DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - shares | 3 Months Ended | |
Aug. 31, 2021 | Sep. 06, 2021 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Aug. 31, 2021 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
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) | 2,738,179,000 | |
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 | Aug. 31, 2021 | May 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 23,059 | $ 30,098 |
Marketable securities | 16,251 | 16,456 |
Trade receivables, net of allowances for doubtful accounts of $402 and $373 as of August 31, 2021 and May 31, 2021, respectively | 4,482 | 5,409 |
Prepaid expenses and other current assets | 3,325 | 3,604 |
Total current assets | 47,117 | 55,567 |
Non-current assets: | ||
Property, plant and equipment, net | 7,610 | 7,049 |
Intangible assets, net | 2,181 | 2,430 |
Goodwill, net | 43,862 | 43,935 |
Deferred tax assets | 13,391 | 13,636 |
Other non-current assets | 8,763 | 8,490 |
Total non-current assets | 75,807 | 75,540 |
Total assets | 122,924 | 131,107 |
Current liabilities: | ||
Notes payable, current | 6,748 | 8,250 |
Accounts payable | 749 | 745 |
Accrued compensation and related benefits | 1,470 | 2,017 |
Deferred revenues | 10,011 | 8,775 |
Other current liabilities | 4,093 | 4,377 |
Total current liabilities | 23,071 | 24,164 |
Non-current liabilities: | ||
Notes payable and other borrowings, non-current | 75,970 | 75,995 |
Income taxes payable | 12,315 | 12,345 |
Deferred tax liabilities | 7,648 | 7,864 |
Other non-current liabilities | 5,050 | 4,787 |
Total non-current liabilities | 100,983 | 100,991 |
Commitments and contingencies | 0 | 0 |
Oracle Corporation stockholders’ (deficit) equity: | ||
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: 2,743 shares and 2,814 shares as of August 31, 2021 and May 31, 2021, respectively | 25,534 | 26,533 |
Accumulated deficit | (25,679) | (20,120) |
Accumulated other comprehensive loss | (1,396) | (1,175) |
Total Oracle Corporation stockholders’ (deficit) equity | (1,541) | 5,238 |
Noncontrolling interests | 411 | 714 |
Total stockholders’ (deficit) equity | (1,130) | 5,952 |
Total liabilities and stockholders’ (deficit) equity | $ 122,924 | $ 131,107 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS PARENTHETICAL - USD ($) $ in Millions | Aug. 31, 2021 | May 31, 2021 |
Statement Of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 402 | $ 373 |
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 | 2,743,000,000 | 2,814,000,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | ||
Aug. 31, 2021 | Aug. 31, 2020 | ||
Revenues: | |||
Cloud services and license support | $ 7,371 | $ 6,947 | |
Cloud license and on-premise license | 813 | 886 | |
Hardware | 763 | 814 | |
Services | 781 | 720 | |
Total revenues | 9,728 | 9,367 | |
Operating expenses: | |||
Cloud services and license support | [1] | 1,214 | 1,011 |
Hardware | [1] | 245 | 246 |
Services | 644 | 623 | |
Sales and marketing | [1] | 1,854 | 1,854 |
Research and development | 1,684 | 1,589 | |
General and administrative | 298 | 295 | |
Amortization of intangible assets | 303 | 345 | |
Acquisition related and other | 21 | 19 | |
Restructuring | 38 | 174 | |
Total operating expenses | 6,301 | 6,156 | |
Operating income | 3,427 | 3,211 | |
Interest expense | (705) | (614) | |
Non-operating expenses, net | (41) | (2) | |
Income before provision for income taxes | 2,681 | 2,595 | |
Provision for income taxes | 224 | 344 | |
Net income | $ 2,457 | $ 2,251 | |
Earnings per share: | |||
Basic | $ 0.89 | $ 0.74 | |
Diluted | $ 0.86 | $ 0.72 | |
Weighted average common shares outstanding: | |||
Basic | 2,769 | 3,041 | |
Diluted | 2,861 | 3,107 | |
[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 | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net income | $ 2,457 | $ 2,251 |
Other comprehensive (loss) income, net of tax: | ||
Net foreign currency translation (losses) gains | (223) | 325 |
Net unrealized gains on defined benefit plans | 2 | 46 |
Net unrealized gains on marketable securities | 0 | 3 |
Net unrealized gains on cash flow hedges | 0 | 5 |
Total other comprehensive (loss) income, net | (221) | 379 |
Comprehensive income | $ 2,236 | $ 2,630 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY - USD ($) $ in Millions | Total | Common Stock and Additional Paid in Capital | Accumulated Deficit | Other Stockholders’ (Deficit) Equity, Net |
Balance, beginning of period at May. 31, 2020 | $ 26,486 | $ (12,696) | $ (1,073) | |
Other comprehensive (loss) income, net | $ 379 | 379 | ||
Common stock issued | 567 | |||
Stock-based compensation | 428 | |||
Repurchases of common stock | (5,000) | (765) | (4,235) | |
Cash dividends declared | (730) | |||
Net income | 2,251 | |||
Other, net | (478) | 0 | 6 | |
Balance, end of period at Aug. 31, 2020 | $ 10,140 | 26,238 | (15,410) | (688) |
Cash dividends declared per common share | $ 0.24 | |||
Balance, beginning of period at May. 31, 2021 | $ 5,952 | 26,533 | (20,120) | (461) |
Other comprehensive (loss) income, net | (221) | (221) | ||
Common stock issued | 148 | |||
Stock-based compensation | 545 | |||
Repurchases of common stock | (8,000) | (872) | (7,128) | |
Cash dividends declared | (887) | |||
Net income | 2,457 | |||
Other, net | (820) | (1) | (303) | |
Balance, end of period at Aug. 31, 2021 | $ (1,130) | $ 25,534 | $ (25,679) | $ (985) |
Cash dividends declared per common share | $ 0.32 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Cash flows from operating activities: | ||
Net income | $ 2,457 | $ 2,251 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 454 | 356 |
Amortization of intangible assets | 303 | 345 |
Deferred income taxes | (15) | 173 |
Stock-based compensation | 545 | 428 |
Other, net | (27) | 78 |
Changes in operating assets and liabilities, net of effects from acquisitions: | ||
Decrease in trade receivables, net | 852 | 1,077 |
Decrease in prepaid expenses and other assets | 270 | 380 |
Decrease in accounts payable and other liabilities | (713) | (294) |
Decrease in income taxes payable | (221) | (586) |
Increase in deferred revenues | 1,486 | 1,745 |
Net cash provided by operating activities | 5,391 | 5,953 |
Cash flows from investing activities: | ||
Purchases of marketable securities and other investments | (7,671) | (10,678) |
Proceeds from sales and maturities of marketable securities and other investments | 8,002 | 1,459 |
Acquisitions, net of cash acquired | (50) | 0 |
Capital expenditures | (1,062) | (436) |
Net cash used for investing activities | (781) | (9,655) |
Cash flows from financing activities: | ||
Payments for repurchases of common stock | (7,995) | (4,945) |
Proceeds from issuances of common stock | 148 | 567 |
Shares repurchased for tax withholdings upon vesting of restricted stock-based awards | (820) | (478) |
Payments of dividends to stockholders | (887) | (730) |
Repayments of borrowings | (1,500) | (1,000) |
Other, net | (414) | 93 |
Net cash used for financing activities | (11,468) | (6,493) |
Effect of exchange rate changes on cash and cash equivalents | (181) | 232 |
Net decrease in cash and cash equivalents | (7,039) | (9,963) |
Cash and cash equivalents at beginning of period | 30,098 | 37,239 |
Cash and cash equivalents at end of period | 23,059 | 27,276 |
Non-cash financing activities: | ||
Change in unsettled repurchases of common stock | $ 5 | $ 55 |
BASIS OF PRESENTATION, RECENT A
BASIS OF PRESENTATION, RECENT ACCOUNTING PRONOUNCEMENTS AND OTHER | 3 Months Ended |
Aug. 31, 2021 | |
