2022 |
Effective interest rate | 5.93% |
Senior Notes Due May2028 | |
Debt Instrument [Line Items] | |
Senior notes, par value | $ 750 |
Stated interest rate percentage | 4.50% |
Maturity date | May 31, 2028 |
Total debt, carrying value | $ 750 |
Date of issuance | Feb. 06, 2023 |
Effective interest rate | 4.60% |
Senior Notes Due November2029 | |
Debt Instrument [Line Items] | |
Senior notes, par value | $ 1,250 |
Stated interest rate percentage | 6.15% |
Maturity date | Nov. 09, 2029 |
Total debt, carrying value | $ 1,250 |
Date of issuance | Nov. 09, 2022 |
Effective interest rate | 6.21% |
Senior Notes Due November2032 | |
Debt Instrument [Line Items] | |
Senior notes, par value | $ 2,250 |
Stated interest rate percentage | 6.25% |
Maturity date | Nov. 09, 2032 |
Total debt, carrying value | $ 2,250 |
Date of issuance | Nov. 09, 2022 |
Effective interest rate | 6.32% |
Senior Notes Due May2030 | |
Debt Instrument [Line Items] | |
Senior notes, par value | $ 750 |
Stated interest rate percentage | 4.65% |
Maturity date | May 31, 2030 |
Total debt, carrying value | $ 750 |
Date of issuance | Feb. 06, 2023 |
Effective interest rate | 4.75% |
Senior Notes Due November2052 | |
Debt Instrument [Line Items] | |
Senior notes, par value | $ 2,500 |
Stated interest rate percentage | 6.90% |
Maturity date | Nov. 09, 2052 |
Total debt, carrying value | $ 2,500 |
Date of issuance | Nov. 09, 2022 |
Effective interest rate | 6.94% |
Senior Notes Due February2033 | |
Debt Instrument [Line Items] | |
Senior notes, par value | $ 1,500 |
Stated interest rate percentage | 4.90% |
Maturity date | Feb. 28, 2033 |
Total debt, carrying value | $ 1,500 |
Date of issuance | Feb. 06, 2023 |
Effective interest rate | 4.95% |
Senior Notes Due February2053 | |
Debt Instrument [Line Items] | |
Senior notes, par value | $ 2,250 |
Stated interest rate percentage | 5.55% |
Maturity date | Feb. 28, 2053 |
Total debt, carrying value | $ 2,250 |
Date of issuance | Feb. 06, 2023 |
Effective interest rate | 5.62% |
NOTES PAYABLE AND OTHER BORRO_4
NOTES PAYABLE AND OTHER BORROWINGS Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Aug. 16, 2022 | Jun. 08, 2022 | Feb. 28, 2023 | Feb. 28, 2023 | Nov. 02, 2022 | Aug. 31, 2022 | May 31, 2022 | |
Debt Instrument [Line Items] | |||||||
Fixed rate senior notes, par value | $ 12,300,000,000 | ||||||
Business combination, senior notes and other borrowings assumed, repaid | $ 1,600,000,000 | ||||||
Business combination, assumed senior notes and other borrowings, repaid | $ 1,600,000,000 | ||||||
Cerner Corporation [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Business combination, senior notes and other borrowings assumed, repaid | 1,000,000,000 | ||||||
Cerner Corporation [Member] | Senior Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Business combination, assumed senior notes and other borrowings, repaid | 931,000,000 | ||||||
Cerner Corporation [Member] | Revolving Credit Loans [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Business combination, assumed senior notes and other borrowings, repaid | 600,000,000 | ||||||
Bridge Credit Agreement [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Revolving credit facility | $ 15,700,000,000 | ||||||
Effective interest rate | 5.36% | 3.57% | |||||
Repayment of senior notes | $ 1,300,000,000 | ||||||
Maturity date | 2023-02 | ||||||
Bridge Credit Agreement [Member] | Minimum [Member] | SOFR [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Revolving credit facility, basis spread on variable rate | 1% | ||||||
Bridge Credit Agreement [Member] | Minimum [Member] | Base Rate [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Revolving credit facility, basis spread on variable rate | 0% | ||||||
Bridge Credit Agreement [Member] | Maximum [Member] | SOFR [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Revolving credit facility, basis spread on variable rate | 1.375% | ||||||
Bridge Credit Agreement [Member] | Maximum [Member] | Base Rate [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Revolving credit facility, basis spread on variable rate | 0.375% | ||||||
