Oracle (ORCL) 10-K risk factor changes: FY2024 vs FY2023

We may be unsuccessful in developing and selling new products and services, integrating acquired products and services and enhancing our existing products and services. [removed: Rapid] [added: Our industry is characterized by rapid] technological advances, intense competition, changing delivery [removed: models and] [added: models,] evolving standards in [removed: computer hardware and software development and] communications infrastructure, [removed: changing and] increasingly sophisticated customer needs and frequent new product introductions and [removed: enhancements characterize the industries in which we compete.][added: enhancements.]

[removed: If] [added: We have continued to refresh and release new offerings of our cloud products and services, but if] we are unable to develop new or sufficiently differentiated products and services, enhance and improve our product offerings and support services in a timely manner or position and price our products and services to meet demand, customers may not purchase or subscribe to our license, hardware or cloud offerings or renew license support, hardware support or cloud subscriptions contracts.

[added: Our AI products may not operate as anticipated, which could adversely affect our reputation, revenues and profitability.] Machine learning and [removed: AI] [added: AI, including generative AI,] are increasingly driving innovations in technology, [removed: but if they fail to operate as anticipated or our other products do not perform as promised, our business] and [removed: reputation may be harmed.][added: AI technology and services are highly competitive and rapidly evolving.]

In addition, our profitability and revenues could be adversely impacted if we [removed: lost] [added: lose] one or more of our key customers for any reason, including as a result of any of the factors discussed above.

Additionally, the increasing prevalence of [added: various] cloud [removed: and SaaS delivery] [added: offering] models [removed: offered] by us and our competitors may unfavorably impact the pricing of our cloud and license offerings.

Customers predominantly purchase our cloud offerings on a subscription [removed: basis] [added: basis,] and revenues from these offerings are generally recognized ratably or as services are consumed over the terms of the subscriptions.

[added: If we are unable to secure data center capacity at affordable rates or do not accurately plan for our infrastructure capacity requirements, our profitability may decline.] As a part of our Oracle Cloud strategy, we plan our investment levels based on estimates of future revenues and future anticipated rates of growth.

In connection with these investments, we entered, and expect to continue to enter, into long-term operating lease commitments with [removed: third party] [added: third-party] data center providers that generally require us to pay significant contract termination fees to early exit such obligations should our strategies change, which could adversely impact our profitability and cash flows.

[removed: In addition, we outfit these data centers with equipment and improvements that we] [added: We] typically depreciate [added: these assets] over their estimated useful lives, which could be shortened should our cloud strategies change, which could adversely affect our profitability.

Errors in our cloud, license or hardware [removed: offerings] [added: offerings, or errors embedded in third-party software products or services incorporated into our own products,] could affect their ability to properly function, integrate or operate with other cloud, license or hardware offerings, could result in service interruptions, delays or outages of our cloud offerings, could create security vulnerabilities in our products or services, could delay the development or release of new products or services or new versions of products or services, and could adversely affect market acceptance of our products or services.

[removed: Therefore, any flaws could affect our and our customers’] abilities to conduct business operations and to ensure accuracy in financial processes and reporting, and may result in unanticipated costs and interruptions.

Enterprise customers rely on our cloud, license and hardware offerings and related services to run their businesses, and errors in our cloud, license and hardware offerings and related services [added: could expose us to product liability, performance and warranty claims as well as significant harm to our brand and reputation, which could impact our future sales.]

This multicloud strategy could lead our customers to migrate away from our cloud offerings to our competitors’ [added: products or limit their purchases of additional Oracle] products, [added: either of] which could adversely affect our revenues and profitability.

If our competitors offer deep discounts on certain products or services or develop products that the marketplace considers more valuable, we may need to lower prices, introduce pricing models and offerings or offer other terms that are less favorable to [removed: us, in order] [added: us] to compete successfully.

If we do not adapt our pricing models to reflect changes in customer use of our [removed: products or] [added: products,] changes in customer [removed: demand,] [added: demand or increased competition,] our revenues could decrease.

Any failure to maintain high-quality technical support, or a market perception that we do not maintain high-quality technical support, could adversely affect our reputation, [added: our ability to sell and renew our applications and infrastructure offerings to existing and prospective customers, and our business, operating results, and financial position.]

Our supply chain operations [removed: could be disrupted] [added: are affected] by industry consolidation and component constraints or shortages, natural disasters, political [removed: unrest,] [added: unrest (such as the tensions between China and Taiwan),] public health crises, changes to trade laws or regulations, port [removed: stoppages] [added: stoppages, shipping interruptions] or other transportation disruptions or slowdowns, [removed: or] [added: and] other factors affecting the countries or regions where these single source component vendors are located or where the products are being [removed: shipped (such as the tensions between China and Taiwan).][added: shipped.]

