Oracle Corp. (NYSE:ORCL)

The financial data reveals several notable trends over the period from May 31, 2020, to May 31, 2025.

Net operating profit after taxes (NOPAT)

NOPAT experienced significant fluctuations throughout the analyzed years. Starting at $10,144 million in 2020, it rose to a peak of $14,348 million in 2021, then sharply declined to $7,492 million in 2022. From 2022 onwards, a recovery trend is evident, with NOPAT increasing steadily to reach $14,158 million by 2025, nearly matching the 2021 peak. This pattern indicates variability in operating efficiency and profitability before stabilizing and growing again in recent years.

Cost of capital

The cost of capital showed a consistent upward trend over the five-year span. Beginning at 11.69% in 2020, it increased gradually each year to reach 14.30% by 2025. The steady rise in the cost of capital reflects increasing financial costs or perceived risk, which may impact investment and valuation assessments.

Invested capital

Invested capital demonstrated a decline from $87,978 million in 2020 to a low point of $77,262 million in 2022. However, following 2022, there was a marked increase in invested capital, growing to $115,423 million by 2025. The shift from reduction to expansion in invested capital could indicate a strategic change involving increased investment in assets or growth initiatives in the later years.

Economic profit

Economic profit varied considerably, with a positive value of $4,462 million recorded in 2021, contrasting with negative economic profit values in most other years. Specifically, economic profit was slightly negative in 2020 and sharply negative from 2022 through 2025. Despite improving NOPAT figures after 2022, economic profit remains negative, suggesting that returns are not sufficiently exceeding the cost of capital. This indicates value destruction or insufficient value creation relative to invested capital costs during those years.

In summary, the company faced profitability and investment challenges around 2022, followed by recovery in operating profit and substantial reinvestment activity. However, the consistent increase in the cost of capital combined with persistent negative economic profit after 2021 points to ongoing challenges in generating returns above the cost of capital, raising considerations for strategic financial management and operational efficiency going forward.

Net Income Trend

The net income showed a rising trend from 2020 to 2021, increasing from 10,135 million USD to 13,746 million USD. However, there was a significant decline in 2022, with net income dropping to 6,717 million USD. Following this decline, the net income gradually increased over the next three years, reaching 8,503 million USD in 2023, 10,467 million USD in 2024, and 12,443 million USD in 2025. Overall, despite the dip in 2022, the net income demonstrates recovery and growth toward the latter years.

Net Operating Profit After Taxes (NOPAT) Trend

NNOPAT also increased from 10,144 million USD in 2020 to a peak of 14,348 million USD in 2021. It similarly experienced a large decrease in 2022 to 7,492 million USD. From 2023 onward, NOPAT consistently rose, reaching 10,160 million USD in 2023, 11,940 million USD in 2024, and culminating at 14,158 million USD in 2025. This suggests a strong rebound in operational profitability and effective tax management.

Comparative Insights

The patterns for both net income and NOPAT are aligned, with a peak in 2021, a notable downturn in 2022, and a steady recovery through the following years. NOPAT values are consistently close to net income values, indicating relatively stable operating efficiency and tax impact. The data imply that the company managed to improve operating results over time despite the intermediate disturbance in 2022.

Provision for (benefit from) income taxes

The provision for income taxes displays a fluctuating trend over the periods observed. It started at a positive amount of 1928 million USD in May 31, 2020, then dropped sharply to a negative value of -747 million USD in May 31, 2021, suggesting a tax benefit for that year. This was followed by a return to positive values with 932 million USD in 2022 and steady increases in subsequent years, reaching 1717 million USD in May 31, 2025. The data indicates variability but an overall upward trend after the negative dip.

Cash operating taxes

Cash operating taxes present a generally increasing trajectory from May 31, 2020, through May 31, 2025. Starting at 3101 million USD in 2020, the amount decreased in 2021 to 2197 million USD, but then steadily increased each year thereafter, reaching a peak of 4137 million USD in 2024, with a slight decrease to 4134 million USD in 2025. This suggests progressively higher cash tax outflows during the later years, indicative of either higher taxable income or changes in tax payments.