Term Loan Credit Agreement [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Revolving credit facility | $ 4,400,000,000 | $ 1,300,000,000 | |||||
Effective interest rate | 6.10% | 5.32% | |||||
Line of credit facility, additional borrowing capacity | $ 6,000,000,000 | ||||||
Term Loan Credit Agreement [Member] | Prepayments Multiplied By 1.25% [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of borrowed reduced by prepayments | 1.25% | ||||||
Line of credit facility, prepayment date | Sep. 30, 2024 | ||||||
Line of credit facility, prepayment, quarterly thereafter date | Jun. 30, 2026 | ||||||
Term Loan Credit Agreement [Member] | Prepayments Multiplied By 2.50% [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of borrowed reduced by prepayments | 2.50% | ||||||
Line of credit facility, prepayment date | Sep. 30, 2026 | ||||||
Line of credit facility, prepayment, quarterly thereafter date | Jun. 30, 2027 | ||||||
Term Loan Credit Agreement [Member] | Minimum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument covenant ratio | 1 | ||||||
Term Loan Credit Agreement [Member] | Minimum [Member] | SOFR [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Revolving credit facility, basis spread on variable rate | 1.475% | ||||||
Term Loan Credit Agreement [Member] | Minimum [Member] | Base Rate [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Revolving credit facility, basis spread on variable rate | 0.475% | ||||||
Term Loan Credit Agreement [Member] | Maximum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility termination term | 2 years | ||||||
Debt instrument covenant ratio | 3 | ||||||
Term Loan Credit Agreement [Member] | Maximum [Member] | SOFR [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Revolving credit facility, basis spread on variable rate | 1.975% | ||||||
Term Loan Credit Agreement [Member] | Maximum [Member] | Base Rate [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Revolving credit facility, basis spread on variable rate | 0.975% | ||||||
Term Loan 1 Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Revolving credit facility | $ 3,600,000,000 | 1,100,000,000 | |||||
Line of credit facility, fully due and payable | Aug. 16, 2027 | ||||||
Term Loan 2 Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Revolving credit facility | $ 790,000,000 | $ 170,000,000 | |||||
Line of credit facility, fully due and payable | Aug. 16, 2025 | ||||||
Term Loan 2 Facility [Member] | Maximum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility termination term | 2 years | ||||||
Interest Rate Swap Agreements [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Derivative fixed interest rate | 3.07% | 3.07% | |||||
Commercial Paper [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Revolving credit facility | $ 6,000,000,000 | ||||||
Effective interest rate | 5.24% | 4.55% | |||||
Outstanding notes | $ 1,900,000,000 | $ 1,900,000,000 | $ 0 |
RESTRUCTURING ACTIVITIES Narrat
RESTRUCTURING ACTIVITIES Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Feb. 28, 2023 | Feb. 28, 2022 | Feb. 28, 2023 | Feb. 28, 2022 | ||
Restructuring reserve [Line Items] | |||||
Restructuring expenses | $ 78 | $ 19 | $ 359 | $ 89 | |
Fiscal 2022 Oracle Restructuring [Member] | |||||
Restructuring reserve [Line Items] | |||||
Total estimated restructuring costs | [1] | 927 | 927 | ||
Restructuring expenses | 359 | $ 117 | |||
Remaining expenses to incur | 342 | $ 342 | |||
Expected completion date | May 31, 2023 | ||||
Fiscal 2022 Oracle Restructuring [Member] | Maximum [Member] | |||||
Restructuring reserve [Line Items] | |||||
Total estimated restructuring costs | $ 927 | $ 927 | |||
[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. |
RESTRUCTURING ACTIVITIES (Detai
RESTRUCTURING ACTIVITIES (Details) $ in Millions | 9 Months Ended | |
Feb. 28, 2023 USD ($) | [2] | |
Restructuring reserve [Line Items] | ||
Accrued at period start | $ 131 | [1] |
