Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Oracle Corp., FCFF calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2020-05-31).
- Net Cash Provided by Operating Activities
- The net cash provided by operating activities demonstrates notable fluctuations over the analyzed periods. Starting at 13,139 million USD in 2020, there is a significant increase to 15,887 million USD in 2021. However, this is followed by a considerable decline to 9,539 million USD in 2022. Subsequently, the figure rebounds sharply to 17,165 million USD in 2023 and continues an upward trajectory reaching 18,673 million USD in 2024 and 20,821 million USD in 2025. Overall, despite temporary volatility, the trend is upward, culminating in a strong increase in cash flows from operations by 2025.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow to the firm exhibits a less consistent pattern. Beginning at 13,231 million USD in 2020, it remains relatively stable in 2021 at 15,654 million USD, followed by a sharp decrease to 7,429 million USD in 2022. Although recovery occurs in 2023 with an increase to 11,499 million USD, the figure further rises to 15,064 million USD in 2024 but sharply drops in 2025 to 2,572 million USD. This pattern reflects significant volatility in the firm's capacity to generate free cash flow, with a marked decline in the latest period analyzed.
- Comparative Insights
- While net cash provided by operating activities shows a general increasing trend after an initial dip, free cash flow to the firm does not maintain a consistent recovery and shows a drastic fall in the final period. This divergence may indicate increased capital expenditures or other investing activities consuming operating cash flows, thus reducing free cash flow despite strong operational cash generation.
Interest Paid, Net of Tax
Oracle Corp., interest paid, net of tax calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2020-05-31).
2 2025 Calculation
Cash paid for interest, tax = Cash paid for interest × EITR
= 3,374 × 12.10% = 408
- Effective Income Tax Rate (EITR)
- The effective income tax rate exhibits a fluctuating trend over the years observed. Starting at 16% in 2020, it increased to 21% in 2021, indicating a higher tax burden that year. Subsequently, the rate experienced a significant decrease to 12.2% in 2022 and further declined sharply to 6.8% in 2023. After this low point, the rate increased again to 10.9% in 2024 and then to 12.1% in 2025. Overall, the pattern reflects volatility in the effective tax rate with a notable dip in 2023, followed by a gradual upward adjustment.
- Cash Paid for Interest, Net of Tax
- The cash paid for interest, net of tax, shows a consistent upward trend from 2020 to 2024, increasing from $1,656 million to $3,257 million. This represents nearly a doubling of interest payments over five years, indicating rising interest expenses or increased borrowings. However, in 2025, there is a slight decline to $2,966 million, which may suggest some reduction in interest-bearing liabilities or refinancing activities leading to lower interest payments. Despite this drop, the overall trend across the period is an increase in interest cash payments, reflecting growing financing costs.
Enterprise Value to FCFF Ratio, Current
Oracle Corp., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 751,409) |
| Free cash flow to the firm (FCFF) | 2,572) |
| Valuation Ratio | |
| EV/FCFF | 292.18 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Accenture PLC | 21.62 |
| Adobe Inc. | 19.86 |
| Cadence Design Systems Inc. | 77.27 |
| CrowdStrike Holdings Inc. | 114.77 |
| Fair Isaac Corp. | 69.39 |
| International Business Machines Corp. | 22.44 |
| Intuit Inc. | 45.77 |
| Microsoft Corp. | 58.14 |
| Palantir Technologies Inc. | 273.34 |
| Palo Alto Networks Inc. | 42.82 |
| Salesforce Inc. | 20.21 |
| ServiceNow Inc. | 62.46 |
| Synopsys Inc. | 63.14 |
| Workday Inc. | 26.11 |
| EV/FCFF, Sector | |
| Software & Services | 48.28 |
| EV/FCFF, Industry | |
| Information Technology | 50.80 |
Based on: 10-K (reporting date: 2025-05-31).
