Analysis of Reportable Segments
Oracle Corp. operates in 3 segments: Cloud and software business; Hardware business; and Services business.
Segment Profit Margin
Oracle Corp., profit margin by reportable segment
| May 31, 2026 | May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | |
|---|---|---|---|---|---|---|
| Cloud and software business | 58.89% | 62.83% | 64.13% | 63.59% | 66.80% | 67.94% |
| Hardware business | 65.40% | 65.33% | 62.46% | 59.01% | 59.00% | 60.32% |
| Services business | 26.69% | 18.98% | 16.87% | 19.74% | 20.78% | 20.79% |
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).
An analysis of the reportable segment profit margins reveals divergent performance trajectories across the three primary business units between 2021 and 2026. While the historically highest-margin segment experienced a consistent contraction, the remaining segments demonstrated growth and recovery in the latter half of the period.
- Cloud and Software Business
- A steady downward trend is observed in the profit margins for this segment, which fell from 67.94% in 2021 to 58.89% in 2026. Despite a marginal increase in 2024, the overarching pattern indicates significant margin compression, particularly between 2024 and 2026, where the margin declined by approximately 5.24 percentage points.
- Hardware Business
- The hardware segment exhibits a positive growth trend over the analyzed period. After a slight initial decrease to 59.00% in 2022, margins expanded consistently to reach 65.40% by 2026. By the end of the period, this segment's profitability exceeded that of the cloud and software business, suggesting an improvement in operational efficiency or a shift in product mix.
- Services Business
- Profit margins within the services segment showed notable volatility, characterized by an initial decline followed by a sharp recovery. Margins decreased from 20.79% in 2021 to a period low of 16.87% in 2024. Subsequently, a strong upward trend emerged, with margins increasing to 26.69% by 2026, representing the highest profitability level for this segment across the six-year duration.
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Segment Profit Margin: Cloud and software business
Oracle Corp.; Cloud and software business; segment profit margin calculation
| May 31, 2026 | May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Margin | 34,468) | 30,930) | 28,514) | 26,126) | 24,083) | 23,169) |
| Revenues | 58,530) | 49,230) | 44,464) | 41,086) | 36,052) | 34,101) |
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | 58.89% | 62.83% | 64.13% | 63.59% | 66.80% | 67.94% |
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
Segment profit margin = 100 × Margin ÷ Revenues
= 100 × 34,468 ÷ 58,530 = 58.89%
The Cloud and software business demonstrates a consistent expansion in both total revenues and absolute segment profits over the observed period. However, this growth is accompanied by a steady compression of the segment profit margin, indicating that operational expenses are increasing at a faster rate than revenue growth.
- Revenue Growth Trends
- A strong upward trajectory in revenues is observed, rising from 34,101 million USD in 2021 to a projected 58,530 million USD by 2026. The most significant acceleration in revenue growth occurs between 2025 and 2026, where an increase of over 9 billion USD is anticipated.
- Absolute Profit Performance
- Segment profit shows a positive linear trend, increasing from 23,169 million USD in 2021 to 34,468 million USD in 2026. While the nominal profit continues to grow annually, the pace of this increase does not keep pace with the growth of the top-line revenue.
- Profit Margin Analysis
- The segment profit margin exhibits a general downward trend, declining from a high of 67.94% in 2021 to 58.89% by 2026. Although a slight recovery is noted in 2024, where the margin rose to 64.13% from 63.59% in 2023, the overall trend indicates a reduction in profitability efficiency of approximately 9 percentage points over the six-year period.