Initial Costs | 365 | [3] |
Adjustments to Cost | (6) | [4] |
Cash Payments | (310) | |
Others | (4) | [5] |
Accrued at period end | 176 | [1] |
Fiscal 2022 Oracle Restructuring [Member] | ||
Restructuring reserve [Line Items] | ||
Accrued at period start | 60 | [1] |
Initial Costs | 365 | [3] |
Adjustments to Cost | (3) | [4] |
Cash Payments | (293) | |
Others | (2) | [5] |
Accrued at period end | 127 | [1] |
Total Costs Accrued to Date | 585 | |
Total Expected Program Costs | 927 | |
Fiscal 2022 Oracle Restructuring [Member] | Other [Member] | ||
Restructuring reserve [Line Items] | ||
Accrued at period start | 10 | [1] |
Initial Costs | 127 | [3] |
Adjustments to Cost | 0 | [4] |
Cash Payments | (103) | |
Others | 0 | [5] |
Accrued at period end | 34 | [1] |
Total Costs Accrued to Date | 235 | |
Total Expected Program Costs | 329 | |
Fiscal 2022 Oracle Restructuring [Member] | Cloud and License [Member] | Operating Segments [Member] | ||
Restructuring reserve [Line Items] | ||
Accrued at period start | 34 | [1] |
Initial Costs | 206 | [3] |
Adjustments to Cost | (3) | [4] |
Cash Payments | (163) | |
Others | 0 | [5] |
Accrued at period end | 74 | [1] |
Total Costs Accrued to Date | 291 | |
Total Expected Program Costs | 515 | |
Fiscal 2022 Oracle Restructuring [Member] | Hardware [Member] | Operating Segments [Member] | ||
Restructuring reserve [Line Items] | ||
Accrued at period start | 7 | [1] |
Initial Costs | 14 | [3] |
Adjustments to Cost | 0 | [4] |
Cash Payments | (13) | |
Others | (1) | [5] |
Accrued at period end | 7 | [1] |
Total Costs Accrued to Date | 25 | |
Total Expected Program Costs | 32 | |
Fiscal 2022 Oracle Restructuring [Member] | Services [Member] | Operating Segments [Member] | ||
Restructuring reserve [Line Items] | ||
Accrued at period start | 9 | [1] |
Initial Costs | 18 | [3] |
Adjustments to Cost | 0 | [4] |
Cash Payments | (14) | |
Others | (1) | [5] |
Accrued at period end | 12 | [1] |
Total Costs Accrued to Date | 34 | |
Total Expected Program Costs | 51 | |
Other Restructuring Plans [Member] | ||
Restructuring reserve [Line Items] | ||
Accrued at period start | 71 | [1],[6] |
Initial Costs | 0 | [3],[6] |
Adjustments to Cost | (3) | [4],[6] |
Cash Payments | (17) | [6] |
Others | (2) | [5],[6] |
Accrued at period end | $ 49 | [1],[6] |
[1]As of February 28, 2023 and May 31, 2022, 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]Represents foreign currency translation and certain other non-cash adjustments.[6]Other restructuring plans presented in the table 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 period presented but for which the periodic impact to our condensed consolidated statements of operations was not significant. |
DEFERRED REVENUES (Details)
DEFERRED REVENUES (Details) - USD ($) $ in Millions | Feb. 28, 2023 | May 31, 2022 |
Deferred Revenues [Line Items] | ||
Deferred revenues, current | $ 8,598 | $ 8,357 |
Deferred revenues, non-current (in other non-current liabilities) | 790 | 753 |
Total deferred revenues | 9,388 | 9,110 |
Cloud services and license support [Member] | Cloud and License [Member] | ||
Deferred Revenues [Line Items] | ||
Deferred revenues, current | 7,528 | 7,406 |
Hardware [Member] | Hardware [Member] | ||
Deferred Revenues [Line Items] | ||
Deferred revenues, current | 498 | 555 |
Services [Member] | Services [Member] | ||
Deferred Revenues [Line Items] | ||
Deferred revenues, current | 524 | 360 |
Cloud license and on-premise license [Member] | Cloud and License [Member] | ||
Deferred Revenues [Line Items] | ||
Deferred revenues, current | $ 48 | $ 36 |
STOCKHOLDERS' DEFICIT Narrative
STOCKHOLDERS' DEFICIT Narrative (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Billions | 9 Months Ended | ||
Mar. 09, 2023 | Feb. 28, 2023 | Feb. 28, 2022 | |
Stock Repurchases [Abstract] | |||
Amount available for future repurchases | $ 8.3 | ||
Repurchases of common stock (in shares) | 15.4 | 177.9 | |
Repurchased amount | $ 1.1 | $ 15.6 | |