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, 2021. 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, 2022. During the first quarter of fiscal 2022, we adopted Accounting Standards Update (ASU) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (ASU 2019-12) Cash, Cash Equivalents and Restricted Cash Restricted cash that was included within cash and cash equivalents as presented within our condensed consolidated balance sheets as of August 31, 2021 and May 31, 2021 and our condensed consolidated statements of cash flows for the three months ended August 31, 2021 and 2020 was nominal. Remaining Performance Obligations from Contracts with Customers Trade receivables, net of allowance for doubtful accounts, and deferred revenues are reported net of related uncollected deferred revenues in our condensed consolidated balance sheets as of August 31, 2021 and May 31, 2021. The revenues recognized during the three months ended August 31, 2021 and 2020, respectively, that were included in the opening deferred revenues balances as of May 31, 2021 and 2020, respectively, were approximately $3.7 billion and $3.4 billion, respectively. Revenues recognized from performance obligations satisfied in prior periods and impairment losses recognized on our receivables were immaterial in each of the three months ended August 31, 2021 and 2020. 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, 2021, were $38.7 billion as of August 31, 2021, approximately 60% of which we expect to recognize as revenues over the next twelve months, 29% 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 $656 million and $677 million for the three months ended August 31, 2021 and 2020, respectively. Acquisition Related and Other Expenses Acquisition related and other expenses primarily consist of personnel related costs for transitional and certain other employees, certain business combination adjustments including adjustments after the measurement period has ended, and certain other operating items, net. Three Months Ended August 31, (in millions) 2021 2020 Transitional and other employee related costs $ 2 $ 2 Business combination adjustments, net 3 1 Other, net 16 16 Total acquisition related and other expenses $ 21 $ 19 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) and net other income and expenses, including net realized gains and losses related to all of our investments, net unrealized gains and losses related to the small portion of our investment portfolio related to our deferred compensation plan, net unrealized gains and losses related to equity securities and non-service net periodic pension income and losses. Three Months Ended August 31, (in millions) 2021 2020 Interest income $ 20 $ 31 Foreign currency losses, net (35 ) (50 ) Noncontrolling interests in income (47 ) (38 ) Other, net 21 55 Total non-operating expenses, net $ (41 ) $ (2 ) Recent Accounting Pronouncements Financial Instruments In March 2020, the Financial Accounting Standards Board (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 | 3 Months Ended |
Aug. 31, 2021 | |
Business Combinations [Abstract] | |
ACQUISITIONS | 2. ACQUISITIONS Fiscal 2022 and 2021 Acquisitions During the first quarter of fiscal 2022 and full year fiscal 2021, we acquired certain companies and purchased certain technology and development assets primarily to expand our products and services offerings |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Aug. 31, 2021 | |
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): August 31, 2021 May 31, 2021 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 $ 5,269 $ — $ 5,269 $ 12,263 $ — $ 12,263 Corporate debt securities and other 2,204 9,450 11,654 1,250 8,220 9,470 Commercial paper debt securities — 9,510 9,510 — 11,712 11,712 Derivative financial instruments — 35 35 — 73 73 Total assets $ 7,473 $ 18,995 $ 26,468 $ 13,513 $ 20,005 $ 33,518 We classify our marketable securities as available-for-sale debt securities at the time of purchase and reevaluate such classification as of each balance sheet date. Our marketable securities investments consist of money market funds, Tier 1 commercial paper debt securities, corporate debt securities and certain other securities. Marketable securities as presented per our condensed consolidated balance sheets included securities with original maturities at the time of purchase greater than three months and the remainder of the securities were included in cash and cash equivalents. As of August 31, 2021 and May 31, 2021, substantially all of our marketable 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 $82.7 billion and $84.2 billion of senior notes and the related fair value hedges that we had outstanding as of August 31, 2021 and May 31, 2021, respectively, the estimated fair values of the senior notes and the related fair value hedges using Level 2 inputs at August 31, 2021 and May 31, 2021 were $90.2 billion and $89.6 billion, respectively. |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 3 Months Ended |
Aug. 31, 2021 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | 4. INTANGIBLE ASSETS AND GOODWILL The changes in intangible assets for fiscal 2022 and the net book value of intangible assets as of August 31, 2021 and May 31, 2021 were as follows: Intangible Assets, Gross Accumulated Amortization Intangible Assets, Net Weighted Average Useful Life (2) (Dollars in millions) May 31, 2021 Additions & Adjustments, net (1) August 31, 2021 May 31, 2021 Expense August 31, 2021 May 31, 2021 August 31, 2021 Developed technology $ 4,237 $ 59 $ 4,296 $ (3,621 ) $ (127 ) $ (3,748 ) $ 616 $ 548 3 Cloud services and license support agreements and related relationships 5,497 (5 ) 5,492 (3,834 ) (155 ) (3,989 ) 1,663 1,503 N.A. Other 1,269 — 1,269 (1,118 ) (21 ) (1,139 ) 151 130 N.A. Total intangible assets, net $ 11,003 $ 54 $ 11,057 $ (8,573 ) $ (303 ) $ (8,876 ) $ 2,430 $ 2,181 (1) Amounts also include 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 2022. As of August 31, 2021, estimated future amortization expenses related to intangible assets were as follows (in millions): Remainder of fiscal 2022 $ 834 Fiscal 2023 716 Fiscal 2024 473 Fiscal 2025 124 Fiscal 2026 24 Fiscal 2027 6 Thereafter 4 Total intangible assets, net $ 2,181 The changes in the carrying amounts of goodwill, net, which is generally not deductible for tax purposes, for our operating segments for the three months ended August 31, 2021 were as follows: (in millions) Cloud and License Hardware Services Total Goodwill, net Balances as of May 31, 2021 $ 39,786 $ 2,367 $ 1,782 $ 43,935 Goodwill adjustments, net (1) 186 — (259 ) (73 ) Balances as of August 31, 2021 $ 39,972 $ 2,367 $ 1,523 $ 43,862 (1) Amounts include any changes in goodwill balances for the period presented that resulted from foreign currency translations and the realignment of an operating segment component. |
RESTRUCTURING ACTIVITIES
RESTRUCTURING ACTIVITIES | 3 Months Ended |
Aug. 31, 2021 | |
Restructuring And Related Activities [Abstract] | |
RESTRUCTURING ACTIVITIES | 5. RESTRUCTURING ACTIVITIES Fiscal 2022 Oracle Restructuring Plan During the first quarter of 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). The total estimated restructuring costs associated with the 2022 Restructuring Plan are up to $353 million and will be recorded to the restructuring expense line item within our condensed consolidated statements of operations as they are incurred. We recorded $55 million of restructuring expenses in connection with the 2022 Restructuring Plan in the first three months of fiscal 2022 and we expect to incur the majority of the estimated remaining $298 million through the end of fiscal 2023. Any changes to the estimates of executing the 2022 Restructuring Plan will be reflected in our future results of operations. Summary of All Plans Three Months Ended August 31, 2021 Accrued August 31, 2021 (2) Total Costs Accrued to Date Total Expected Program Costs (in millions) Accrued May 31, 2021 (2) Initial Costs (3) Adj. to Cost (4) Cash Payments Others (5) 2022 Restructuring Plan (1) Cloud and license $ — $ 37 $ — $ (13 ) $ — $ 24 $ 37 $ 247 Hardware — 3 — (2 ) — 1 3 26 Services — 4 — (1 ) — 3 4 37 Other (6) — 11 — (2 ) — 9 11 43 Total 2022 Restructuring Plan $ — $ 55 $ — $ (18 ) $ — $ 37 $ 55 $ 353 Total other restructuring plans (7) $ 225 $ — $ (17 ) $ (50 ) $ (6 ) $ 152 Total restructuring plans $ 225 $ 55 $ (17 ) $ (68 ) $ (6 ) $ 189 (1) Restructuring costs recorded for individual line items primarily related to employee severance costs. (2) As of August 31, 2021 and May 31, 2021, 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 current 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 adjustments. ( 6 ) Represents employee related severance costs for functions that are not included within our operating segments and certain other restructuring costs. ( 7 ) 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 | 3 Months Ended |
