Common-Size Income Statement

Oracle Corp., common-size consolidated income statement

12 months ended:	May 31, 2026	May 31, 2025	May 31, 2024	May 31, 2023	May 31, 2022	May 31, 2021
Cloud	50.46%	42.69%	37.34%	0.00%	0.00%	0.00%
Software	36.43%	43.07%	46.62%	0.00%	0.00%	0.00%
Cloud services and license support	0.00%	0.00%	0.00%	70.68%	71.10%	70.90%
Cloud license and on-premise license	0.00%	0.00%	0.00%	11.57%	13.85%	13.34%
Hardware	4.58%	5.12%	5.79%	6.55%	7.50%	8.30%
Services	8.53%	9.12%	10.25%	11.20%	7.55%	7.46%
Revenues	100.00%	100.00%	100.00%	100.00%	100.00%	100.00%
Cloud and software (previously: Cloud services and license support)	-26.12%	-20.16%	-17.80%	-15.54%	-12.28%	-10.75%
Hardware	-1.29%	-1.36%	-1.68%	-2.08%	-2.29%	-2.40%
Services	-6.76%	-7.97%	-9.11%	-9.53%	-6.34%	-6.25%
Cost of revenues	-34.18%	-29.49%	-28.59%	-27.15%	-20.92%	-19.41%
Gross profit	65.82%	70.51%	71.41%	72.85%	79.08%	80.59%
Sales and marketing	-12.37%	-15.07%	-15.62%	-17.68%	-18.96%	-18.98%
Research and development	-15.25%	-17.18%	-16.83%	-17.26%	-17.01%	-16.12%
General and administrative	-2.40%	-2.79%	-2.92%	-3.16%	-3.10%	-3.10%
Amortization of intangible assets	-2.48%	-4.02%	-5.68%	-7.17%	-2.71%	-3.41%
Restructuring	-2.64%	-0.52%	-0.76%	-0.98%	-0.45%	-1.06%
Other, net	-0.09%	-0.13%	-0.59%	-0.38%	-11.11%	-0.34%
Restructuring and other	-2.73%	-0.65%	-1.36%	-1.36%	-11.56%	-1.41%
Operating income	30.59%	30.80%	28.99%	26.21%	25.74%	37.58%
Interest expense	-6.83%	-6.23%	-6.64%	-7.02%	-6.49%	-6.17%
Interest income	1.16%	1.01%	0.85%	0.57%	0.22%	0.25%
Foreign currency losses, net	-0.19%	-0.26%	-0.43%	-0.50%	-0.47%	-0.28%
Gains (losses) from marketable and non-marketable investments, net	4.17%	-0.48%	-0.57%	-0.65%	-0.35%	0.65%
Other income (expenses), net	0.46%	0.16%	0.32%	-0.01%	-0.20%	0.52%
Non-operating income (expenses), net, excluding noncontrolling interests in income	5.60%	0.43%	0.17%	-0.59%	-0.80%	1.14%
Income before income taxes and noncontrolling interests in income	29.36%	24.99%	22.52%	18.60%	18.46%	32.56%
(Provision for) benefit from income taxes	-3.66%	-2.99%	-2.41%	-1.25%	-2.20%	1.85%
Net income before noncontrolling interests in income	25.70%	22.00%	20.11%	17.35%	16.26%	34.40%
Noncontrolling interests in income	-0.33%	-0.32%	-0.35%	-0.33%	-0.43%	-0.44%
Net income	25.37%	21.68%	19.76%	17.02%	15.83%	33.96%
Preferred stock dividends	-0.15%	0.00%	0.00%	0.00%	0.00%	0.00%
Net income available to common shareholders	25.21%	21.68%	19.76%	17.02%	15.83%	33.96%

Based on: 10-K (reporting date: 2026-05-31), 10-K (reporting date: 2025-05-31), 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31).

A strategic shift in revenue composition is evident, characterized by a transition from traditional software licenses toward cloud-based services. This transition has resulted in significant fluctuations in gross margins and a subsequent restructuring of the operating expense profile, ultimately leading to a recovery in net profit margins over the analyzed period.

Revenue Mix Evolution: A clear pivot toward cloud services is observed, with Cloud revenue increasing from 37.34% of total revenues in 2024 to 50.46% by 2026. Conversely, Software revenue has declined from 46.62% in 2024 to 36.43% in 2026. Hardware revenues have maintained a consistent downward trajectory, falling from 8.30% in 2021 to 4.58% in 2026, indicating a diminishing reliance on physical infrastructure sales.
Cost Structure and Gross Margin Compression: Gross profit margins have experienced a steady decline, moving from 80.59% in 2021 to 65.82% in 2026. This compression is primarily driven by the rising cost of revenues, which increased from 19.41% to 34.18% over the same period. Specifically, the costs associated with cloud and software escalated from 10.75% in 2021 to 26.12% in 2026, reflecting the higher operational expenditures required to maintain and scale cloud infrastructure.
Operating Expense Trends: Efficiency gains are noted in Sales and Marketing expenses, which decreased from 18.98% of revenues in 2021 to 12.37% in 2026. Research and development spending has remained relatively stable, fluctuating between 15.25% and 17.26%, suggesting a consistent commitment to innovation despite changing revenue streams. General and administrative expenses have also trended slightly downward, reaching 2.40% by 2026.
Profitability and Bottom-Line Performance: Operating income margins saw a sharp contraction between 2021 (37.58%) and 2022 (25.74%), but have since stabilized and improved to 30.59% by 2026. Net income has followed a similar recovery path, rising from a low of 15.83% in 2022 to 25.37% in 2026. This recovery was bolstered in the final year by a significant positive contribution from gains on marketable and non-marketable investments, which reached 4.17% of revenues in 2026.

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Oracle Corp. (NYSE:ORCL)

Common-Size Income Statement