Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Oracle Corp., profitability ratios
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).
The profitability profile exhibits a divergence between gross margin trends and bottom-line efficiency. While top-line profitability has experienced a steady and sustained decline, operating and net margins have demonstrated a recovery phase following a significant contraction in 2022.
- Gross Profit Margin
- A consistent downward trajectory is observed, with the margin decreasing from 80.59% in 2021 to a projected 65.82% by 2026. This persistent decline suggests an increase in the cost of sales relative to total revenue over the analyzed period.
- Operating and Net Profit Margins
- Both metrics experienced a sharp decline between 2021 and 2022, with the operating margin falling from 37.58% to 25.74% and the net profit margin dropping from 33.96% to 15.83%. However, a period of steady recovery followed; by 2026, the operating margin is projected to reach 30.59% and the net profit margin 25.37%, indicating improved operational leverage and expense management following the 2022 trough.
- Return on Equity (ROE)
- Extreme volatility is evident in the ROE, characterized by a substantial peak of 792.45% in 2023 before entering a significant downward trend toward 40.20% by 2026. Such fluctuations typically suggest substantial shifts in the equity base or modifications to the capital structure rather than purely operational performance.
- Return on Assets (ROA)
- A contraction occurred between 2021 (10.48%) and 2022 (6.15%), after which the ratio remained relatively stable, fluctuating within a narrow range between 6.53% and 7.42% through 2026. This indicates a stabilized level of asset productivity following the initial decline.
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Return on Sales
Return on Investment
Gross Profit Margin
Oracle Corp., gross profit margin calculation, comparison to benchmarks
| May 31, 2026 | May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Gross profit | 44,336) | 40,472) | 37,818) | 36,390) | 33,563) | 32,624) | |
| Revenues | 67,357) | 57,399) | 52,961) | 49,954) | 42,440) | 40,479) | |
| Profitability Ratio | |||||||
| Gross profit margin1 | 65.82% | 70.51% | 71.41% | 72.85% | 79.08% | 80.59% | |
| Benchmarks | |||||||
| Gross Profit Margin, Competitors2 | |||||||
| Accenture PLC | — | 31.91% | 32.61% | 32.34% | 31.99% | 32.38% | |
| Adobe Inc. | — | 89.27% | 89.04% | 87.87% | 87.70% | 88.18% | |
| AppLovin Corp. | — | 87.86% | 75.22% | 67.74% | 55.41% | 64.62% | |
| Cadence Design Systems Inc. | — | 86.36% | 86.05% | 89.36% | 89.57% | 89.73% | |
| CrowdStrike Holdings Inc. | 74.67% | 74.92% | 75.27% | 73.17% | 73.60% | 73.75% | |
| Datadog Inc. | — | 79.96% | 80.79% | 80.74% | 79.30% | 77.23% | |
| International Business Machines Corp. | — | 58.19% | 56.65% | 55.45% | 54.00% | 54.90% | |
| Intuit Inc. | — | 79.57% | 78.72% | 78.13% | 81.09% | 82.53% | |
| Microsoft Corp. | 67.94% | 68.82% | 69.76% | 68.92% | 68.40% | 68.93% | |
| Palantir Technologies Inc. | — | 82.37% | 80.25% | 80.62% | 78.56% | 77.99% | |
| Palo Alto Networks Inc. | — | 73.41% | 74.35% | 72.29% | 68.76% | 70.05% | |
| Salesforce Inc. | 77.68% | 77.19% | 75.50% | 73.34% | 73.48% | 74.41% | |
| ServiceNow Inc. | — | 77.53% | 79.18% | 78.59% | 78.29% | 77.05% | |
| Synopsys Inc. | — | 76.98% | 79.68% | 79.08% | 79.07% | 79.50% | |
| Workday Inc. | 75.70% | 75.50% | 75.60% | 72.41% | 72.21% | 72.25% | |
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).
1 2026 Calculation
Gross profit margin = 100 × Gross profit ÷ Revenues
= 100 × 44,336 ÷ 67,357 = 65.82%
2 Click competitor name to see calculations.
Financial performance between 2021 and 2026 is characterized by a consistent increase in absolute revenue and gross profit, juxtaposed with a steady decline in gross profit margins. While the scale of operations has expanded significantly, the cost associated with generating that revenue has grown at a faster rate, leading to diminished operational efficiency in terms of gross profitability.