Aug. 31, 2021 | |
Deferred Revenue Disclosure [Abstract] | |
DEFERRED REVENUES | 6. DEFERRED REVENUES Deferred revenues consisted of the following: (in millions) August 31, 2021 May 31, 2021 Cloud services and license support $ 9,033 $ 7,728 Hardware 599 618 Services 318 399 Cloud license and on-premise license 61 30 Deferred revenues, current 10,011 8,775 Deferred revenues, non-current (in other non-current liabilities) 773 679 Total deferred revenues $ 10,784 $ 9,454 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 over the 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) EQUITY
STOCKHOLDERS' (DEFICIT) EQUITY | 3 Months Ended |
Aug. 31, 2021 | |
Stockholders Equity Note [Abstract] | |
STOCKHOLDERS' (DEFICIT) EQUITY | 7 . STOCKHOLDERS’ (DEFICIT) EQUITY Common Stock Repurchases Our Board of Directors has approved a program for us to repurchase shares of our common stock. As of August 31, 2021, approximately $7.6 billion remained available for stock repurchases pursuant to our stock repurchase program. We repurchased 94.0 million shares for $8.0 billion during the three months ended August 31, 2021 (including 0.8 million shares for $71 million that were repurchased but not settled) and 89.8 million shares for $5.0 billion during the three months ended August 31, 2020 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 September 2021, our Board of Directors declared a quarterly cash dividend of $0.32 per share of our outstanding common stock. The dividend is payable on October 26, 2021 to stockholders of record as of the close of business on October 12, 2021. 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 2022 Stock‑Based Awards Activity and Compensation Expense During the first quarter of fiscal 2022, we issued 47 million restricted stock-based units (RSUs), substantially all of which were issued as a part of our annual stock-based award process and are subject to service-based vesting restrictions. These fiscal 2022 stock-based award issuances were partially offset by stock-based award forfeitures and cancellations of 2 million shares during the first quarter of fiscal 2022. The RSUs that were granted during the three months ended August 31, 2021 have vesting restrictions, valuations and contractual lives of a similar nature to those described in Note 13 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2021 . Further, during the first quarter of fiscal 2022, the Compensation Committee of our Board of Directors approved an amendment to the terms of the performance-based stock options (PSOs) granted on July 20, 2017 to our Chief Executive Officer and Chief Technology Officer. The amendment extends the term of the performance period for each of the six tranches of the PSOs that require the attainment of both a performance metric and a market capitalization metric by three additional fiscal years from May 31, 2022 to May 31, 2025. A seventh PSO tranche that was based upon a market-based metric was achieved and accordingly the tranche vested in the first quarter of fiscal 2022 without any amendment. If any of the remaining operational and market capitalization performance goals are achieved before May 31, 2025 additional tranches may vest. Upon amendment, we estimated the revised fair values of the six unvested tranches of the PSOs using a Monte Carlo simulation approach. We will recognize incremental stock-based compensation expense if any of the remaining unvested tranches becomes probable of achievement over the longer of the (a) estimated implicit service period for performance-metric achievement, or (b) derived service period for market-based metric achievement. We have preliminarily estimated service periods for those tranches that have been deemed probable of achievement to be approximately three to four years. Stock-based compensation expense is included in the following operating expense line items in our condensed consolidated statements of operations: Three Months Ended August 31, (in millions) 2021 2020 Cloud services and license support $ 40 $ 30 Hardware 3 3 Services 14 12 Sales and marketing 95 71 Research and development 344 276 General and administrative 49 36 Total stock-based compensation $ 545 $ 428 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Aug. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 8 . INCOME TAXES Our effective tax rates for each of the periods presented are the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. Our 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 8.4% and 13.3% for the three months ended August 31, 2021 and 2020, respectively. Our net deferred tax assets were $5.7 billion and $5.8 billion as of August 31, 2021 and May 31, 2021, 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 2020. Our U.S. federal income tax returns have been examined for all years prior to fiscal 2010 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 returns affecting our unrecognized tax benefits. 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, 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 | 3 Months Ended |
Aug. 31, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 9 . 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. Our services business provides services to customers and partners to help maximize the performance of their investments in Oracle applications and infrastructure technologies. We do not track our assets for each business. Consequently, it is not practical to show assets by operating segment. The following table presents summary results for each of our three businesses: Three Months Ended August 31, (in millions) 2021 2020 Cloud and license: Revenues ( 1) $ 8,184 $ 7,834 Cloud services and license support expenses 1,153 958 Sales and marketing expenses 1,626 1,633 Margin ( 2) $ 5,405 $ 5,243 Hardware: Revenues $ 763 $ 814 Hardware products and support expenses 238 239 Sales and marketing expenses 89 98 Margin ( 2) $ 436 $ 477 Services: Revenues $ 781 $ 720 Services expenses 609 585 Margin ( 2) $ 172 $ 135 Totals: Revenues ( 1) $ 9,728 $ 9,368 Expenses 3,715 3,513 Margin ( 2) $ 6,013 $ 5,855 (1) Cloud and license revenues presented for management reporting included revenues related to cloud and license obligations that would have otherwise been recorded by the acquired businesses as independent entities but were not recognized in our condensed consolidated statements of operations for the periods presented due to business combination accounting requirements. The table below provides a reconciliation of our total operating segment revenues to our total revenues as reported in our condensed consolidated statements of operations. (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. The following table reconciles total operating segment revenues to total revenues as well as total operating segment margin to income before provision for income taxes: Three Months Ended August 31, (in millions) 2021 2020 Total revenues for operating segments $ 9,728 $ 9,368 Cloud and license revenues ( 1) — (1 ) Total revenues $ 9,728 $ 9,367 Total margin for operating segments $ 6,013 $ 5,855 Cloud and license revenues ( 1) — (1 ) Research and development (1,684 ) (1,589 ) General and administrative (298 ) (295 ) Amortization of intangible assets (303 ) (345 ) Acquisition related and other (21 ) (19 ) Restructuring (38 ) (174 ) Stock-based compensation for operating segments (152 ) (116 ) Expense allocations and other, net (90 ) (105 ) Interest expense (705 ) (614 ) Non-operating expenses, net (41 ) (2 ) Income before provision for income taxes $ 2,681 $ 2,595 (1) Cloud and license revenues presented 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 total of which is reconciled to revenues from our reportable segments as per the preceding tables of this footnote. The following table is a summary