If [added: disruption caused by] one or more of the risks described above occurs, our cloud and license business and hardware business and related operating results could be materially and adversely affected.

We outsource [removed: a majority] [added: most] of our manufacturing, assembly, delivery and technology of, and certain component designs for, our hardware products to a variety of companies, many of which are located outside the U.S. From time to time, these partners experience production problems, delays or cannot meet our demand for products.

Our periodic workforce restructurings and reorganizations can be disruptive. We [removed: are currently restructuring our workforce and in the past we have restructured] [added: periodically restructure] or [removed: made] [added: make] other adjustments to our workforce in response to management changes, product changes, performance issues, changes in strategies, acquisitions and other internal and external considerations.

These types of restructurings have resulted, and may in the future result, in increased restructuring costs and temporary reduced productivity while [removed: the] employees [removed: adjusted] [added: adjust] to [removed: their new roles and responsibilities.][added: the restructuring.]

In the technology industry, there is substantial and continuous competition for highly skilled business, product [removed: development, technical] [added: development] and [removed: other personnel.][added: technical personnel, particularly in the AI field.]

[removed: With] rare exceptions, we do not have long-term employment or non-competition agreements with our employees.

We continually focus on improving our cost structure by hiring personnel in countries where advanced technical [removed: expertise] and other expertise are available at lower costs.

Our general compensation program includes restricted stock units [added: (RSUs)] and performance-based equity, which are important tools in attracting and retaining employees in our industry.

We continually evaluate our compensation practices and consider changes from time to time, [removed: such as reducing the number of employees granted equity awards or the number of equity awards granted per employee and granting alternative forms of stock-based compensation,] which may have an impact on our ability to retain employees and the amount of stock-based compensation expense that we record.

There are risks associated with our cloud and license and hardware indirect sales channels which could affect our future operating results. Our cloud and [removed: license,] [added: license] and hardware indirect channel networks are comprised primarily of resellers, system integrators/implementers, consultants, education providers, internet service providers, network integrators and [removed: independent software vendors.][added: ISVs.]

[added: an acquisition may not further our business strategy as we expected, we may not integrate an acquired company or technology as successfully as we expected, we may impose our business practices or alter] go-to-market strategies that adversely impact the acquired business or we may overpay for, or otherwise not realize the expected return on our investments, each or all of which could adversely affect our business or operating results and potentially cause impairment to assets that we recorded as a part of an acquisition, including intangible assets and goodwill;

our operating results or financial condition may be adversely impacted by (1) claims or liabilities that we assume from an acquired company or technology or that are otherwise related to an acquisition; (2) pre-existing contractual relationships that we assume from an acquired company, the termination or [removed: modification of which may be costly or disruptive to our business; and (3) unfavorable revenue recognition or other accounting treatment as a result of an acquired company’s business practices;]

we may be unable to obtain required approvals from governmental authorities under [added: foreign direct investment, foreign subsidy,] competition and antitrust laws on a timely basis, if at all, and we may need to divest or dispose of assets or businesses or take other actions [removed: in order] to obtain such approvals;

our use of cash to pay for acquisitions may limit other potential uses of our cash; [added: and]

we [removed: incurred additional debt to finance our acquisition of Cerner in fiscal 2023 and in the future, we] may have to incur additional debt to pay for [removed: other] acquisitions or have to delay or not proceed with an acquisition if we cannot obtain the necessary funding to complete the acquisition in a timely manner or on favorable [removed: terms; and][added: terms.]

If our security measures for our products and services are compromised and as a result, our data, our customers’ data or our IT systems are accessed improperly, made unavailable, or improperly modified, our products and services may be perceived as vulnerable, our brand and reputation could be damaged, the IT services we provide to our customers could be disrupted, and customers may stop using our products and services, any of which could reduce our revenue and earnings, increase our expenses and expose us to legal claims and regulatory actions. Our products and services, including Oracle Cloud Services, store, retrieve, [removed: manipulate] [added: process] and manage third-party data, such as our customers’ [removed: information and] data, as well as our own data.

We believe that Oracle [removed: in particular] is a target for computer [removed: hackers] [added: hackers, cyber threats] and other bad actors because Oracle stores and processes large amounts of data, including [removed: in customer sectors involving particularly] sensitive data such as health sciences (including patient health information), financial services, retail, [removed: hospitality] [added: hospitality, telecommunications] and [removed: the government.][added: government data.]

Third parties may attempt to fraudulently induce customers, partners, employees or suppliers into disclosing sensitive information such as user names, passwords or other information [removed: in order] to gain access to our data, our customers’, suppliers’ or partners’ data or the IT systems of Oracle, our customers, suppliers or partners.