- Revenue Trajectory
- A continuous upward trend in revenues is observed, growing from 40,479 million US$ in 2021 to 67,357 million US$ by 2026. The most substantial year-over-year increase occurred between 2025 and 2026, representing a significant acceleration in top-line growth toward the end of the period.
- Gross Profit Growth
- Gross profit increased steadily over the six-year period, rising from 32,624 million US$ in 2021 to 44,336 million US$ in 2026. Despite this absolute growth, the pace of profit increase remained lower than the pace of revenue growth, indicating rising cost of sales.
- Gross Profit Margin Contraction
- A persistent downward trend is evident in the gross profit margin, which fell from 80.59% in 2021 to 65.82% in 2026. A notable deceleration occurred between 2022 and 2023, where the margin dropped by 6.23 percentage points. The margin continued to erode throughout the remainder of the period, suggesting a shift in the cost structure or a change in the product and service mix toward lower-margin offerings.
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Operating Profit Margin
Oracle Corp., operating profit margin calculation, comparison to benchmarks
| May 31, 2026 | May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Operating income | 20,606) | 17,678) | 15,353) | 13,093) | 10,926) | 15,213) | |
| Revenues | 67,357) | 57,399) | 52,961) | 49,954) | 42,440) | 40,479) | |
| Profitability Ratio | |||||||
| Operating profit margin1 | 30.59% | 30.80% | 28.99% | 26.21% | 25.74% | 37.58% | |
| Benchmarks | |||||||
| Operating Profit Margin, Competitors2 | |||||||
| Accenture PLC | — | 14.68% | 14.79% | 13.74% | 15.21% | 15.08% | |
| Adobe Inc. | — | 36.63% | 31.35% | 34.26% | 34.64% | 36.76% | |
| AppLovin Corp. | — | 75.75% | 39.78% | 19.74% | -1.70% | 5.37% | |
| Cadence Design Systems Inc. | — | 28.17% | 29.10% | 30.59% | 30.15% | 26.07% | |
| CrowdStrike Holdings Inc. | -6.10% | -3.05% | -0.07% | -8.48% | -9.82% | -10.58% | |
| Datadog Inc. | — | -1.29% | 2.02% | -1.57% | -3.50% | -1.86% | |
| International Business Machines Corp. | — | 17.50% | 14.95% | 15.17% | 13.50% | 11.97% | |
| Intuit Inc. | — | 26.14% | 22.29% | 21.86% | 20.20% | 25.95% | |
| Microsoft Corp. | 46.78% | 45.62% | 44.64% | 41.77% | 42.06% | 41.59% | |
| Palantir Technologies Inc. | — | 31.59% | 10.83% | 5.39% | -8.46% | -26.66% | |
| Palo Alto Networks Inc. | — | 13.48% | 8.52% | 5.62% | -3.43% | -7.15% | |
| Salesforce Inc. | 20.06% | 19.01% | 14.38% | 3.29% | 2.07% | 2.14% | |
| ServiceNow Inc. | — | 13.74% | 12.42% | 8.49% | 4.90% | 4.36% | |
| Synopsys Inc. | — | 12.97% | 22.13% | 21.72% | 22.87% | 17.48% | |
| Workday Inc. | 7.55% | 4.91% | 2.52% | -3.57% | -2.27% | -5.76% | |
| Operating Profit Margin, Sector | |||||||
| Software & Services | — | 32.45% | 30.31% | 27.20% | 27.08% | 27.93% | |
| Operating Profit Margin, Industry | |||||||
| Information Technology | — | 30.83% | 26.54% | 24.37% | 26.31% | 26.64% | |
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).
1 2026 Calculation
Operating profit margin = 100 × Operating income ÷ Revenues
= 100 × 20,606 ÷ 67,357 = 30.59%
2 Click competitor name to see calculations.
The financial trajectory between 2021 and 2026 exhibits a period of initial volatility followed by sustained recovery and expansion. While top-line growth remained consistent throughout the period, operating efficiency experienced a significant correction in 2022 before establishing a new, stable growth path.
- Revenue Growth Trends
- Revenues demonstrate a consistent upward trajectory, increasing from US$ 40,479 million in 2021 to US$ 67,357 million by 2026. This steady expansion indicates a robust increase in market demand or pricing power over the six-year period.