of our total revenues by geographic region. The relative proportion of our total revenues between each geographic region as presented in the table below was materially consistent across each of our operating segments’ revenues for the periods presented. Three Months Ended August 31, (in millions) 2021 2020 Americas $ 5,321 $ 5,068 EMEA ( 1) 2,784 2,738 Asia Pacific 1,623 1,561 Total revenues $ 9,728 $ 9,367 (1) Comprised of Europe, the Middle East and Africa The Three Months Ended August 31, (in millions) 2021 2020 Applications cloud services and license support $ 3,041 $ 2,816 Infrastructure cloud services and license support 4,330 4,131 Total cloud services and license support revenues $ 7,371 $ 6,947 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Aug. 31, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 1 0 . EARNINGS PER SHARE Basic earnings per share is computed by dividing net income for the period by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income for the period by the weighted-average number of common shares outstanding during the period, plus the dilutive effect of outstanding restricted stock-based awards, stock options, and shares issuable under the employee stock purchase plan as applicable pursuant to the treasury stock method. The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended August 31, (in millions, except per share data) 2021 2020 Net income $ 2,457 $ 2,251 Weighted average common shares outstanding 2,769 3,041 Dilutive effect of employee stock plans 92 66 Dilutive weighted average common shares outstanding 2,861 3,107 Basic earnings per share $ 0.89 $ 0.74 Diluted earnings per share $ 0.86 $ 0.72 Shares subject to anti-dilutive restricted stock-based awards and stock options excluded from calculation (1) 30 36 (1) Substantially all of these weighted shares are related to contingently issuable shares related to PSO arrangements that could be dilutive in the future. |
LEGAL PROCEEDINGS
LEGAL PROCEEDINGS | 3 Months Ended |
Aug. 31, 2021 | |
Legal Proceedings [Abstract] | |
LEGAL PROCEEDINGS | 1 1 . LEGAL PROCEEDINGS Hewlett-Packard Company Litigation On June 15, 2011, Hewlett-Packard Company, now Hewlett Packard Enterprise Company (HP), filed a complaint in the California Superior Court, County of Santa Clara against Oracle Corporation alleging numerous causes of action including breach of contract, breach of the covenant of good faith and fair dealing, defamation, intentional interference with prospective economic advantage, and violation of the California Unfair Business Practices Act. The complaint alleged that when Oracle announced on March 22 and 23, 2011 that it would no longer develop future versions of its software to run on HP’s Itanium-based servers, it breached a settlement agreement signed on September 20, 2010 (the HP Settlement Agreement), resolving litigation between HP and one of Oracle’s former CEOs who had previously acted as HP’s chief executive officer and chairman of HP’s board of directors. HP sought a judicial declaration of the parties’ rights and obligations under the HP Settlement Agreement and other equitable and monetary relief. Oracle answered the complaint and filed cross-claims. After a bench trial on the meaning of the HP Settlement Agreement, the court found that the HP Settlement Agreement required Oracle to continue to develop certain of its software products for use on HP’s Itanium-based servers at no cost to HP. The case proceeded to a jury trial in May 2016. On June 30, 2016, the jury returned a verdict in favor of HP on its claims for breach of contract and breach of the implied covenant of good faith and fair dealing and against Oracle on its cross-claims. The jury awarded HP $3.0 billion in damages. Under the court’s rulings, HP is entitled to post-judgment interest, but not pre-judgment interest, on this award. After the trial court denied Oracle’s motion for a new trial, Oracle filed a notice of appeal on January 17, 2017. On February 2, 2017, HP filed a notice of appeal of the trial court’s denial of pre-judgment interest. Oral argument was held on May 27, 2021. On June 14, 2021, the Court of Appeal affirmed both the judgment against Oracle noted above, and the denial of pre-judgment interest. Oracle has posted a mandated surety bond with the trial court for the amounts owing. On June 29, 2021, Oracle filed a Petition for Rehearing with the Court of Appeal, which was denied on July 8, 2021. On July 26, 2021, Oracle filed a Petition for Review with the California Supreme Court, and briefing on that Petition is now complete. No amounts have been paid or recorded to our results of operations. If the Court of Appeal’s judgment is ultimately affirmed, we would be liable for the amount of the jury award that is described above plus post-judgment interest. We continue to believe that we have meritorious defenses against HP’s claims and intend to vigorously defend against them. We cannot currently estimate a reasonably possible range of loss for this action due to the complexities and uncertainty surrounding this process and the nature of the claims. Litigation is inherently unpredictable, and the outcome of the process related to this action is uncertain. It is possible that the resolution of this action could have a material impact on our future cash flows and results of operations. 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 (the 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, and a hearing on this motion was held on February 16, 2021. 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. The parties are conducting discovery. Trial is scheduled to commence on July 18, 2022. 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. Trial is scheduled to commence on November 6, 2023. We believe that we have meritorious defenses against this action, and we will continue to vigorously defend it. 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 Oracle continues to evaluate these claims, we do not believe this litigation will have a material impact on our financial position or results of operations. Derivative Litigation Concerning Oracle’s Board Composition and Hiring Practices On July 2 and 10, 2020, two alleged stockholders filed derivative lawsuits in the U.S. District Court for the Northern District of California, purportedly on Oracle’s behalf, and thereafter, filed a consolidated complaint on August 21, 2020. On July 30, 2020, a third alleged stockholder filed a derivative lawsuit in the same court. On October 16, 2020, defendants moved to consolidate all these actions, and the court granted this motion on November 30, 2020. On December 7, 2020, plaintiffs filed a consolidated derivative complaint against all members of our Board of Directors, and Oracle as a nominal defendant, seeking declaratory and injunctive relief, monetary damages, interest, corporate governance changes, disgorgement, restitution, punitive damages, and an award of attorneys’ fees, expert fees, and costs. Plaintiffs allege that: (a) defendants breached their fiduciary duties by permitting Oracle to violate anti-discrimination laws and Oracle’s own policies, failing to ensure sufficient diversity on the board, failing to ensure an independent board chairman, rehiring Ernst & Young LLP as Oracle’s auditors, and by breaching the HP Settlement Agreement (discussed above); (b) defendants made false and misleading statements in Oracle’s proxy statements; (c) defendants received unjust compensation and were unjustly enriched; (d) defendants aided and abetted this conduct; and (e) our Chief Technology Officer and our Chief Executive Officer are liable for abuse of control. On January 6, 2021, defendants moved to dismiss the complaint. On May 24, 2021, the court granted defendants’ motion. Regarding the claims concerning Oracle’s proxy statements, the court granted plaintiffs leave to file an amended complaint within 30 days. Plaintiffs did not file an amended complaint within 30 days. On September 3, 2021, the court entered judgment for defendants on these claims. Regarding the remaining claims, the court granted plaintiffs leave to re-file those claims in Delaware Chancery Court. 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. 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) | 3 Months Ended |