[removed: Our products and] services, including our Oracle Cloud Services, may also be accessed or modified improperly as a result of customer, partner, employee, contractor or supplier error or malfeasance.

If a cyber-attack or other security incident results in unauthorized access [removed: to] [added: to,] or modification [removed: of] [added: or exfiltration of,] our customers’ or suppliers’ data, other external data, our own data or our IT systems, or if the services we provide to our customers are disrupted, or if our products or services are reported to have (or are perceived as having) security vulnerabilities, we could incur significant expenses and suffer substantial damage to our brand and reputation.

Our business practices with respect to data could give rise to operational interruption, liabilities or reputational harm as a result of governmental regulation, legal requirements or industry standards relating to privacy and data protection. As regulatory focus on privacy issues continues to increase and worldwide laws and regulations concerning the handling of personal information expand and become more [removed: complex,] [added: complex and stringent,] potential risks related to data collection and use within our business will intensify.

In addition, U.S. [added: federal] and [added: state as well as] foreign governments have enacted or are considering enacting legislation or regulations, or may in the near future interpret existing legislation or regulations, in a manner that could significantly impact our ability, as well as the ability of our customers, partners and data providers, to collect, augment, analyze, use, transfer (including across national borders) and share personal and other information that is integral to certain services we provide.

[removed: Our acquisition of Cerner during fiscal 2023] [added: We are] also [removed: subjects us] [added: subject] to [removed: additional] data privacy and other related regulations governing the healthcare industry and patient information, including but not limited to regulations governing electronic health data transmissions, the processing of patient information, healthcare fraud and healthcare information sharing.

We have invested, and expect to continue to invest, significant resources to build and support our AI products, and if our AI products fail to operate as anticipated or as well as competing products or otherwise do not meet customer needs or if our competitors’ AI products achieve higher market acceptance than ours, we may fail to recoup our investments in AI and our business and reputation may be harmed.

In addition, AI technologies are rapidly evolving and present emerging legal and ethical issues, including claims of bias, discrimination, a perceived lack of transparency, as well as sometimes unpredictable behaviors or improper use of copyrighted or other protected material, such as personal and patient health information, any of which could expose us or our customers to reputational or legal risk and inhibit adoption of our AI products.

Regulatory uncertainty, including the lack of comprehensive federal legislation, a patchwork of existing and proposed frameworks, and emerging regulatory initiatives, may expose us to compliance challenges and

uncertainties.

Our failure to adapt to these changes could result in legal and reputational consequences including, but not limited to, being required to adjust or limit our product offerings or our use of AI in certain jurisdictions to comply with new and evolving AI laws and regulations.

Data centers in geographies that we rely on may also be unavailable on commercially reasonable terms or at all.

Moreover, we do not control the operation of these third-party data centers, and they may suffer interruptions in service from events beyond our control, including from acts of government, natural events, power loss, break-ins or misconduct by those third parties.

In addition, we rely on third-party suppliers to provide equipment and components required to outfit these data centers on a timely basis.

Ongoing or future delays could cause the loss of additional sales, delay our revenue recognition or increase our costs, all of which could adversely affect the margins of our business.

Therefore, any flaws could affect our and our customers’

offerings often involves a long return on investment cycle.

With

In addition, we do not control channel participants, some of which operate in jurisdictions with high levels of corruption, and our compliance policies and procedures may fail to prevent or detect violations of anti-corruption or other laws for which we may be held responsible.

modification of which may be costly or disruptive to our business; and (3) unfavorable revenue recognition or other accounting treatment as a result of an acquired company’s business practices;

Our products and

practices or even prevent us from offering certain services in jurisdictions in which we operate.

For example, numerous jurisdictions, including the EU, are considering laws and regulations that would impose additional data privacy and other compliance requirements on the use of AI and could require us to adjust or limit our product offerings in such jurisdictions.

Even a favorable judgment

For example, in April 2024, the U.S. President signed into law a bill that will make it unlawful to provide internet hosting services to TikTok that are used to enable the distribution, maintenance, or updating of TikTok for users within the U.S. if certain steps are not taken by TikTok’s owners within a set time frame.

If we are unable to provide those services to TikTok, and if we cannot redeploy that capacity in a timely manner, our revenues and profits would be adversely impacted.

The healthcare industry is highly regulated, and thus, we are subject to several laws, regulations and industry initiatives, non-compliance with certain of which could adversely affect our healthcare business. As a participant in the healthcare industry, certain of our operations and relationships, and those of our customers, are regulated by several U.S. federal, state, local and foreign governmental entities.

The impact of these regulations on us is both direct and also indirect, in terms of government program requirements applicable to our customers for the use of health IT.