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Segment Profit Margin: Hardware business
Oracle Corp.; Hardware business; segment profit margin calculation
| May 31, 2026 | May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Margin | 2,017) | 1,918) | 1,915) | 1,932) | 1,878) | 2,026) |
| Revenues | 3,084) | 2,936) | 3,066) | 3,274) | 3,183) | 3,359) |
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | 65.40% | 65.33% | 62.46% | 59.01% | 59.00% | 60.32% |
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
Segment profit margin = 100 × Margin ÷ Revenues
= 100 × 2,017 ÷ 3,084 = 65.40%
The hardware business segment exhibits a diverging trend between top-line revenue performance and bottom-line profitability efficiency. While total revenues have experienced a general decline over the observed period, the segment profit margin has expanded, indicating a successful optimization of cost structures or a strategic shift toward higher-margin offerings.
- Revenue Performance
- Annual revenues peaked at 3,359 million US dollars in 2021 before entering a period of volatility and gradual decline. A notable low point occurred in 2025 with revenues dropping to 2,936 million US dollars. Although a slight recovery to 3,084 million US dollars is observed by 2026, the overall revenue trajectory remains lower than the 2021 baseline.
- Absolute Segment Profit
- Profitability in absolute terms remained relatively resilient despite the fluctuations in revenue. After a dip to 1,878 million US dollars in 2022, the margin stabilized around the 1,900 million US dollar mark between 2023 and 2025. By 2026, absolute profit recovered to 2,017 million US dollars, nearly returning to the levels seen at the start of the period.
- Segment Profit Margin Expansion
- The most significant trend is the steady increase in the segment profit margin percentage. Following a trough of 59.00% in 2022, the margin entered a period of consistent growth, reaching 62.46% in 2024 and further climbing to 65.40% by 2026. This expansion demonstrates that the segment is generating more profit per dollar of revenue, effectively decoupling profitability from revenue growth.
The correlation between decreasing revenues and increasing profit margins suggests an improvement in operational leverage or a disciplined approach to cost management. The ability to maintain and eventually increase absolute profit while operating on a smaller revenue base points to enhanced efficiency within the hardware segment's value chain.
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Segment Profit Margin: Services business
Oracle Corp.; Services business; segment profit margin calculation
| May 31, 2026 | May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Margin | 1,533) | 993) | 916) | 1,104) | 666) | 628) |
| Revenues | 5,743) | 5,233) | 5,431) | 5,594) | 3,205) | 3,021) |
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | 26.69% | 18.98% | 16.87% | 19.74% | 20.78% | 20.79% |
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
Segment profit margin = 100 × Margin ÷ Revenues
= 100 × 1,533 ÷ 5,743 = 26.69%
The Services segment experienced significant fluctuations in both top-line growth and operational efficiency between May 2021 and May 2026. While total revenue and absolute profit generally trended upward over the six-year period, the segment profit margin percentage exhibited a U-shaped trajectory, characterized by mid-period compression followed by a substantial recovery.
- Revenue Performance
- Revenue grew from US$ 3,021 million in May 2021 to a peak of US$ 5,594 million in May 2023, representing a substantial increase in scale. Following this peak, a period of slight contraction occurred, with revenues dipping to US$ 5,233 million by May 2025, before rebounding to a final high of US$ 5,743 million in May 2026.
- Profitability and Margin Analysis
- Profit margins remained stable at approximately 20.8% during the first two years. However, a downward trend emerged starting in 2023, with the margin declining to 19.74% and reaching a low of 16.87% in May 2024. This decline in margin percentage coincided with a period of rapid revenue expansion, suggesting that the costs associated with scaling the services business initially outpaced revenue growth.
- Operational Recovery and Efficiency Gains
- A marked improvement in operational efficiency is observed starting in May 2025. The segment profit margin rose to 18.98% in 2025 and surged to a period high of 26.69% in May 2026. This recovery is reflected in the absolute profit figures, which reached their highest point of US$ 1,533 million in the final year, indicating a successful optimization of the cost structure or a strategic shift toward higher-margin service offerings.