Aug. 31, 2021 | |
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, 2021. 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, 2022. During the first quarter of fiscal 2022, we adopted Accounting Standards Update (ASU) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (ASU 2019-12) |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Restricted cash that was included within cash and cash equivalents as presented within our condensed consolidated balance sheets as of August 31, 2021 and May 31, 2021 and our condensed consolidated statements of cash flows for the three months ended August 31, 2021 and 2020 was nominal. |
Remaining Performance Obligations from Contracts with Customers | Remaining Performance Obligations from Contracts with Customers Trade receivables, net of allowance for doubtful accounts, and deferred revenues are reported net of related uncollected deferred revenues in our condensed consolidated balance sheets as of August 31, 2021 and May 31, 2021. The revenues recognized during the three months ended August 31, 2021 and 2020, respectively, that were included in the opening deferred revenues balances as of May 31, 2021 and 2020, respectively, were approximately $3.7 billion and $3.4 billion, respectively. Revenues recognized from performance obligations satisfied in prior periods and impairment losses recognized on our receivables were immaterial in each of the three months ended August 31, 2021 and 2020. 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, 2021, were $38.7 billion as of August 31, 2021, approximately 60% of which we expect to recognize as revenues over the next twelve months, 29% 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 $656 million and $677 million for the three months ended August 31, 2021 and 2020, respectively. |
Acquisition Related and Other Expenses | Acquisition Related and Other Expenses Acquisition related and other expenses primarily consist of personnel related costs for transitional and certain other employees, certain business combination adjustments including adjustments after the measurement period has ended, and certain other operating items, net. Three Months Ended August 31, (in millions) 2021 2020 Transitional and other employee related costs $ 2 $ 2 Business combination adjustments, net 3 1 Other, net 16 16 Total acquisition related and other expenses $ 21 $ 19 |
Non-Operating Expenses, 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) and net other income and expenses, including net realized gains and losses related to all of our investments, net unrealized gains and losses related to the small portion of our investment portfolio related to our deferred compensation plan, net unrealized gains and losses related to equity securities and non-service net periodic pension income and losses. Three Months Ended August 31, (in millions) 2021 2020 Interest income $ 20 $ 31 Foreign currency losses, net (35 ) (50 ) Noncontrolling interests in income (47 ) (38 ) Other, net 21 55 Total non-operating expenses, net $ (41 ) $ (2 ) |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Financial Instruments In March 2020, the Financial Accounting Standards Board (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) | 3 Months Ended |
Aug. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Acquisition Related and Other Expenses | Three Months Ended August 31, (in millions) 2021 2020 Transitional and other employee related costs $ 2 $ 2 Business combination adjustments, net 3 1 Other, net 16 16 Total acquisition related and other expenses $ 21 $ 19 |
Non-Operating Expenses, net | Three Months Ended August 31, (in millions) 2021 2020 Interest income $ 20 $ 31 Foreign currency losses, net (35 ) (50 ) Noncontrolling interests in income (47 ) (38 ) Other, net 21 55 Total non-operating expenses, net $ (41 ) $ (2 ) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Aug. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | August 31, 2021 May 31, 2021 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 $ 5,269 $ — $ 5,269 $ 12,263 $ — $ 12,263 Corporate debt securities and other 2,204 9,450 11,654 1,250 8,220 9,470 Commercial paper debt securities — 9,510 9,510 — 11,712 11,712 Derivative financial instruments — 35 35 — 73 73 Total assets $ 7,473 $ 18,995 $ 26,468 $ 13,513 $ 20,005 $ 33,518 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 3 Months Ended |
Aug. 31, 2021 | |
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, 2021 Additions & Adjustments, net (1) August 31, 2021 May 31, 2021 Expense August 31, 2021 May 31, 2021 August 31, 2021 Developed technology $ 4,237 $ 59 $ 4,296 $ (3,621 ) $ (127 ) $ (3,748 ) $ 616 $ 548 3 Cloud services and license support agreements and related relationships 5,497 (5 ) 5,492 (3,834 ) (155 ) (3,989 ) 1,663 1,503 N.A. Other 1,269 — 1,269 (1,118 ) (21 ) (1,139 ) 151 130 N.A. Total intangible assets, net $ 11,003 $ 54 $ 11,057 $ (8,573 ) $ (303 ) $ (8,876 ) $ 2,430 $ 2,181 (1) Amounts also include any changes in intangible asset balances for the periods presented that resulted from foreign currency translations. |
Estimated Future Amortization Expenses Related to Intangible Assets | Remainder of fiscal 2022 $ 834 Fiscal 2023 716 Fiscal 2024 473 Fiscal 2025 124 Fiscal 2026 24 Fiscal 2027 6 Thereafter 4 Total intangible assets, net $ 2,181 |
Goodwill | (in millions) Cloud and License Hardware Services Total Goodwill, net Balances as of May 31, 2021 $ 39,786 $ 2,367 $ 1,782 $ 43,935 Goodwill adjustments, net (1) 186 — (259 ) (73 ) Balances as of August 31, 2021 $ 39,972 $ 2,367 $ 1,523 $ 43,862 (1) Amounts include any changes in goodwill balances for the period presented that resulted from foreign currency translations and the realignment of an operating segment component. |
RESTRUCTURING ACTIVITIES (Table
RESTRUCTURING ACTIVITIES (Tables) | 3 Months Ended |
Aug. 31, 2021 | |
Restructuring And Related Activities [Abstract] | |
Summary of All Plans | Three Months Ended August 31, 2021 Accrued August 31, 2021 (2) Total Costs Accrued to Date Total Expected Program Costs (in millions) Accrued May 31, 2021 (2) Initial Costs (3) Adj. to Cost (4) Cash Payments Others (5) 2022 Restructuring Plan (1) Cloud and license $ — $ 37 $ — $ (13 ) $ — $ 24 $ 37 $ 247 Hardware — 3 — (2 ) — 1 3 26 Services — 4 — (1 ) — 3 4 37 Other (6) — 11 — (2 ) — 9 11 43 Total 2022 Restructuring Plan $ — $ 55 $ — $ (18 ) $ — $ 37 $ 55 $ 353 Total other restructuring plans (7) $ 225 $ — $ (17 ) $ (50 ) $ (6 ) $ 152 Total restructuring plans $ 225 $ 55 $ (17 ) $ (68 ) $ (6 ) $ 189 (1) Restructuring costs recorded for individual line items primarily related to employee severance costs. (2) As of August 31, 2021 and May 31, 2021, 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 current 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 adjustments. ( 6 ) Represents employee related severance costs for functions that are not included within our operating segments and certain other restructuring costs. ( 7 ) 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) | 3 Months Ended |
Aug. 31, 2021 | |
Deferred Revenue Disclosure [Abstract] | |
Deferred Revenues | (in millions) August 31, 2021 May 31, 2021 Cloud services and license support $ 9,033 $ 7,728 Hardware 599 618 Services 318 399 Cloud license and on-premise license 61 30 Deferred revenues, current 10,011 8,775 Deferred revenues, non-current (in other non-current liabilities) 773 679 Total deferred revenues $ 10,784 $ 9,454 |
STOCKHOLDERS' (DEFICIT) EQUITY
STOCKHOLDERS' (DEFICIT) EQUITY (Tables) | 3 Months Ended |
Aug. 31, 2021 | |
Stockholders Equity Note [Abstract] | |
Stock-Based Compensation Expense | Three Months Ended August 31, (in millions) 2021 2020 Cloud services and license support $ 40 $ 30 Hardware 3 3 Services 14 12 Sales and marketing 95 71 Research and development 344 276 General and administrative 49 36 Total stock-based compensation $ 545 $ 428 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Aug. 31, 2021 | |