Even though we may not be directly regulated by specific healthcare laws and regulations, our products and services must be capable of being used by our customers in a way that complies with those laws and regulations.

There are significant, wide-ranging and rapidly evolving regulations both within and outside the U.S., such as regulations in the areas of healthcare fraud, information sharing, e-prescribing, claims processing and transmission, healthcare devices, the security and privacy of patient data and interoperability standards, that may be directly or indirectly applicable to our operations and relationships or the business practices of our customers.

Specific risks include, but are not limited to, the following:

The U.S. and other countries have regulations in place related to medical devices that now, or may in the future, apply to certain of our healthcare products and services.

If any of our healthcare products and services are deemed to be actively regulated medical devices by regulatory agencies in countries where we do business, we could be subject to extensive requirements governing pre- and post-marketing activities, including pre-market notification clearance.

Various U.S. federal, state and non-government agencies continue to generate requirements for the use of certified electronic health record technology (CEHRT), and CEHRT continues to be a requirement of participation in federal healthcare programs in order to receive reimbursement for health items and services provided by certain of our customers to Medicare and Medicaid beneficiaries.

We expect the regulations establishing the certification and interoperability standards for CEHRT will continue to be updated to emphasize interoperability, consumer engagement, patient safety and health information privacy and security.

Complying with these regulations globally is expensive and could subject us to unanticipated and significant delays.

If we fail to comply sufficiently with these and other regulations, it could negatively impact our ability to continue to develop, distribute and deliver certain of our healthcare products and services, and we could suffer fines or penalties.

In addition, an extended federal government shutdown in the U.S. could cause delays in approvals and decision making, which could negatively impact our results of operations.

The Nomination and Governance Committee of our Board of Directors oversees and periodically reviews our environmental, social and governance (ESG) programs, including environmental sustainability.

We typically have a number of large transactions each quarter, which increases

the risk of fluctuations in our quarterly results.

In addition, we hold a portfolio of publicly traded equity investments and privately held debt and equity investments, including investments in Ampere Computing Holdings LLC (Ampere), a privately held related party entity in which we had an ownership interest of approximately 29% as of May 31, 2024.

The amount of our investments in Ampere could increase in future periods for a variety of reasons, including due to the potential exercise of put options by our co-investors or call options by us.

If either of these options are exercised by us or our co-investors, we would acquire control of Ampere and its results would be consolidated with our results of operations.

Ampere has generated net losses in the past and we currently expect such entity to generate net losses in future periods that we may need to consolidate into our results of operations in future periods.

We have continued to refresh and release new offerings of our cloud products and services.

This includes third-party software products or services incorporated into our own.

could expose us to product liability, performance and warranty claims as well as significant harm to our brand and reputation, which could impact our future sales.

Changes to our prices and pricing policies could cause our revenues to decline or be delayed as our sales force implements and our customers adjust to the new pricing policies.

Some of our competitors may bundle products for promotional purposes or as a long-term pricing strategy, commit to large customer deployments at prices that are unprofitable, or provide guarantees of prices and product implementations.

These practices could, over time, significantly constrain the prices that we can charge for certain of our products.

The increase in open source software distribution may also cause us to change our pricing models.

our ability to sell and renew our applications and infrastructure offerings to existing and prospective customers, and our business, operating results, and financial position.

We recently updated our on-site attendance expectations, which may vary by line of business and location.

A transition away from our hybrid work model to on-site work requirements could result in employee dissatisfaction and attrition, and could also lead to increased employee burnout or negatively impact employee productivity.

Many of our employees will continue to work from home some or all of the time.

While we believe this has helped us engage with a wider pool of talent and may help to retain employees who want or need more flexibility, it may fail

to yield these desired benefits and it may present cybersecurity risks and additional risks for our real estate portfolio and strategy.

Despite our efforts to reopen our offices in a safe manner, our employees who have opted to return to the office may nevertheless be exposed to health risks, which may expose us to potential liability.

an acquisition may not further our business strategy as we expected, we may not integrate an acquired company or technology as successfully as we expected, we may impose our business practices or alter

we may experience additional or unexpected changes in how we are required to account for our acquisitions pursuant to U.S. generally accepted accounting principles, including arrangements that we may assume in an acquisition.

If we or our customers are unable to operate our respective businesses as a result of the COVID-19 pandemic (or any resurgence of the pandemic), our future results of operations could be harmed. The COVID-19 pandemic and efforts to control its spread have affected, and any spread or resurgence of COVID-19 variants may in the future affect, how we and our customers, partners and suppliers operate our businesses.

Our operations have been and may in the future be negatively affected by a range of external factors related to the COVID-19 pandemic that are not within our control, including preventative measures and other related governmental measures.