- Operating Income Performance
- Operating income underwent a sharp contraction in 2022, dropping to US$ 10,926 million from US$ 15,213 million in 2021. Subsequently, a recovery phase ensued, with operating income growing annually to reach US$ 20,606 million by 2026. The recovery surpassed 2021 levels by the 2024 fiscal year.
- Operating Profit Margin Analysis
- The operating profit margin experienced a substantial decline from 37.58% in 2021 to a low of 25.74% in 2022. Following this trough, margins trended upward, reaching 30.80% in 2025 before stabilizing at 30.59% in 2026. This pattern suggests that although the company did not return to its 2021 profitability peak, it successfully optimized its operating cost structure to sustain a margin above 30% in the latter years of the period.
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Net Profit Margin
Oracle Corp., net profit margin calculation, comparison to benchmarks
| May 31, 2026 | May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income | 17,087) | 12,443) | 10,467) | 8,503) | 6,717) | 13,746) | |
| Revenues | 67,357) | 57,399) | 52,961) | 49,954) | 42,440) | 40,479) | |
| Profitability Ratio | |||||||
| Net profit margin1 | 25.37% | 21.68% | 19.76% | 17.02% | 15.83% | 33.96% | |
| Benchmarks | |||||||
| Net Profit Margin, Competitors2 | |||||||
| Accenture PLC | — | 11.02% | 11.19% | 10.72% | 11.17% | 11.69% | |
| Adobe Inc. | — | 30.00% | 25.85% | 27.97% | 27.01% | 30.55% | |
| AppLovin Corp. | — | 60.83% | 33.55% | 10.87% | -6.84% | 1.27% | |
| Cadence Design Systems Inc. | — | 20.94% | 22.74% | 25.46% | 23.84% | 23.29% | |
| CrowdStrike Holdings Inc. | -3.38% | -0.49% | 2.92% | -8.18% | -16.18% | -10.59% | |
| Datadog Inc. | — | 3.14% | 6.85% | 2.28% | -2.99% | -2.02% | |
| International Business Machines Corp. | — | 15.69% | 9.60% | 12.13% | 2.71% | 10.01% | |
| Intuit Inc. | — | 20.55% | 18.19% | 16.59% | 16.23% | 21.41% | |
| Microsoft Corp. | 40.31% | 36.15% | 35.96% | 34.15% | 36.69% | 36.45% | |
| Palantir Technologies Inc. | — | 36.31% | 16.13% | 9.43% | -19.61% | -33.75% | |
| Palo Alto Networks Inc. | — | 12.30% | 32.11% | 6.38% | -4.85% | -11.72% | |
| Salesforce Inc. | 17.96% | 16.35% | 11.87% | 0.66% | 5.45% | 19.16% | |
| ServiceNow Inc. | — | 13.16% | 12.97% | 19.30% | 4.49% | 3.90% | |
| Synopsys Inc. | — | 18.89% | 36.94% | 21.05% | 19.38% | 18.02% | |
| Workday Inc. | 7.26% | 6.23% | 19.02% | -5.90% | 0.57% | -6.54% | |
| Net Profit Margin, Sector | |||||||
| Software & Services | — | 26.02% | 24.71% | 21.78% | 21.43% | 25.04% | |
| Net Profit Margin, Industry | |||||||
| Information Technology | — | 25.74% | 20.58% | 20.29% | 22.34% | 23.54% | |
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).
1 2026 Calculation
Net profit margin = 100 × Net income ÷ Revenues
= 100 × 17,087 ÷ 67,357 = 25.37%
2 Click competitor name to see calculations.
The financial performance from May 31, 2021, to May 31, 2026, is characterized by consistent revenue expansion and a gradual recovery in profitability following a significant contraction in the 2022 fiscal year.
- Revenue Trends
- Total revenues exhibit a steady and uninterrupted upward trajectory, increasing from US$ 40,479 million in 2021 to US$ 67,357 million by 2026. This growth indicates a sustained expansion of the company's top-line earnings over the observed six-year period.
- Net Income Trajectory
- Net income experienced a sharp decline in 2022, falling from US$ 13,746 million to US$ 6,717 million. Following this downturn, a consistent year-over-year recovery is observed. Net income rose steadily from 2023 through 2025, ultimately reaching US$ 17,087 million in 2026, which represents the highest absolute net income within the analyzed timeframe.