Segment Reporting [Abstract] | |
Summary of Businesses Results | Three Months Ended August 31, (in millions) 2021 2020 Cloud and license: Revenues ( 1) $ 8,184 $ 7,834 Cloud services and license support expenses 1,153 958 Sales and marketing expenses 1,626 1,633 Margin ( 2) $ 5,405 $ 5,243 Hardware: Revenues $ 763 $ 814 Hardware products and support expenses 238 239 Sales and marketing expenses 89 98 Margin ( 2) $ 436 $ 477 Services: Revenues $ 781 $ 720 Services expenses 609 585 Margin ( 2) $ 172 $ 135 Totals: Revenues ( 1) $ 9,728 $ 9,368 Expenses 3,715 3,513 Margin ( 2) $ 6,013 $ 5,855 (1) Cloud and license revenues presented for management reporting included revenues related to cloud and license obligations that would have otherwise been recorded by the acquired businesses as independent entities but were not recognized in our condensed consolidated statements of operations for the periods presented due to business combination accounting requirements. The table below provides a reconciliation of our total operating segment revenues to our total revenues as reported in our condensed consolidated statements of operations. (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. |
Reconciliation of Total Operating Segment Revenues to Total Revenues | Three Months Ended August 31, (in millions) 2021 2020 Total revenues for operating segments $ 9,728 $ 9,368 Cloud and license revenues ( 1) — (1 ) Total revenues $ 9,728 $ 9,367 |
Reconciliation of Total Operating Segment Margin to Income before Provision for Income Taxes | Total margin for operating segments $ 6,013 $ 5,855 Cloud and license revenues ( 1) — (1 ) Research and development (1,684 ) (1,589 ) General and administrative (298 ) (295 ) Amortization of intangible assets (303 ) (345 ) Acquisition related and other (21 ) (19 ) Restructuring (38 ) (174 ) Stock-based compensation for operating segments (152 ) (116 ) Expense allocations and other, net (90 ) (105 ) Interest expense (705 ) (614 ) Non-operating expenses, net (41 ) (2 ) Income before provision for income taxes $ 2,681 $ 2,595 (1) Cloud and license revenues presented |
Disaggregation of Revenue by Geography and Ecosystem | Three Months Ended August 31, (in millions) 2021 2020 Americas $ 5,321 $ 5,068 EMEA ( 1) 2,784 2,738 Asia Pacific 1,623 1,561 Total revenues $ 9,728 $ 9,367 (1) Comprised of Europe, the Middle East and Africa Three Months Ended August 31, (in millions) 2021 2020 Applications cloud services and license support $ 3,041 $ 2,816 Infrastructure cloud services and license support 4,330 4,131 Total cloud services and license support revenues $ 7,371 $ 6,947 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Aug. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Three Months Ended August 31, (in millions, except per share data) 2021 2020 Net income $ 2,457 $ 2,251 Weighted average common shares outstanding 2,769 3,041 Dilutive effect of employee stock plans 92 66 Dilutive weighted average common shares outstanding 2,861 3,107 Basic earnings per share $ 0.89 $ 0.74 Diluted earnings per share $ 0.86 $ 0.72 Shares subject to anti-dilutive restricted stock-based awards and stock options excluded from calculation (1) 30 36 (1) Substantially all of these weighted shares are related to contingently issuable shares related to PSO arrangements that could be dilutive in the future. |
BASIS OF PRESENTATION, RECENT_4
BASIS OF PRESENTATION, RECENT ACCOUNTING PRONOUNCEMENTS AND OTHER Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Contract with Customer, Asset and Liability [Abstract] | ||
Revenues recognized included in opening deferred revenues balances | $ 3,700 | $ 3,400 |
Revenue, Performance Obligation [Abstract] | ||
Remaining performance obligation, amount | 38,700 | |
Sales of Financing Receivables [Abstract] | ||
Sales of financing receivables | $ 656 | $ 677 |
BASIS OF PRESENTATION, RECENT_5
BASIS OF PRESENTATION, RECENT ACCOUNTING PRONOUNCEMENTS AND OTHER Narrative (Details1) | Aug. 31, 2021 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-09-01 | |
Revenue, Performance Obligation [Abstract] | |
Remaining performance obligation, percentage | 60.00% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-09-01 | |
Revenue, Performance Obligation [Abstract] | |
Remaining performance obligation, percentage | 29.00% |
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 | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Acquisition Related and Other Expenses [Abstract] | ||
Transitional and other employee related costs | $ 2 | $ 2 |
Business combination adjustments, net | 3 | 1 |
Other, net | 16 | 16 |
Total acquisition related and other expenses | 21 | 19 |
Non-Operating Expenses, net [Abstract] | ||
Interest income | 20 | 31 |
Foreign currency losses, net | (35) | (50) |
Noncontrolling interests in income | (47) | (38) |
Other, net | 21 | 55 |
Total non-operating expenses, net | $ (41) | $ (2) |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Millions | Aug. 31, 2021 | May 31, 2021 |
Assets [Abstract] | ||
Derivative financial instruments | $ 35 | $ 73 |
Total assets | 26,468 | 33,518 |
Commercial Paper Debt Securities [Member] | ||
Assets [Abstract] | ||
Investments and cash and cash equivalents | 9,510 | 11,712 |
Money Market Funds [Member] | ||
Assets [Abstract] | ||
Investments and cash and cash equivalents | 5,269 | 12,263 |
Corporate Debt Securities and Other [Member] | ||
Assets [Abstract] | ||
Investments and cash and cash equivalents | 11,654 | 9,470 |
Fair Value Measurements Using Input Types Level 1 [Member] | ||
Assets [Abstract] | ||
Derivative financial instruments | 0 | 0 |
Total assets | 7,473 | 13,513 |
Fair Value Measurements Using Input Types Level 1 [Member] | Commercial Paper Debt Securities [Member] | ||
Assets [Abstract] | ||
Investments and cash and cash equivalents | 0 | 0 |
Fair Value Measurements Using Input Types Level 1 [Member] | Money Market Funds [Member] | ||
Assets [Abstract] | ||
Investments and cash and cash equivalents | 5,269 | 12,263 |
Fair Value Measurements Using Input Types Level 1 [Member] | Corporate Debt Securities and Other [Member] | ||
Assets [Abstract] | ||
Investments and cash and cash equivalents | 2,204 | 1,250 |
Fair Value Measurements Using Input Types Level 2 [Member] | ||
Assets [Abstract] | ||
Derivative financial instruments | 35 | 73 |
Total assets | 18,995 | 20,005 |
Fair Value Measurements Using Input Types Level 2 [Member] | Commercial Paper Debt Securities [Member] | ||
Assets [Abstract] | ||
Investments and cash and cash equivalents | 9,510 | 11,712 |
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] | Corporate Debt Securities and Other [Member] | ||
Assets [Abstract] | ||
Investments and cash and cash equivalents | $ 9,450 | $ 8,220 |
FAIR VALUE MEASUREMENTS Narrati
FAIR VALUE MEASUREMENTS Narrative (Details) - Senior notes [Member] - USD ($) $ in Billions | Aug. 31, 2021 | May 31, 2021 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total debt, carrying value | $ 82.7 | $ 84.2 |
Fair Value Measurements Using Input Types Level 2 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total debt, fair value | $ 90.2 | $ 89.6 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Aug. 31, 2021 | Aug. 31, 2020 | May 31, 2021 | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Intangible Assets, Gross | $ 11,057 | $ 11,003 | ||
Additions & Adjustments, net | [1] | 54 | ||
Accumulated Amortization, | (8,876) | (8,573) | ||
Expense | (303) | $ (345) | ||
Intangible Assets, Net | 2,181 | 2,430 | ||
Developed technology [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Intangible Assets, Gross | 4,296 | 4,237 | ||
Additions & Adjustments, net | [1] | 59 | ||
Accumulated Amortization, | (3,748) | (3,621) | ||
Expense | (127) | |||
Intangible Assets, Net | $ 548 | 616 | ||
Weighted Average Useful Life | [2] | 3 years | ||
Cloud services and license support agreements and related relationships [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Intangible Assets, Gross | $ 5,492 | 5,497 | ||