If we are not able to respond to and manage future impacts of the COVID-19 pandemic effectively, our business will be harmed.

In addition, the long-term impact of the COVID-19 pandemic on the broader global economy and related impacts on our business and our customers’ business operations remains uncertain and cannot be predicted.

Additional impacts and risks that we are not currently aware of may arise, and the COVID-19 pandemic may also heighten other risks described in this Risk Factors section.

Although we believe that our income and non-income based

On December 12, 2022, the European Union member states agreed to implement the OECD’s global corporate minimum tax rate of 15%.

Other countries are also actively considering changes to their tax laws to adopt certain parts of the OECD’s two-pillar framework.

For example, in March 2022, following Russia’s invasion of Ukraine and the imposition of economic sanctions and export controls targeting Russia by the U.S., EU and other countries, we withdrew our operations from the Russian Federation and the Republic of Belarus.

products and services, directly or indirectly, to the DoD and other federal and state government entities that implement similar cybersecurity requirements.

For example, in the U.S., the SEC has proposed rules requiring, among other things, disclosure of public companies’ climate-related strategies, costs,

impacts and targets.

In addition, we hold a portfolio of publicly traded and privately held equity investments.

Changes in the fair values of these investments are also subject to the general conditions of public and private equity markets, which are uncertain and have in the past varied, and may in the future vary, materially by period.

For example, we will experience

In addition, the Inflation Reduction Act, signed into law on August 16, 2022, imposes an excise tax of 1% (potentially increasing to 4% under certain U.S. tax proposals) on certain corporate stock repurchases.

This overview is followed by a summary of our critical accounting [removed: policies and] estimates that we believe are important to understanding [removed: the] [added: significant] assumptions and judgments incorporated in our reported financial results.

We then provide a more detailed analysis of our results of operations and financial condition for fiscal [removed: 2023] [added: 2024] compared to fiscal [removed: 2022.][added: 2023.]

A discussion regarding our financial condition and results of operations for fiscal [removed: 2022] [added: 2023] compared to fiscal [removed: 2021] [added: 2022] can be found in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended May 31, [removed: 2022,] [added: 2023,] as filed with the SEC on June [removed: 21, 2022,] [added: 20, 2023,] which is available free of charge on the SEC’s website at www.sec.gov and on our Investor Relations website at www.oracle.com/investor.

Oracle provides products and services that address enterprise [removed: information technology (IT) environments.][added: IT needs.]

The descriptions set forth below as a part of this Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations and the information contained within Item 1 Business and Note 14 of Notes to Consolidated Financial Statements included elsewhere in this Annual Report provide additional information related to our businesses and operating segments and align to how our chief operating decision makers (CODMs), which [removed: include] [added: are] our Chief Executive Officer and Chief Technology Officer, view our operating results and allocate resources.

Our cloud and license business, which represented [removed: 83%] [added: 84%] and [removed: 85%] [added: 83%] of our total revenues in fiscal [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] respectively, markets, sells and delivers a broad spectrum of enterprise applications and infrastructure technologies through our cloud and license offerings.

license support revenues, which are earned by providing Oracle license support services to customers that have elected to purchase support services in connection with the purchase of Oracle applications and infrastructure [added: software] licenses for use in cloud, on-premise and other IT environments.

License support contracts are generally priced as a percentage of the net fees paid by the customer to purchase a cloud license and/or on-premise license; are generally billed in advance of the support services being performed; are generally renewed at the customer’s option; and are generally recognized as revenues ratably over the contractual period that the support services are provided, which is generally one [removed: year; and][added: year.]

Oracle Cloud Services arrangements [added: generally:] are [removed: generally] billed in advance of the cloud services being [removed: performed; generally] [added: delivered;] have durations of one to [removed: three] [added: four] years; are [removed: generally] renewed at the customer’s option; and are [removed: generally][added: recognized as revenues ratably over the contractual period of the cloud contract or, in the case of usage model contracts, as the cloud services are consumed over time; and]

[added: Revenues for our cloud services are generally] recognized [removed: as revenues] ratably over the contractual [removed: period of the cloud contract or,] [added: term, which is generally one to four years, or] in the case of usage model contracts, as the cloud services are [removed: consumed over time.][added: consumed.]

The timing of a few large license transactions can substantially affect our quarterly license revenues due to the point-in-time nature of revenue recognition for license transactions, which is different than the typical revenue recognition pattern for our cloud services and license support revenues in which revenues are [removed: generally] recognized [removed: ratably] over [removed: the contractual terms.][added: time.]

To address customer demand and enable customer choice, we have [removed: introduced] certain programs for customers to pivot their applications and infrastructure [added: software] licenses and the related license support to the Oracle Cloud for new deployments and to migrate to and expand with the Oracle Cloud for their existing workloads.