Stock-based compensation expense and valuations of stock awards [Abstract] | |||
Restricted stock-based units granted (in shares) | 74 | ||
Forfeitures and cancellations (in shares) | 10 | ||
Cerner Corporation [Member] | |||
Stock-based compensation expense and valuations of stock awards [Abstract] | |||
Restricted stock-based units granted (in shares) | 5 | ||
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 | Apr. 24, 2023 | ||
Dividend record date | Apr. 11, 2023 | ||
Increase in Quarterly Cash Dividend Per Share | $ 0.08 |
STOCKHOLDERS' DEFICIT (Details)
STOCKHOLDERS' DEFICIT (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2023 | Feb. 28, 2022 | Feb. 28, 2023 | Feb. 28, 2022 | |
Stock-based compensation expense and valuations of stock awards [Abstract] | ||||
Total stock-based compensation | $ 924 | $ 674 | $ 2,583 | $ 1,900 |
Cloud services and license support [Member] | ||||
Stock-based compensation expense and valuations of stock awards [Abstract] | ||||
Total stock-based compensation | 114 | 55 | 319 | 145 |
Hardware [Member] | ||||
Stock-based compensation expense and valuations of stock awards [Abstract] | ||||
Total stock-based compensation | 5 | 4 | 13 | 11 |
Services [Member] | ||||
Stock-based compensation expense and valuations of stock awards [Abstract] | ||||
Total stock-based compensation | 39 | 17 | 99 | 49 |
Sales and marketing [Member] | ||||
Stock-based compensation expense and valuations of stock awards [Abstract] | ||||
Total stock-based compensation | 158 | 113 | 433 | 328 |
Research and development [Member] | ||||
Stock-based compensation expense and valuations of stock awards [Abstract] | ||||
Total stock-based compensation | 517 | 421 | 1,448 | 1,188 |
General and administrative [Member] | ||||
Stock-based compensation expense and valuations of stock awards [Abstract] | ||||
Total stock-based compensation | $ 91 | $ 64 | $ 271 | $ 179 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Billions | 3 Months Ended | 9 Months Ended | |||
Feb. 28, 2023 | Feb. 28, 2022 | Feb. 28, 2023 | Feb. 28, 2022 | May 31, 2022 | |
Income Tax Disclosure [Abstract] | |||||
Effective income tax rate | 14.50% | 18.40% | 13.80% | 12.30% | |
Deferred Tax Assets, Net [Abstract] | |||||
Net deferred tax assets | $ 5.3 | $ 5.3 | $ 6.8 |
SEGMENT INFORMATION Narrative (
SEGMENT INFORMATION Narrative (Details) | 9 Months Ended |
Feb. 28, 2023 Business Segment | |
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 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Feb. 28, 2023 | Feb. 28, 2022 | Feb. 28, 2023 | Feb. 28, 2022 | ||
Segment reporting information [Line Items] | |||||
Revenues | $ 12,398 | $ 10,513 | $ 36,118 | $ 30,600 | |
Cloud services and license support expenses | [1] | 1,980 | 1,305 | 5,606 | 3,778 |
Sales and marketing expenses | [1] | 2,150 | 2,004 | 6,544 | 5,811 |
Margin | 3,260 | 3,822 | 8,953 | 6,424 | |
Operating Segments [Member] | |||||
Segment reporting information [Line Items] | |||||
Revenues | 12,398 | 10,513 | 36,118 | 30,600 | |
Expenses | 5,180 | 3,949 | 15,213 | 11,485 | |
Margin | [2] | 7,218 | 6,564 | 20,905 | 19,115 |
Operating Segments [Member] | Cloud and License [Member] | |||||
Segment reporting information [Line Items] | |||||
Revenues | 10,211 | 8,926 | 29,565 | 25,901 | |
Cloud services and license support expenses | 1,842 | 1,231 | 5,209 | 3,568 | |
Sales and marketing expenses | 1,874 | 1,760 | 5,738 | 5,083 | |
Margin | [2] | 6,495 | 5,935 | 18,618 | 17,250 |
Operating Segments [Member] | Hardware [Member] | |||||
Segment reporting information [Line Items] | |||||
Revenues | 811 | 798 | 2,424 | 2,328 | |
Hardware products and support expenses | 236 | 237 | 758 | 696 | |
Sales and marketing expenses | 81 | 88 | 243 | 265 | |
Margin | [2] | 494 | 473 | 1,423 | 1,367 |
Operating Segments [Member] | Services [Member] | |||||
Segment reporting information [Line Items] | |||||
Revenues | 1,376 | 789 | 4,129 | 2,371 | |
Services expenses | 1,147 | 633 | 3,265 | 1,873 | |
Margin | [2] | $ 229 | $ 156 | $ 864 | $ 498 |
