Stock Analysis on Net
Stock Analysis on Net

Oracle Corp. (NYSE:ORCL)

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Common-Size Income Statement

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Oracle Corp., common-size consolidated income statement

Microsoft Excel
12 months ended: May 31, 2026 May 31, 2025 May 31, 2024 May 31, 2023 May 31, 2022 May 31, 2021
Cloud
Software
Cloud services and license support
Cloud license and on-premise license
Hardware
Services
Revenues
Cloud and software (previously: Cloud services and license support)
Hardware
Services
Cost of revenues
Gross profit
Sales and marketing
Research and development
General and administrative
Amortization of intangible assets
Restructuring
Other, net
Restructuring and other
Operating income
Interest expense
Interest income
Foreign currency losses, net
Gains (losses) from marketable and non-marketable investments, net
Other income (expenses), net
Non-operating income (expenses), net, excluding noncontrolling interests in income
Income before income taxes and noncontrolling interests in income
(Provision for) benefit from income taxes
Net income before noncontrolling interests in income
Noncontrolling interests in income
Net income
Preferred stock dividends
Net income available to common shareholders

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.