Additions & Adjustments, net | [1] | (5) | ||
Accumulated Amortization, | (3,989) | (3,834) | ||
Expense | (155) | |||
Intangible Assets, Net | $ 1,503 | 1,663 | ||
Weighted Average Useful Life | [2] | 0 years | ||
Other [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Intangible Assets, Gross | $ 1,269 | 1,269 | ||
Additions & Adjustments, net | [1] | 0 | ||
Accumulated Amortization, | (1,139) | (1,118) | ||
Expense | (21) | |||
Intangible Assets, Net | $ 130 | $ 151 | ||
Weighted Average Useful Life | [2] | 0 years | ||
[1] | Amounts also include 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 2022. |
INTANGIBLE ASSETS AMORTIZATION
INTANGIBLE ASSETS AMORTIZATION (Details) - USD ($) $ in Millions | Aug. 31, 2021 | May 31, 2021 |
Finite lived intangible assets future amortization expense [Abstract] | ||
Remainder of fiscal 2022 | $ 834 | |
Fiscal 2023 | 716 | |
Fiscal 2024 | 473 | |
Fiscal 2025 | 124 | |
Fiscal 2026 | 24 | |
Fiscal 2027 | 6 | |
Thereafter | 4 | |
Intangible Assets, Net | $ 2,181 | $ 2,430 |
GOODWILL (Details)
GOODWILL (Details) $ in Millions | 3 Months Ended | |
Aug. 31, 2021USD ($) | ||
Goodwill [Line Items] | ||
Balances at period start | $ 43,935 | |
Goodwill adjustments, net | (73) | [1] |
Balances at period end | 43,862 | |
Cloud and License [Member] | ||
Goodwill [Line Items] | ||
Balances at period start | 39,786 | |
Goodwill adjustments, net | 186 | [1] |
Balances at period end | 39,972 | |
Hardware [Member] | ||
Goodwill [Line Items] | ||
Balances at period start | 2,367 | |
Goodwill adjustments, net | 0 | [1] |
Balances at period end | 2,367 | |
Services [Member] | ||
Goodwill [Line Items] | ||
Balances at period start | 1,782 | |
Goodwill adjustments, net | (259) | [1] |
Balances at period end | $ 1,523 | |
[1] | Amounts include any changes in goodwill balances for the period presented that resulted from foreign currency translations and the realignment of an operating segment component. |
RESTRUCTURING ACTIVITIES Narrat
RESTRUCTURING ACTIVITIES Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Aug. 31, 2021 | Aug. 31, 2020 | ||
Restructuring reserve [Line Items] | |||
Restructuring expenses | $ 38 | $ 174 | |
Fiscal 2022 Oracle Restructuring [Member] | |||
Restructuring reserve [Line Items] | |||
Total estimated restructuring costs | [1] | 353 | |
Restructuring expenses | 55 | ||
Remaining expenses to incur | $ 298 | ||
Expected completion date | May 31, 2024 | ||
Fiscal 2022 Oracle Restructuring [Member] | Maximum [Member] | |||
Restructuring reserve [Line Items] | |||
Total estimated restructuring costs | $ 353 | ||
[1] | Restructuring costs recorded for individual line items primarily related to employee severance costs. |
RESTRUCTURING ACTIVITIES (Detai
RESTRUCTURING ACTIVITIES (Details) $ in Millions | 3 Months Ended | |
Aug. 31, 2021USD ($) | [2] | |
Restructuring reserve [Line Items] | ||
Accrued at period start | $ 225 | [1] |
Initial Costs | 55 | [3] |
Adjustments to Cost | (17) | [4] |
Cash Payments | (68) | |
Others | (6) | [5] |
Accrued at period end | 189 | [1] |
Fiscal 2022 Oracle Restructuring [Member] | ||
Restructuring reserve [Line Items] | ||
Accrued at period start | 0 | [1] |
Initial Costs | 55 | [3] |
Adjustments to Cost | 0 | [4] |
Cash Payments | (18) | |
Others | 0 | [5] |
Accrued at period end | 37 | [1] |
Total Costs Accrued to Date | 55 | |
Total Expected Program Costs | 353 | |
Fiscal 2022 Oracle Restructuring [Member] | Other [Member] | ||
Restructuring reserve [Line Items] | ||
Accrued at period start | 0 | [1],[6] |
Initial Costs | 11 | [3],[6] |
Adjustments to Cost | 0 | [4],[6] |
Cash Payments | (2) | [6] |
Others | 0 | [5],[6] |
Accrued at period end | 9 | [1],[6] |
Total Costs Accrued to Date | 11 | [6] |
Total Expected Program Costs | 43 | [6] |
Fiscal 2022 Oracle Restructuring [Member] | Cloud and License [Member] | Operating Segments [Member] | ||
Restructuring reserve [Line Items] | ||
Accrued at period start | 0 | [1] |
Initial Costs | 37 | [3] |
Adjustments to Cost | 0 | [4] |
Cash Payments | (13) | |
Others | 0 | [5] |
Accrued at period end | 24 | [1] |
Total Costs Accrued to Date | 37 | |
Total Expected Program Costs | 247 | |
Fiscal 2022 Oracle Restructuring [Member] | Hardware [Member] | Operating Segments [Member] | ||
Restructuring reserve [Line Items] | ||
Accrued at period start | 0 | [1] |
Initial Costs | 3 | [3] |
Adjustments to Cost | 0 | [4] |
Cash Payments | (2) | |
Others | 0 | [5] |
Accrued at period end | 1 | [1] |
Total Costs Accrued to Date | 3 | |
Total Expected Program Costs | 26 | |
Fiscal 2022 Oracle Restructuring [Member] | Services [Member] | Operating Segments [Member] | ||
Restructuring reserve [Line Items] | ||
Accrued at period start | 0 | [1] |
Initial Costs | 4 | [3] |
Adjustments to Cost | 0 | [4] |
Cash Payments | (1) | |
Others | 0 | [5] |
Accrued at period end | 3 | [1] |
Total Costs Accrued to Date | 4 | |
Total Expected Program Costs | 37 | |
Other Restructuring Plans [Member] | ||
Restructuring reserve [Line Items] | ||
Accrued at period start | 225 | [1],[7] |
Initial Costs | 0 | [3],[7] |
Adjustments to Cost | (17) | [4],[7] |
Cash Payments | (50) | [7] |
Others | (6) | [5],[7] |
Accrued at period end | $ 152 | [1],[7] |
[1] | As of August 31, 2021 and May 31, 2021, substantially all restructuring liabilities have been recorded in other current liabilities within our condensed consolidated balance sheets. | |
[2] | Restructuring costs recorded for individual line items primarily related to employee severance costs. | |
[3] | Costs recorded for the respective restructuring plans during the current 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 adjustments. | |
[6] | Represents employee related severance costs for functions that are not included within our operating segments and certain other restructuring costs. | |
[7] | 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 | Aug. 31, 2021 | May 31, 2021 |
Deferred Revenues [Line Items] | ||
Deferred revenues, current | $ 10,011 | $ 8,775 |
Deferred revenues, non-current (in other non-current liabilities) | 773 | 679 |
Total deferred revenues | 10,784 | 9,454 |
Cloud services and license support [Member] | Cloud and License [Member] | ||
Deferred Revenues [Line Items] | ||
Deferred revenues, current | 9,033 | 7,728 |
Hardware [Member] | Hardware [Member] | ||
Deferred Revenues [Line Items] | ||
Deferred revenues, current | 599 | 618 |
Services [Member] | Services [Member] | ||
Deferred Revenues [Line Items] | ||
Deferred revenues, current | 318 | 399 |
Cloud license and on-premise license [Member] | Cloud and License [Member] | ||
Deferred Revenues [Line Items] | ||
Deferred revenues, current | $ 61 | $ 30 |
STOCKHOLDERS' (DEFICIT) EQUIT_2
STOCKHOLDERS' (DEFICIT) EQUITY Narrative (Details) $ / shares in Units, shares in Millions, $ in Millions | Sep. 13, 2021$ / shares | Aug. 31, 2021USD ($)Trancheshares | Aug. 31, 2020USD ($)shares |
Stock Repurchases [Abstract] | |||
Amount available for future repurchases | $ | $ 7,600 | ||
Repurchases of common stock (in shares) | 94 | 89.8 | |
Repurchased amount | $ | $ 8,000 | $ 5,000 | |
Repurchased shares that were not settled (in shares) | 0.8 | ||
Repurchased amount that was not settled | $ | $ 71 | ||
Stock-based compensation expense and valuations of stock awards [Abstract] | |||
Restricted stock-based units granted (in shares) | 47 | ||
Forfeitures and cancellations (in shares) | 2 | ||
Performance-based stock options [Member] | |||
Stock-based compensation expense and valuations of stock awards [Abstract] | |||
Number of vesting tranches require attainment of both a performance and a market condition | Tranche | 6 | ||
Number of tranches vests on attainment of market-based metric | Tranche | 7 | ||
Performance-based stock options [Member] | Minimum [Member] | |||
Stock-based compensation expense and valuations of stock awards [Abstract] | |||
Award service period for market-based metric | 3 years | ||
Performance-based stock options [Member] | Maximum [Member] | |||
Stock-based compensation expense and valuations of stock awards [Abstract] | |||