Cloud services revenues represented [removed: 32%, 25%] [added: 37%, 32%] and [removed: 22%] [added: 25%] of our total revenues during fiscal [removed: 2023, 2022] [added: 2024, 2023] and [removed: 2021,] [added: 2022,] respectively.

expected growth in our cloud services [removed: and license support] offerings; and

continued demand for our cloud license and on-premise license [added: and license support] offerings.

The historical upward trend of our cloud and license business’ revenues over the course of the four quarters within a particular fiscal year is primarily due to the addition of new cloud services and license support contracts to the customer contract base that we generally recognize as revenues ratably or based upon customer usage over the respective contractual terms and the renewal of existing customers’ cloud services and license support contracts over the course of each fiscal year that we generally recognize as revenues in a similar manner; and the historical [added: upward trend of our cloud license and on-premise license revenues, which we generally recognize at a point in time upon delivery; in each case over those four fiscal quarterly periods.]

Our hardware business, which represented 6% [removed: and 7%] of our total revenues in [added: each of] fiscal [removed: 2023] [added: 2024] and [removed: 2022, respectively,] [added: 2023,] provides a broad selection of enterprise hardware products and hardware-related software products including Oracle Engineered Systems, servers, storage, industry-specific hardware offerings, operating systems, virtualization, management and other hardware-related [removed: software,] [added: software] and related hardware support.

We expect to [added: continue to] make investments in research and development to improve existing hardware products and services and to develop new hardware products and services.

Our hardware revenues, cost of hardware and hardware operating margins that we report are affected by many factors, including our manufacturing partners’ abilities to timely manufacture or deliver a few large hardware [removed: transactions, with this factor becoming more pronounced in recent periods due to global supply chain constraints for certain technology components;] [added: transactions;] our strategy for and the position of our hardware products relative to competitor offerings; customer demand for competing offerings, including cloud infrastructure offerings; the strength of general economic and business conditions; governmental budgetary constraints; whether customers decide to purchase hardware support contracts at or in close proximity to the time of hardware product sale; the percentage of our hardware support contract customer base that renews its support contracts; and the close association between hardware products, which have a finite life, and customer demand for related hardware support as hardware products age; customer decisions to either maintain or upgrade their existing hardware infrastructure to newly developed technologies that are available; and foreign currency rate fluctuations.

Our services business, which represented [removed: 11%] [added: 10%] and [removed: 8%] [added: 11%] of our total revenues in fiscal [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] respectively, helps customers and partners maximize the performance of their investments in Oracle applications and infrastructure technologies.

We acquired certain companies and technologies during fiscal [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] including Cerner in fiscal 2023.

[removed: As compelling] opportunities become available, we may acquire companies, products, services and technologies in furtherance of our corporate strategy.

Critical Accounting [removed: Policies and] Estimates

[removed: Accounting for Income Taxes; and][added: Income Taxes]

Refer to Note 1 of Notes to Consolidated Financial Statements included elsewhere in this Annual Report for more discussion of our [removed: critical and other] [added: significant] accounting policies.

[removed: While] [added: In accordance with the provisions of Accounting Standards Codification (ASC) 805, *Business Combinations*,] we use our best estimates and [removed: assumptions] [added: assumptions, which are inherently uncertain and subject] to [removed: accurately value] [added: refinement, to recognize and measure] assets acquired and liabilities [removed: assumed] [added: assumed, including intangible assets and pre-acquisition contingencies,] at the acquisition date as well as any contingent consideration, where [removed: applicable, our estimates are inherently uncertain and subject to refinement.][added: applicable.]

[added: Subsequent] to the measurement period or final determination of the net asset values for the business combination, whichever comes first, changes in our estimates of such contingencies will affect earnings and could have a material effect on our results of operations and financial position.

We consider future growth, forecasted earnings, future taxable income, the mix of earnings in the jurisdictions in which we operate, historical earnings, taxable income in prior years, if carryback is permitted under the law, and prudent and feasible tax planning strategies in determining [added: the need for a valuation allowance.]

Adjustments based on filed returns are generally recorded in the period when the [removed: tax returns are filed and the] global tax implications are known, which can materially impact our effective tax rate.

[removed: Such revisions in the estimates of the potential liabilities] [added: We may incur future losses due to impairments, which] could have a material impact on our results of operations and financial position.

Refer to “Supplemental Disclosure Related to Certain Charges” below for additional discussion of certain of these items and Note 14 of Notes to Consolidated Financial Statements included elsewhere in this Annual Report for a reconciliation of the summations of total segment margin as presented in the discussion below to total income before income taxes as presented per our consolidated statements of operations for fiscal [removed: 2023] [added: 2024] and [removed: 2022.][added: 2023.]

