Oracle Corp. (NYSE:ORCL)

The analysis of the financial data over the six-year period reveals distinct trends in the composition and valuation of intangible assets and goodwill.

Developed Technology

The value of developed technology assets shows a general declining trend from 2020 to 2025. It decreases from $4,471 million in 2020 to $3,966 million in 2022, followed by a slight recovery to $4,300 million in 2023. Subsequently, it falls again to $4,143 million by 2025. This indicates a gradual amortization or revaluation impact on these assets with moderate fluctuations.

Cloud Services and License Support Agreements and Related Relationships

This category remains relatively stable between 2020 and 2022, with a modest decline from $5,589 million to $5,260 million. However, there is a notable surge in 2023 to $9,456 million, followed by a decline in 2024 and 2025 to $8,460 million and $7,148 million respectively. This suggests significant investment or reclassification in 2023, boosting asset values that taper off in the subsequent years.

Cloud License and On-Premise License Agreements and Related Relationships

Data for this category is not available until 2022. From 2022 onward, there is an initial rise from $356 million in 2022 to a peak of $2,688 million in 2023. A slight decline is observed subsequently, with values around $2,563 million and $2,522 million in 2024 and 2025 respectively, indicating an expansion phase followed by stabilization or slight divestiture.

Other Intangible Assets

The "Other" category exhibits a decline from $1,341 million in 2020 to $865 million in 2022, then unexpectedly surges to $3,582 million in 2023. This elevated level is somewhat maintained with a minor decrease to $3,533 million in 2024 and further decline to $2,827 million in 2025. The sharp increase and subsequent decrease may reflect reclassification of assets or acquisition-related intangible items.

Intangible Assets, Gross

The gross intangible assets follow a similar pattern: a decline from $11,401 million in 2020 to $10,447 million in 2022, followed by a sharp increase to $20,026 million in 2023. This elevated gross value decreases to $18,791 million in 2024 and further to $16,640 million in 2025, reflecting the combined effects of asset addition and amortization.

Accumulated Amortization

Accumulated amortization consistently increases over the period, moving from -$7,663 million in 2020 to -$12,053 million in 2025. The steady rise in amortization reflects ongoing expense recognition against intangible assets, which corresponds with the observed decreases in net intangible values.

Intangible Assets, Net

Net intangible assets diminish sharply from $3,738 million in 2020 to $1,440 million in 2022, but they jump significantly to $9,837 million in 2023 before declining to $4,587 million in 2025. This pattern suggests large asset additions or revaluations in 2023, followed by regular amortization and possible impairment effects in later years.

Goodwill

Goodwill remains relatively steady from 2020 to 2022, maintaining around $43,800 million. A significant increase occurs in 2023, raising goodwill to approximately $62,261 million, where it stabilizes through 2025. This jump likely reflects a major acquisition or business combination occurring in 2023, with stable valuations thereafter.

Total Intangible Assets and Goodwill

The combined value of intangible assets and goodwill shows a decline from $47,507 million in 2020 to $45,251 million in 2022, followed by a sharp increase to $72,098 million in 2023. After peak levels, the figure decreases to $66,794 million by 2025. The pattern reflects major asset additions or acquisitions in 2023 with subsequent amortization and stabilization in the later years.

Reported Total Assets

The reported total assets show fluctuations over the period. Beginning at $115,438 million in 2020, there is a notable increase to $131,107 million in 2021, followed by a decline to $109,297 million in 2022. Subsequently, the assets rise again, reaching $168,361 million by 2025. This pattern suggests some volatility in asset levels but a general upward trend toward the end of the period.

Adjusted Total Assets

The adjusted total assets, which presumably exclude goodwill effects, display a declining trend initially, decreasing from $71,669 million in 2020 to $65,486 million in 2022. However, from 2023 onward, there is a consistent increase, culminating in $106,154 million in 2025. While this represents a recovery, the adjusted assets remain significantly lower than the reported totals, indicating substantial goodwill recognition in the reported figures.

Reported Total Stockholders’ Equity

Reported stockholders' equity fluctuates markedly. It starts at $12,074 million in 2020, plunges to $5,238 million in 2021, and turns negative to -$6,220 million in 2022. Thereafter, it recovers to positive figures, reaching $20,451 million by 2025. This volatility suggests considerable changes in equity structure or valuation adjustments impacting shareholder equity.

Adjusted Total Stockholders’ Equity

The adjusted stockholders' equity consistently remains negative throughout the period, worsening from -$31,695 million in 2020 to -$61,188 million in 2023 before improving slightly to -$41,756 million by 2025. This persistent negativity in adjusted equity highlights the impact of adjustments, such as goodwill write-offs, and may indicate underlying challenges in shareholder value after excluding intangible assets.