[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. |
SEGMENT INFORMATION RECONCILIAT
SEGMENT INFORMATION RECONCILIATION (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Feb. 28, 2023 | Feb. 28, 2022 | Feb. 28, 2023 | Feb. 28, 2022 | ||
Reconciliation of Total Operating Segment Margin to Income Before Provision for Income Taxes [Abstract] | |||||
Total margin for operating segments | $ 3,260 | $ 3,822 | $ 8,953 | $ 6,424 | |
Research and development | (2,146) | (1,816) | (6,397) | (5,254) | |
General and administrative | (402) | (335) | (1,179) | (953) | |
Amortization of intangible assets | (886) | (279) | (2,712) | (882) | |
Acquisition related and other | (37) | (20) | (140) | (4,707) | |
Restructuring | (78) | (19) | (359) | (89) | |
Stock-based compensation for operating segments | (316) | (189) | (864) | (533) | |
Expense allocations and other, net | (93) | (84) | (301) | (273) | |
Interest expense | (908) | (667) | (2,550) | (2,051) | |
Non-operating expenses, net | (134) | (315) | (386) | (348) | |
Income before income taxes | 2,218 | 2,840 | 6,017 | 4,025 | |
Operating Segments [Member] | |||||
Reconciliation of Total Operating Segment Margin to Income Before Provision for Income Taxes [Abstract] | |||||
Total margin for operating segments | [1] | $ 7,218 | $ 6,564 | $ 20,905 | $ 19,115 |
[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. |
SUMMARY OF TOTAL REVENUES BY GE
SUMMARY OF TOTAL REVENUES BY GEOGRAPHIC REGION (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Feb. 28, 2023 | Feb. 28, 2022 | Feb. 28, 2023 | Feb. 28, 2022 | ||
Disaggregation of Revenue [Line Items] | |||||
Total revenues | $ 12,398 | $ 10,513 | $ 36,118 | $ 30,600 | |
Americas [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues | 7,671 | 5,849 | 22,649 | 16,905 | |
EMEA [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues | [1] | 3,067 | 3,014 | 8,653 | 8,751 |
Asia Pacific [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues | $ 1,660 | $ 1,650 | $ 4,816 | $ 4,944 | |
[1]Comprised of Europe, the Middle East and Africa |
SUMMARY OF CLOUD SERVICES AND L
SUMMARY OF CLOUD SERVICES AND LICENSE SUPPORT REVENUES BY ECOSYSTEMS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2023 | Feb. 28, 2022 | Feb. 28, 2023 | Feb. 28, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 12,398 | $ 10,513 | $ 36,118 | $ 30,600 |
Cloud Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 4,053 | 2,791 | 11,445 | 7,919 |
License Support [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 4,870 | 4,846 | 14,493 | 14,643 |
Cloud services and license support [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 8,923 | 7,637 | 25,938 | 22,562 |
Applications Cloud Services and License Support [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 4,166 | 3,187 | 12,262 | 9,377 |
Infrastructure Cloud Services and License Support [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 4,757 | $ 4,450 | $ 13,676 | $ 13,185 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Feb. 28, 2023 | Feb. 28, 2022 | Feb. 28, 2023 | Feb. 28, 2022 | ||
Earnings Per Share [Abstract] | |||||
Net income | $ 1,896 | $ 2,319 | $ 5,184 | $ 3,528 | |
Weighted average common shares outstanding | 2,698 | 2,670 | 2,692 | 2,711 | |
Dilutive effect of employee stock plans | 78 | 84 | 65 | 89 | |
Dilutive weighted average common shares outstanding | 2,776 | 2,754 | 2,757 | 2,800 | |
Basic earnings per share | $ 0.70 | $ 0.87 | $ 1.93 | $ 1.30 | |
Diluted earnings per share | $ 0.68 | $ 0.84 | $ 1.88 | $ 1.26 | |
Shares subject to anti-dilutive restricted stock-based awards and stock options excluded from calculation | [1] | 33 | 33 | 56 | 32 |
[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 Options arrangements. Such shares could be dilutive in the future. |
LEGAL PROCEEDINGS (Details)
LEGAL PROCEEDINGS (Details) | Sep. 15, 2022 USD ($) |
Securities Class Action and Derivative Litigation Concerning Oracle's Cloud Business [Member] | |
Loss Contingencies [Line Items] | |
Damages sought, value | $ 17,500,000 |