Our international operations have [removed: provided] [added: provided,] and are expected to continue to [removed: provide] [added: provide,] a significant portion of each of our businesses’ revenues and expenses.

In order to provide a framework for assessing how our underlying businesses performed, excluding the effects of foreign currency rate fluctuations, we compare the percent change in the results from one period to another period in this Annual Report using constant [removed: currency disclosure.][added: currency.]

To present this information, current and comparative prior period results for entities reporting in currencies other than U.S. Dollars are converted into U.S. Dollars at constant exchange rates (i.e., the rates in effect on May 31, [removed: 2022,] [added: 2023,] which was the last day of our prior fiscal year) rather than the actual exchange rates in effect during the respective periods.

For example, if an entity reporting in Euros had revenues of 1.0 million Euros from products sold on May 31, [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] our financial statements would reflect reported revenues of [removed: $1.08] [added: $1.09] million in fiscal [removed: 2023] [added: 2024] (using [removed: 1.08] [added: 1.09] as the [removed: month-end] [added: applicable] average exchange rate for the period) and [removed: $1.07] [added: $1.08] million in fiscal [removed: 2022] [added: 2023] (using [removed: 1.07] [added: 1.08] as the [removed: month-end] [added: applicable] average exchange rate for the period).

The constant currency presentation, however, would translate the fiscal [removed: 2023] [added: 2024] results using the fiscal [removed: 2022] [added: 2023] exchange rate and indicate, in this example, no change in revenues [removed: during] [added: between] the [removed: period.][added: periods compared.]

| | | [added: |] Year Ended May 31, | | | | | | | [removed: | | | |]

| | | | | | | Percent Change | | | | | | | [added: |]

| (Dollars in millions) | | [removed: 2023] [added: 2024] | | | | Actual | | Constant | | [removed: 2022] [added: 2023] | | |

| Americas | | $ | [removed: 31,226] [added: 33,122] | | | [removed: 32%] [added: 6%] | | [removed: 32%] [added: 6%] | | $ | [removed: 23,679] [added: 31,226] | |

As compelling

Investment in Ampere Computing Holdings LLC

From time to time since 2017, we have made investments in Ampere, a related party entity, in the form of equity and convertible debt instruments.

The total carrying value of our investments in Ampere, after accounting for losses under the equity method of accounting, was $1.5 billion and $1.2 billion as of May 31, 2024 and 2023, respectively.

We currently expect Ampere to continue to generate net losses in future periods but we remain confident in the long-term potential of Ampere’s server chips.

Our equity investments in Ampere represent an ownership interest of approximately 29% as of May 31, 2024 and 2023.

We also own convertible debt investments in Ampere which, under the terms of an agreement with Ampere and other co-investors, will mature in June 2026 and are convertible into equity securities at the holder’s option under certain circumstances.

During the fiscal year ended May 31, 2024, we invested an aggregate of $600 million in convertible debt instruments issued by Ampere.

In accordance with the terms of an agreement with other co-investors, we are also a counterparty to certain put (exercisable by a co-investor) and call (exercisable by Oracle) options at prices of approximately $400 million to $1.5 billion, respectively, to acquire additional equity interests in Ampere from our co-investors through January 2027.

If either of such options is exercised by us or our co-investors, we would obtain control of Ampere and consolidate its results with our results of operations.

Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires us to make certain estimates, judgments and assumptions that can affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure.

Critical accounting estimates are those estimates that involve a significant level of estimation uncertainty and have had, or are reasonably likely to have, a material impact on our financial condition or results of operations.

We have critical accounting estimates in the areas of business combinations, income taxes and non-marketable investments.

Non-Marketable Investments

We assess our non-marketable debt and equity investments for credit losses and impairment on a quarterly basis and as facts and circumstances change.

Our analysis includes an assessment of various qualitative and quantitative factors, including the investee’s historical financial results, current financial projections, rate of cash usage and assumptions regarding product acceptance and opportunity within the market.

This analysis requires significant judgment in evaluating underlying factors.

In some instances, investee specific information available to us to make this assessment may be limited or may be available on a delayed basis.

If the investment is determined to be impaired, we adjust the carrying amount of such investment to its estimated fair value by recognizing a charge, which is included in non-operating expenses, net in our consolidated statements of operations.

Estimating the fair value of an investment upon impairment involves a significant level of estimation, uncertainty and judgment.

| EMEA | | 25% | | | | | | | | 24% | | |

| Services | | | 5,431 | | | \-3% | | \-3% | | | 5,594 | |

Excluding the effects of foreign currency rate fluctuations, our total revenues increased in fiscal 2024 relative to fiscal 2023 due to growth in our cloud and license business’ revenues, which were partially offset by a decline in our hardware business’ and services business’ revenues.