Overall Insights

The disparity between reported and adjusted figures indicates that goodwill and other intangible assets form a substantial portion of the reported financial position. The increasing gap between reported and adjusted total assets suggests growing intangible assets or acquisitions with significant goodwill components. The persistent negative adjusted equity implies that when excluding such intangibles, the tangible net worth remains under pressure. The recovery in reported equity toward the end of the period, alongside rising reported assets, could reflect strategic initiatives or market conditions improving the company's financial standing.

The analysis of the financial data reveals several notable trends across the examined periods.

Total Asset Turnover

The reported total asset turnover ratio fluctuated between 0.31 and 0.39 over the years, indicating moderate variability with a peak observed in May 31, 2022. The adjusted total asset turnover, which excludes goodwill effects, consistently showed higher values than the reported ratios, ranging from 0.46 to 0.69, with a maximum in May 31, 2023. This suggests that when goodwill is adjusted, the efficiency of asset utilization appears stronger and more dynamic.

Financial Leverage

Reported financial leverage exhibited significant volatility. It increased dramatically to an extreme value of 125.24 in May 31, 2023, which is an outlier compared to other years that showed more moderate values between 8.23 and 25.03. This spike could indicate an unusual event or accounting adjustment affecting leverage in that particular year. Adjusted financial leverage data was unavailable, limiting further comparative insights.

Return on Equity (ROE)

The reported ROE showed extreme fluctuation and very high peaks, notably 262.43% in May 31, 2021 and an exceptional 792.45% in May 31, 2023, followed by a decline to 60.84% in the latest period. Such volatility suggests periods of elevated profitability or unusual financial occurrences impacting equity returns. Adjusted ROE data was not provided, precluding clearer assessment of equity performance excluding goodwill.

Return on Assets (ROA)

Reported ROA exhibited a downward trend from 10.48% in May 31, 2021 to roughly stable figures around 6.15%-7.42% in subsequent years, indicating a weakening asset profitability on a reported basis. However, adjusted ROA, excluding the impact of goodwill, consistently outperformed the reported metric, ranging from 10.26% to 15.77%. The adjusted ROA demonstrated relative stability and a slight upward trend after May 31, 2022, reflecting improved underlying asset profitability when goodwill distortions are removed.

In summary, the data shows that adjustments for goodwill lead to higher and more stable asset utilization and profitability metrics, suggesting substantial goodwill impact on reported figures. Reported financial leverage and ROE display abnormal volatility, indicating possible extraordinary items affecting these ratios. Asset efficiency and returns are generally stronger when excluding goodwill, underscoring the importance of adjustments in financial analysis to obtain clearer operational insights.

Total Assets

The reported total assets exhibit an overall upward trend from 115,438 million US dollars in May 2020 to 168,361 million US dollars in May 2025. There is a notable dip in May 2022 to 109,297 million, followed by a recovery and continued growth. Adjusted total assets follow a similar pattern, beginning at 71,669 million in May 2020, dropping significantly to 65,486 million in May 2022, before rising steadily to 106,154 million in May 2025.

Total Asset Turnover Ratios

Reported total asset turnover shows variability without a clear upward or downward trend. It decreases from 0.34 in May 2020 to 0.31 in May 2021, then rises to 0.39 in May 2022, and subsequently oscillates around 0.37-0.38 before dropping again to 0.34 in May 2025. Adjusted total asset turnover presents a higher and more volatile series of values, starting at 0.55 in May 2020, dropping to 0.46 in May 2021, then increasing significantly to 0.65 in May 2022, reaching a peak of 0.69 in May 2023, followed by a slight decline to 0.54 in May 2025.

Insights

The disparity between reported and adjusted total assets suggests significant goodwill or other intangible adjustments affecting the asset base. The more stable growth in reported assets compared to adjusted assets indicates these intangible assets may fluctuate more sharply. Total asset turnover ratios adjusted for goodwill are consistently higher, implying better asset utilization once intangible assets are excluded. The volatility in both turnover measures may reflect operational changes or varying effectiveness in asset use over the period. In summary, while the asset base grows substantially, the efficiency of asset use has fluctuated, with better performance reflected when adjusted for goodwill.

Reported Total Assets

The reported total assets show a general upward trend from 115,438 million USD in 2020 to 168,361 million USD in 2025, indicating growth with some fluctuations. Notably, there was a dip in 2022 to 109,297 million USD, followed by a recovery and consistent increases through 2025.

Adjusted Total Assets

Adjusted total assets also exhibit variability over the period. Starting at 71,669 million USD in 2020, the value increased to 87,172 million USD in 2021, before sharply decreasing to 65,486 million USD in 2022. From 2022 onwards, the adjusted assets increased steadily, reaching 106,154 million USD in 2025. Overall, the adjusted asset values remain consistently lower than the reported totals, reflecting the impact of goodwill adjustments.

Reported Oracle Corporation Stockholders’ Equity (Deficit)

The reported equity demonstrates significant volatility. It began at 12,074 million USD in 2020, declined sharply to 5,238 million USD in 2021, and further into negative territory at -6,220 million USD in 2022. This was followed by a modest recovery to 1,073 million USD in 2023, then substantial increases to 8,704 million USD in 2024 and 20,451 million USD in 2025, suggesting improvement in equity position after a tumultuous period.