Total reported debt & leases

The total reported debt and leases exhibited an overall increasing trend from 2020 through 2025. Starting at $73,695 million in 2020, the amount rose to $87,027 million in 2021, followed by a decline to $79,517 million in 2022. Thereafter, a consistent upward movement occurred, reaching $95,330 million in 2023, slightly declining to $94,414 million in 2024, and finally increasing substantially to $108,952 million in 2025. This pattern indicates fluctuating debt exposures with a notable increase in the last reported period.

Total Oracle Corporation stockholders’ equity (deficit)

Stockholders’ equity showed significant volatility and a considerable turnaround over the years. Initially, equity stood at $12,074 million in 2020, sharply declining to $5,238 million in 2021 and turning into a deficit of -$6,220 million by 2022. Subsequently, equity recovered to a positive $1,073 million in 2023, then improved substantially to $8,704 million in 2024, and reached $20,451 million in 2025. This indicates a transition from financial distress or negative equity toward a stronger equity position, reflecting improved capital structure and retained earnings or other comprehensive income gains.

Invested capital

Invested capital decreased from $87,978 million in 2020 to $77,262 million in 2022, indicating reductions or restructuring in capital allocation during this period. However, from 2022 onward, invested capital rose markedly to $98,251 million in 2023, continuing to $101,930 million in 2024, and further to $115,423 million in 2025. This evolution suggests renewed investment activities and potentially greater operational scale or asset acquisition in the latter years. The confluence of rising invested capital and improving equity alongside increasing debt points to an expansion phase with leveraged financing.

Economic Profit

The economic profit experienced significant volatility over the reported periods. Initially, there was a substantial loss of 139 million US dollars, followed by a notable increase to a positive 4462 million US dollars in 2021. However, this improvement was not sustained, as the economic profit declined sharply to negative values in subsequent years, reaching -3066 million US dollars in 2023. Although there was a slight recovery in 2024, the value remained negative and further deteriorated slightly in 2025.

Invested Capital

The invested capital displayed an overall growth trend despite some fluctuations. There was a decrease from 87978 million US dollars in 2020 to 77262 million US dollars in 2022. From 2022 onward, invested capital increased consistently, rising to 115423 million US dollars by 2025, indicating ongoing capital investments or asset base expansion during the latter years.

Economic Spread Ratio

The economic spread ratio mirrored the pattern seen in economic profit, showing an initial negative value of -0.16% in 2020, followed by a significant positive increase to 5.46% in 2021. Subsequently, it dropped back into negative territory, with values declining to -3.12% in 2023. Though there was a marginal improvement thereafter, the ratio remained negative through 2024 and 2025, ending at -2.04%. This suggests challenges in generating returns above the cost of capital over most years.

The financial data reveals key trends in the company’s economic profit, adjusted revenues, and economic profit margin over a six-year period.

Adjusted Revenues

Adjusted revenues show a consistent upward trend throughout the entire period. Starting at 38,624 million USD in May 2020, revenues steadily increased each year, reaching 57,586 million USD in May 2025. This reflects robust growth in the company’s top-line performance, with notable acceleration in revenue increase from May 2022 to May 2023.

Economic Profit

The economic profit figures demonstrate considerable volatility and remain negative in most years. Economic profit was negative in May 2020, recording a loss of 139 million USD, before shifting to a substantial positive profit of 4,462 million USD in May 2021. However, this gain was not sustained as economic profit returned to negative territory in subsequent years, with losses deepening particularly in May 2023 (-3,066 million USD) and remaining significantly negative through May 2025 (-2,352 million USD). The alternating pattern suggests challenges in translating revenue growth into consistent economic profitability.

Economic Profit Margin

The economic profit margin aligns with the economic profit trend, fluctuating notably over the examined period. It was negative at -0.36% in May 2020, improved sharply to a positive peak of 10.79% in May 2021, and then returned to negative values in subsequent years, ranging between -6.04% and -4.05%. From May 2023 onwards, the margin stabilizes slightly but remains negative, indicating ongoing difficulty in achieving economic profitability relative to revenues despite the growth in adjusted revenues.

In summary, while the company has demonstrated strong and consistent revenue growth over the six-year period, economic profitability has been volatile and primarily negative, indicating that higher revenues have not yet translated into sustained economic profit. This suggests potential issues related to cost management, capital efficiency, or other factors affecting overall economic returns.