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Revenues
Oracle Corp., revenues by reportable segment
US$ in millions
| May 31, 2026 | May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | |
|---|---|---|---|---|---|---|
| Cloud and software business | 58,530) | 49,230) | 44,464) | 41,086) | 36,052) | 34,101) |
| Hardware business | 3,084) | 2,936) | 3,066) | 3,274) | 3,183) | 3,359) |
| Services business | 5,743) | 5,233) | 5,431) | 5,594) | 3,205) | 3,021) |
| Total | 67,357) | 57,399) | 52,961) | 49,954) | 42,440) | 40,481) |
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).
Total revenue demonstrates a consistent upward trajectory, increasing from US$ 40,481 million in 2021 to US$ 67,357 million by 2026. The overall growth is primarily driven by the aggressive expansion of the cloud and software segment, which has become the dominant contributor to the company's financial performance.
- Cloud and Software Business Growth
- This segment exhibits uninterrupted growth throughout the period, rising from US$ 34,101 million in 2021 to US$ 58,530 million in 2026. A notable acceleration in revenue is observed between 2025 and 2026, where the segment increased by over US$ 9 billion in a single year, indicating a significant scaling of cloud operations.
- Hardware Business Trends
- The hardware segment remains relatively stagnant, with revenues fluctuating minimally between a high of US$ 3,359 million in 2021 and a low of US$ 2,936 million in 2025. The lack of significant growth suggests that hardware has become a legacy component of the revenue mix with diminishing strategic importance.
- Services Business Performance
- A substantial increase in services revenue occurred between 2022 and 2023, with figures rising from US$ 3,205 million to US$ 5,594 million. Following this surge, the segment entered a period of relative stability, concluding the period at US$ 5,743 million in 2026.
- Revenue Mix Shift
- The composition of total revenue has shifted heavily toward software and cloud services. In 2021, the Cloud and software business represented approximately 84% of total revenues; by 2026, this share increased to approximately 87%, confirming a strategic concentration on higher-growth, scalable software solutions.
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Margin
Oracle Corp., margin by reportable segment
US$ in millions
| May 31, 2026 | May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | |
|---|---|---|---|---|---|---|
| Cloud and software business | 34,468) | 30,930) | 28,514) | 26,126) | 24,083) | 23,169) |
| Hardware business | 2,017) | 1,918) | 1,915) | 1,932) | 1,878) | 2,026) |
| Services business | 1,533) | 993) | 916) | 1,104) | 666) | 628) |
| Total | 38,018) | 33,841) | 31,345) | 29,162) | 26,627) | 25,823) |
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).
Total revenue demonstrates a consistent upward trajectory, increasing from 25,823 million USD in 2021 to a projected 38,018 million USD by 2026. This growth is driven predominantly by the expansion of the cloud and software segment, while other business units contribute minimally to the overall growth rate.
- Cloud and Software Business Growth
- This segment exhibits a steady and accelerating growth pattern, rising from 23,169 million USD in 2021 to 34,468 million USD in 2026. The consistent year-over-year increases indicate that this business unit is the primary engine of corporate expansion and the central focus of the company's revenue generation.
- Hardware Business Stagnation
- Revenue within the hardware segment remains largely flat over the analyzed period. After a slight decline from 2,026 million USD in 2021 to a low of 1,878 million USD in 2022, the segment maintains a narrow range, ending at a projected 2,017 million USD in 2026. This suggests a mature or stagnant product line with little to no organic growth.
- Services Business Volatility
- The services segment displays significant fluctuations. Revenue grew from 628 million USD in 2021 to a peak of 1,104 million USD in 2023, before experiencing a contraction to 916 million USD in 2024. However, a recovery is projected, with revenue expected to reach 1,533 million USD by 2026.
- Revenue Mix and Segment Concentration
- A high degree of revenue concentration is observed in the cloud and software business. This segment's contribution to total revenue increased from approximately 89.7% in 2021 to a projected 90.7% in 2026. Conversely, the relative importance of the hardware and services segments has diminished, indicating a strategic shift toward a software-centric revenue model.
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