- Net Profit Margin Dynamics
- The net profit margin underwent a severe compression between 2021 and 2022, dropping from 33.96% to 15.83%. After reaching this trough, the margin entered a phase of steady improvement, rising to 17.02% in 2023, 19.76% in 2024, 21.68% in 2025, and ending at 25.37% in 2026. Although the margin remained below the 2021 level, the consistent annual increase suggests a progressive recovery in operational efficiency and profit conversion capabilities.
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Return on Equity (ROE)
Oracle Corp., ROE calculation, comparison to benchmarks
| May 31, 2026 | May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income | 17,087) | 12,443) | 10,467) | 8,503) | 6,717) | 13,746) | |
| Total Oracle Corporation stockholders’ equity (deficit) | 42,508) | 20,451) | 8,704) | 1,073) | (6,220) | 5,238) | |
| Profitability Ratio | |||||||
| ROE1 | 40.20% | 60.84% | 120.26% | 792.45% | — | 262.43% | |
| Benchmarks | |||||||
| ROE, Competitors2 | |||||||
| Accenture PLC | — | 24.61% | 25.68% | 26.75% | 31.11% | 30.25% | |
| Adobe Inc. | — | 61.34% | 39.42% | 32.86% | 33.85% | 32.59% | |
| AppLovin Corp. | — | 156.17% | 144.96% | 28.39% | -10.13% | 1.66% | |
| Cadence Design Systems Inc. | — | 20.26% | 22.58% | 30.58% | 30.93% | 25.39% | |
| CrowdStrike Holdings Inc. | -3.67% | -0.59% | 3.88% | -12.52% | -22.89% | -10.64% | |
| Datadog Inc. | — | 2.89% | 6.77% | 2.40% | -3.56% | -1.99% | |
| International Business Machines Corp. | — | 32.45% | 22.06% | 33.29% | 7.47% | 30.38% | |
| Intuit Inc. | — | 19.63% | 16.07% | 13.81% | 12.57% | 20.89% | |
| Microsoft Corp. | 30.23% | 29.65% | 32.83% | 35.09% | 43.68% | 43.15% | |
| Palantir Technologies Inc. | — | 22.00% | 9.24% | 6.04% | -14.57% | -22.71% | |
| Palo Alto Networks Inc. | — | 14.49% | 49.86% | 25.15% | -127.14% | -78.63% | |
| Salesforce Inc. | 12.61% | 10.13% | 6.93% | 0.36% | 2.48% | 9.81% | |
| ServiceNow Inc. | — | 13.48% | 14.83% | 22.69% | 6.46% | 6.22% | |
| Synopsys Inc. | — | 4.70% | 25.17% | 20.01% | 17.85% | 14.31% | |
| Workday Inc. | 8.88% | 5.82% | 17.09% | -6.57% | 0.65% | -8.62% | |
| ROE, Sector | |||||||
| Software & Services | — | 26.75% | 28.69% | 28.33% | 30.61% | 35.77% | |
| ROE, Industry | |||||||
| Information Technology | — | 34.73% | 29.28% | 31.78% | 38.79% | 42.14% | |
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).
1 2026 Calculation
ROE = 100 × Net income ÷ Total Oracle Corporation stockholders’ equity (deficit)
= 100 × 17,087 ÷ 42,508 = 40.20%
2 Click competitor name to see calculations.
The financial trajectory from 2021 to 2026 is characterized by a recovery in net income and a substantial expansion of the equity base, leading to a gradual normalization of profitability ratios.
- Net Income Performance
- Net income experienced a notable decline in 2022, falling to 6,717 million. However, a consistent growth pattern followed, with earnings increasing annually to reach a projected 17,087 million by 2026. This indicates a strong recovery and steady growth in bottom-line profitability over the analyzed period.
- Equity Base Dynamics
- Stockholders' equity exhibited extreme volatility, transitioning from 5,238 million in 2021 to a deficit of 6,220 million in 2022. Following this deficit, the equity position shifted toward aggressive growth, climbing to 1,073 million in 2023 and accelerating to 42,508 million by 2026. This rapid accumulation of equity suggests a significant shift in the company's capital structure.