Adjusted Oracle Corporation Stockholders’ Equity (Deficit)

The adjusted equity shows a consistently negative and worsening trend from -31,695 million USD in 2020 to -61,188 million USD in 2023, before improving to -41,756 million USD in 2025. This persistent deficit indicates a structural negative net asset position when goodwill is excluded, despite some recovery post-2023.

Reported Financial Leverage

The reported financial leverage ratio shows high volatility. It started at 9.56 in 2020, increased sharply to 25.03 in 2021, was missing for 2022, then surged dramatically to 125.24 in 2023, indicating extremely high leverage or possible data anomaly in that year. Subsequently, it dropped to 16.2 in 2024 and further to 8.23 in 2025, suggesting a reduction in financial leverage toward the end of the period.

Adjusted Financial Leverage

No data is available for adjusted financial leverage ratios throughout the period, limiting the analysis of leverage metrics excluding goodwill effects.

Total Stockholders’ Equity (Reported)

The reported total stockholders’ equity of the company experienced significant volatility across the periods analyzed. Starting at a positive level of 12,074 million USD in May 2020, equity sharply declined to 5,238 million USD in May 2021 and further plunged into a deficit of -6,220 million USD by May 2022. A recovery phase followed, with equity improving to 1,073 million USD in May 2023, and continuing to rise substantially to 8,704 million USD in May 2024 and reaching 20,451 million USD by May 2025. This pattern suggests a highly fluctuating equity base but an overall strong rebound after the 2022 deficit.

Total Stockholders’ Equity (Adjusted for Goodwill)

The adjusted total stockholders’ equity, which excludes goodwill, remained negative throughout the entire period and exhibited a worsening trend until May 2023. It started at -31,695 million USD in May 2020 and declined steadily to -61,188 million USD by May 2023. Subsequent periods see some improvement with the deficit reducing to -53,526 million USD in May 2024 and further to -41,756 million USD in May 2025. Despite this partial recovery, the consistently negative adjusted equity indicates considerable intangible asset impact and potential underlying financial leverage challenges.

Reported Return on Equity (ROE)

The reported ROE shows extreme fluctuations. Beginning at 83.94% in May 2020, it spikes dramatically to 262.43% in May 2021, with no data available for May 2022. The ROE then surges to an exceptionally high 792.45% in May 2023, followed by a marked decline to 120.26% in May 2024 and further down to 60.84% in May 2025. These variations reflect large changes in net income relative to equity, likely influenced by the volatile equity base. The exceptionally high values suggest a low equity denominator during deficit or recovery phases, skewing the ratio upward.

Adjusted Return on Equity (Adjusted ROE)

There are no available data points for adjusted ROE across the analyzed periods, preventing any trend analysis or comparative insights relative to the reported ROE.

Total Assets

Reported total assets exhibited a generally increasing trend from May 31, 2020 to May 31, 2025, starting at 115,438 million US dollars and reaching 168,361 million US dollars. A notable decline occurred in May 31, 2022, where assets dropped to 109,297 million US dollars before resuming an upward trajectory.

Adjusted total assets, which likely exclude goodwill, followed a similar but more volatile pattern. Values rose from 71,669 million US dollars in May 31, 2020 to a peak of 87,172 million US dollars in May 31, 2021, then sharply decreased to 65,486 million US dollars in May 31, 2022. Afterward, they increased steadily to 106,154 million US dollars by May 31, 2025.

Return on Assets (ROA)

Reported ROA demonstrated fluctuation through the period analyzed. It increased from 8.78% in May 31, 2020 to a high of 10.48% in May 31, 2021, then declined sharply to 6.15% in May 31, 2022. Subsequently, it stabilized and showed moderate improvement, reaching 7.39% in May 31, 2025.

Adjusted ROA values, based on adjusted total assets, remained consistently higher than reported ROA throughout the period. It rose from 14.14% in May 31, 2020 to 15.77% in May 31, 2021, followed by a decrease to 10.26% in May 31, 2022. Thereafter, adjusted ROA improved steadily, finishing at 11.72% in May 31, 2025.

Insights

The discrepancy between reported and adjusted total assets suggests a significant impact from goodwill on the balance sheet, influencing asset base and profitability measures. The sharp declines observed in 2022 for both asset measures and ROA may indicate a specific event or adjustment affecting financial performance and asset valuation.

Adjusted ROA consistently outperforms reported ROA, indicating that when goodwill is excluded, the company’s asset efficiency is higher than when goodwill is included. This difference underlines the importance of analyzing goodwill's influence when assessing return on assets.

The recovery and growth patterns post-2022 in both assets and ROA suggest effective management actions or improved operational performance after the downturn, although adjusted measures show stronger recovery rates relative to reported figures.