Award service period for market-based metric | 4 years | ||
Subsequent Event [Member] | |||
Dividends on Common Stock [Abstract] | |||
Dividends declared per share of outstanding common stock (in dollars per share) | $ / shares | $ 0.32 | ||
Dividend payable date | Oct. 26, 2021 | ||
Dividend record date | Oct. 12, 2021 |
STOCKHOLDERS' (DEFICIT) EQUIT_3
STOCKHOLDERS' (DEFICIT) EQUITY (Details) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Stock-based compensation expense and valuations of stock awards [Abstract] | ||
Total stock-based compensation | $ 545 | $ 428 |
Cloud services and license support [Member] | ||
Stock-based compensation expense and valuations of stock awards [Abstract] | ||
Total stock-based compensation | 40 | 30 |
Hardware [Member] | ||
Stock-based compensation expense and valuations of stock awards [Abstract] | ||
Total stock-based compensation | 3 | 3 |
Services [Member] | ||
Stock-based compensation expense and valuations of stock awards [Abstract] | ||
Total stock-based compensation | 14 | 12 |
Sales and marketing [Member] | ||
Stock-based compensation expense and valuations of stock awards [Abstract] | ||
Total stock-based compensation | 95 | 71 |
Research and development [Member] | ||
Stock-based compensation expense and valuations of stock awards [Abstract] | ||
Total stock-based compensation | 344 | 276 |
General and administrative [Member] | ||
Stock-based compensation expense and valuations of stock awards [Abstract] | ||
Total stock-based compensation | $ 49 | $ 36 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Billions | 3 Months Ended | ||
Aug. 31, 2021 | Aug. 31, 2020 | May 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Effective income tax rate | 8.40% | 13.30% | |
Deferred Tax Assets, Net [Abstract] | |||
Net deferred tax assets | $ 5.7 | $ 5.8 |
SEGMENT INFORMATION Narrative (
SEGMENT INFORMATION Narrative (Details) | 3 Months Ended |
Aug. 31, 2021BusinessSegment | |
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 | ||
Aug. 31, 2021 | Aug. 31, 2020 | ||
Segment reporting information [Line Items] | |||
Revenues | $ 9,728 | $ 9,367 | |
Cloud services and license support expenses | [1] | 1,214 | 1,011 |
Sales and marketing expenses | [1] | 1,854 | 1,854 |
Margin | 3,427 | 3,211 | |
Operating Segments [Member] | |||
Segment reporting information [Line Items] | |||
Revenues | [2] | 9,728 | 9,368 |
Expenses | 3,715 | 3,513 | |
Margin | [3] | 6,013 | 5,855 |
Operating Segments [Member] | Cloud and License [Member] | |||
Segment reporting information [Line Items] | |||
Revenues | [2] | 8,184 | 7,834 |
Cloud services and license support expenses | 1,153 | 958 | |
Sales and marketing expenses | 1,626 | 1,633 | |
Margin | [3] | 5,405 | 5,243 |
Operating Segments [Member] | Hardware [Member] | |||
Segment reporting information [Line Items] | |||
Revenues | 763 | 814 | |
Hardware products and support expenses | 238 | 239 | |
Sales and marketing expenses | 89 | 98 | |
Margin | [3] | 436 | 477 |
Operating Segments [Member] | Services [Member] | |||
Segment reporting information [Line Items] | |||
Revenues | 781 | 720 | |
Services expenses | 609 | 585 | |
Margin | [3] | $ 172 | $ 135 |
[1] | Exclusive of amortization of intangible assets, which is shown separately. | ||
[2] | Cloud and license revenues presented for management reporting included revenues related to cloud and license obligations that would have otherwise been recorded by the acquired businesses as independent entities but were not recognized in our condensed consolidated statements of operations for the periods presented due to business combination accounting requirements. The table below provides a reconciliation of our total operating segment revenues to our total revenues as reported in our condensed consolidated statements of operations. | ||
[3] | 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. |
SEGMENT INFORMATION RECONCILIAT
SEGMENT INFORMATION RECONCILIATION (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Aug. 31, 2021 | Aug. 31, 2020 | ||
Reconciliation of Operating Segment Revenues to Revenues [Abstract] | |||
Total revenues | $ 9,728 | $ 9,367 | |
Reconciliation of Total Operating Segment Margin to Income Before Provision for Income Taxes [Abstract] | |||
Total margin for operating segments | 3,427 | 3,211 | |
Total revenues | 9,728 | 9,367 | |
Research and development | (1,684) | (1,589) | |
General and administrative | (298) | (295) | |
Amortization of intangible assets | (303) | (345) | |
Acquisition related and other | (21) | (19) | |
Restructuring | (38) | (174) | |
Stock-based compensation for operating segments | (152) | (116) | |
Expense allocations and other, net | (90) | (105) | |
Interest expense | (705) | (614) | |
Non-operating expenses, net | (41) | (2) | |
Income before provision for income taxes | 2,681 | 2,595 | |
Operating Segments [Member] | |||
Reconciliation of Operating Segment Revenues to Revenues [Abstract] | |||
Total revenues | [1] | 9,728 | 9,368 |
Reconciliation of Total Operating Segment Margin to Income Before Provision for Income Taxes [Abstract] | |||
Total margin for operating segments | [2] | 6,013 | 5,855 |
Total revenues | [1] | 9,728 | 9,368 |
Cloud and license revenues [Member] | |||
Reconciliation of Operating Segment Revenues to Revenues [Abstract] | |||
Total revenues | [3] | 0 | (1) |
Reconciliation of Total Operating Segment Margin to Income Before Provision for Income Taxes [Abstract] | |||
Total revenues | [3] | $ 0 | $ (1) |
[1] | Cloud and license revenues presented for management reporting included revenues related to cloud and license obligations that would have otherwise been recorded by the acquired businesses as independent entities but were not recognized in our condensed consolidated statements of operations for the periods presented due to business combination accounting requirements. The table below provides a reconciliation of our total operating segment revenues to our total revenues as reported in our condensed consolidated statements of operations. | ||
[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. | ||
[3] | Cloud and license revenues presented |
SUMMARY OF TOTAL REVENUES BY GE
SUMMARY OF TOTAL REVENUES BY GEOGRAPHIC REGION (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Aug. 31, 2021 | Aug. 31, 2020 | ||
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ 9,728 | $ 9,367 | |
Americas [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 5,321 | 5,068 | |
EMEA [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | [1] | 2,784 | 2,738 |
Asia Pacific [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ 1,623 | $ 1,561 | |
[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 | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 9,728 | $ 9,367 |
Applications Cloud Services and License Support [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 3,041 | 2,816 |
Infrastructure Cloud Services and License Support [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 4,330 | 4,131 |
Cloud services and license support [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 7,371 | $ 6,947 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | ||
Aug. 31, 2021 | Aug. 31, 2020 | ||
Earnings Per Share [Abstract] | |||
Net income | $ 2,457 | $ 2,251 | |
Weighted average common shares outstanding | 2,769 | 3,041 | |
Dilutive effect of employee stock plans | 92 | 66 | |
Dilutive weighted average common shares outstanding | 2,861 | 3,107 | |
Basic earnings per share | $ 0.89 | $ 0.74 | |
Diluted earnings per share | $ 0.86 | $ 0.72 | |
Shares subject to anti-dilutive restricted stock-based awards and stock options excluded from calculation | [1] | 30 | 36 |
[1] | Substantially all of these weighted shares are related to contingently issuable shares related to PSO arrangements that could be dilutive in the future. |
LEGAL PROCEEDINGS (Details)
LEGAL PROCEEDINGS (Details) - Hewlett-Packard Litigation [Member] - USD ($) | Jun. 30, 2016 | Aug. 31, 2021 |
Legal Proceedings [Line Items] | ||
Damages awarded, value | $ 3,000,000,000 | |
Damages paid, value | $ 0 |