- Return on Equity (ROE) Analysis
- The ROE demonstrated extreme fluctuations between 2021 and 2023, peaking at 792.45% in 2023. This anomaly is attributed to the thin equity base following the 2022 deficit, which mathematically inflated the ratio. From 2023 to 2026, a steady downward trend in ROE is observed, declining from 792.45% to 40.20%. This compression is driven by the fact that stockholders' equity grew at a significantly faster rate than net income, resulting in a more stabilized and sustainable profitability metric.
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Return on Assets (ROA)
Oracle Corp., ROA calculation, comparison to benchmarks
| May 31, 2026 | May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income | 17,087) | 12,443) | 10,467) | 8,503) | 6,717) | 13,746) | |
| Total assets | 261,759) | 168,361) | 140,976) | 134,384) | 109,297) | 131,107) | |
| Profitability Ratio | |||||||
| ROA1 | 6.53% | 7.39% | 7.42% | 6.33% | 6.15% | 10.48% | |
| Benchmarks | |||||||
| ROA, Competitors2 | |||||||
| Accenture PLC | — | 11.74% | 12.99% | 13.41% | 14.55% | 13.68% | |
| Adobe Inc. | — | 24.17% | 18.39% | 18.23% | 17.51% | 17.70% | |
| AppLovin Corp. | — | 45.92% | 26.92% | 6.66% | -3.30% | 0.58% | |
| Cadence Design Systems Inc. | — | 10.92% | 11.76% | 18.36% | 16.53% | 15.87% | |
| CrowdStrike Holdings Inc. | -1.47% | -0.22% | 1.34% | -3.65% | -6.49% | -3.39% | |
| Datadog Inc. | — | 1.62% | 3.18% | 1.23% | -1.67% | -0.87% | |
| International Business Machines Corp. | — | 6.97% | 4.39% | 5.55% | 1.29% | 4.35% | |
| Intuit Inc. | — | 10.47% | 9.22% | 8.58% | 7.45% | 13.29% | |
| Microsoft Corp. | 17.64% | 16.45% | 17.21% | 17.56% | 19.94% | 18.36% | |
| Palantir Technologies Inc. | — | 18.26% | 7.29% | 4.64% | -10.80% | -16.02% | |
| Palo Alto Networks Inc. | — | 4.81% | 12.89% | 3.03% | -2.18% | -4.87% | |
| Salesforce Inc. | 6.64% | 6.02% | 4.14% | 0.21% | 1.52% | 6.14% | |
| ServiceNow Inc. | — | 6.71% | 6.99% | 9.96% | 2.44% | 2.13% | |
| Synopsys Inc. | — | 2.76% | 17.31% | 11.90% | 10.45% | 8.66% | |
| Workday Inc. | 3.83% | 2.93% | 8.39% | -2.72% | 0.28% | -3.24% | |
| ROA, Sector | |||||||
| Software & Services | — | 12.06% | 12.19% | 11.12% | 11.25% | 12.14% | |
| ROA, Industry | |||||||
| Information Technology | — | 15.40% | 11.91% | 12.44% | 14.47% | 14.59% | |
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).
1 2026 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × 17,087 ÷ 261,759 = 6.53%
2 Click competitor name to see calculations.
The analysis of the return on assets (ROA) reveals a period of volatility followed by a divergent trend between absolute profitability and asset efficiency. While net income demonstrates a strong recovery and expansion phase, the overall efficiency of asset utilization has remained below the levels observed at the start of the period.
- Profitability Trends
- Net income experienced a significant contraction in 2022, falling to 6,717 million from 13,746 million in 2021. However, a consistent upward trajectory followed, with income increasing annually to reach a peak of 17,087 million by May 31, 2026. This represents a robust recovery in absolute earnings over the five-year period.
- Asset Base Dynamics
- Total assets fluctuated initially, decreasing to 109,297 million in 2022 before entering a phase of aggressive expansion. A substantial increase is observed between 2025 and 2026, where assets grew from 168,361 million to 261,759 million, indicating a significant increase in the company's investment in its resource base.
- Return on Assets (ROA) Interpretation
- The ROA declined sharply from 10.48% in 2021 to 6.15% in 2022, primarily driven by the contraction in net income. A moderate recovery occurred through 2024, peaking at 7.42%. Despite the record net income achieved in 2026, the ROA declined to 6.53%. This downward movement in the final period is attributed to the disproportionate growth of total assets, which outpaced the growth in net income, thereby reducing the overall efficiency of the asset base.
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