1 Click competitor name to see calculations.
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
Oracle Corp., historical EV/FCFF calculation, comparison to benchmarks
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Enterprise value (EV)1 | 677,116) | 470,583) | 412,025) | 234,771) | 256,153) | 198,329) | |
| Free cash flow to the firm (FCFF)2 | 2,572) | 15,064) | 11,499) | 7,429) | 15,654) | 13,231) | |
| Valuation Ratio | |||||||
| EV/FCFF3 | 263.29 | 31.24 | 35.83 | 31.60 | 16.36 | 14.99 | |
| Benchmarks | |||||||
| EV/FCFF, Competitors4 | |||||||
| Accenture PLC | — | 25.76 | 20.26 | 16.99 | 24.76 | 17.90 | |
| Adobe Inc. | — | 21.98 | 37.75 | 20.82 | 33.61 | 40.43 | |
| Cadence Design Systems Inc. | — | 61.26 | 63.83 | 44.54 | 35.05 | 44.13 | |
| CrowdStrike Holdings Inc. | 67.26 | 81.46 | 38.65 | 96.35 | 141.44 | 807.14 | |
| Fair Isaac Corp. | — | 77.83 | 46.25 | 23.33 | 26.12 | 37.52 | |
| International Business Machines Corp. | — | 20.11 | 15.27 | 16.47 | 13.10 | 9.35 | |
| Intuit Inc. | — | 36.79 | 31.28 | 32.85 | 48.64 | 37.90 | |
| Microsoft Corp. | — | 49.30 | 41.75 | 32.31 | 38.37 | 33.99 | |
| Palantir Technologies Inc. | — | 251.61 | 69.13 | 82.97 | 66.45 | — | |
| Palo Alto Networks Inc. | — | 34.69 | 28.15 | 29.30 | 32.74 | 26.50 | |
| Salesforce Inc. | 21.83 | 29.95 | 28.41 | 35.97 | 44.91 | 39.63 | |
| ServiceNow Inc. | — | 60.21 | 56.55 | 40.86 | 60.13 | 83.74 | |
| Synopsys Inc. | — | 56.23 | 55.87 | 30.82 | 38.59 | 42.88 | |
| Workday Inc. | 26.14 | 32.57 | 33.40 | 45.74 | 57.52 | 72.44 | |
| EV/FCFF, Sector | |||||||
| Software & Services | — | 41.40 | 35.81 | 29.81 | 32.52 | 28.14 | |
| EV/FCFF, Industry | |||||||
| Information Technology | — | 40.41 | 34.37 | 26.67 | 27.51 | 23.95 | |
Based on: 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), 10-K (reporting date: 2020-05-31).
3 2025 Calculation
EV/FCFF = EV ÷ FCFF
= 677,116 ÷ 2,572 = 263.29
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value exhibited a generally increasing trend from 2020 through 2025, beginning at approximately 198 billion USD in 2020 and rising to over 677 billion USD by 2025. Notable growth occurred particularly between 2022 and 2023, where the value surged from about 235 billion USD to over 412 billion USD. This upward momentum continued, reaching the highest point of 677 billion USD in 2025.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow to the firm showed a less consistent pattern. It started at 13.2 billion USD in 2020, gradually increased to 15.7 billion USD by 2021, but then declined sharply to 7.4 billion USD in 2022. A partial recovery took place in subsequent years, with values rising to 11.5 billion USD in 2023 and 15.1 billion USD in 2024. However, in 2025, there was a significant drop to 2.6 billion USD, indicating variability and potential volatility in cash generation.
- EV/FCFF Ratio
- The EV to FCFF ratio demonstrated a rising trajectory from 2020 through 2025, with an initial value of approximately 15 in 2020 rising steadily to over 35 in 2023. Despite a slight decrease to about 31 in 2024, the ratio then experienced an extraordinary spike to over 263 in 2025. This surge can be attributed to the large increase in enterprise value coupled with the sharp decline in free cash flow to the firm in that year, suggesting a potential overvaluation or decreased cash profitability relative to enterprise value.
- Summary Insights
- The enterprise value growth indicates increasing market valuation or perceived company worth over the period. However, the inconsistent and sharply declining free cash flow in 2025 raises concerns regarding operational cash generation. The substantial increase in the EV/FCFF ratio especially in 2025 suggests that the company’s valuation may not be supported by its free cash flow performance, which could imply increased financial risk or the need for further investigation into the drivers behind these shifts.