In our hardware business, the constant currency decrease in revenues in fiscal 2024 was due to the emphasis we placed on the marketing and sale of our growing cloud-based infrastructure technologies and strategic hardware offerings and the de-emphasis of our sales and marketing efforts

for non-strategic hardware products and related support services.

These constant currency increases in operating expenses were partially offset by lower sales and marketing expenses, which were primarily due to lower employee related expenses; lower hardware expenses; lower expenses for amortization of intangible assets as certain of our assets were fully amortized; lower general and administrative expenses; and lower restructuring expenses.

| | | $ | 5,243 | | | $ | 5,673 | |

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| | Fiscal 2029 | | | 561 | |

| | Thereafter | | | 1,080 | |

Restructuring expenses in fiscal 2024 primarily related to employee severance in connection with the Fiscal 2024 Oracle Restructuring Plan (2024 Restructuring Plan).

| | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | 2024 | | | | 2023 | | |

| | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| (Dollars in millions) | | 2024 | | | | Actual | | Constant | | 2023 | | | |

| Americas | | $ | 28,196 | | | 9% | | 9% | | $ | 25,821 | | |

| Cloud services | | $ | 19,774 | | | 25% | | 24% | | $ | 15,881 | | |

[Index to Financial Statements](#item_15_exhibits_financial_statement_sch)

upward trend of our cloud license and on-premise license revenues, which we generally recognize at a point in time upon delivery; in each case over those four fiscal quarterly periods.

Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP) as set forth in the Financial Accounting Standards Board’s Accounting Standards Codification (ASC), and we consider various staff accounting bulletins and other applicable guidance issued by the SEC.

GAAP, as set forth within the ASC, requires us to make certain estimates, judgments and assumptions.

These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented.

The accounting policies that reflect our more significant estimates, judgments and assumptions and which we believe are the most critical to aid in fully understanding and evaluating our reported financial results include:

Revenue Recognition;

Business Combinations;

Goodwill and Intangible Assets—Impairment Assessments;

Legal and Other Contingencies.

Our senior management has reviewed our critical accounting policies and related disclosures with the Finance and Audit Committee of the Board of Directors.

There were no significant changes to our critical accounting policies and estimates from the prior year.

Revenue Recognition

The most critical judgments required in applying ASC 606, *Revenue Recognition from Customers*, and our revenue recognition policy relate to the determination of distinct performance obligations and the evaluation of the standalone selling price (SSP) for each performance obligation.

Many of our customer contracts include multiple performance obligations.

Judgment is required in determining whether each performance obligation within a customer contract is distinct.

Oracle products and services generally function on a standalone basis and do not require a significant amount of integration or interdependency.

Therefore, multiple products and services contained within a customer contract are generally considered to be distinct and are not combined for revenue recognition purposes.

We allocate the transaction price for each customer contract to each performance obligation based on the relative SSP (the determination of SSP is discussed below) for each

performance obligation within each contract.

We recognize the amount of transaction price allocated to each performance obligation within a customer contract as revenue as each performance obligation is satisfied.

We use historical sales transaction data and judgment, among other factors, in determining the SSP for products and services.

For substantially all performance obligations except cloud licenses and on-premise licenses, we are able to establish the SSP based on the observable prices of products or services sold separately in comparable circumstances to similar customers.

We typically establish an SSP range for our products and services, which is reassessed on a periodic basis or when facts and circumstances change.

SSP for our products and services can evolve over time due to changes in our pricing practices that are influenced by intense competition, changes in demand for our products and services, and economic factors, among others.

Our cloud licenses and on-premise licenses have not historically been sold on a standalone basis, as substantially all customers elect to purchase license support contracts at the time of a license purchase.

License support contracts are generally priced as a percentage of the net fees paid by the customer to purchase the license.

We are unable to establish the SSP for our cloud licenses and on-premise licenses based on observable prices given the same products are sold for a broad range of amounts (that is, the selling price is highly variable) and a representative SSP is not discernible from past transactions or other observable evidence.

As a result, the SSP for a cloud license and an on-premise license included in a contract with multiple performance obligations is generally determined by applying a residual approach whereby all other performance obligations within a contract are first allocated a portion of the transaction price based upon their respective SSPs, with any residual amount of transaction price allocated to cloud license and on-premise license revenues.

We apply the provisions of ASC 805, *Business Combinations* (ASC 805), in accounting for our acquisitions.

ASC 805 requires that we evaluate whether a transaction pertains to an acquisition of assets, or to an acquisition of a business.

A business is defined as an integrated set of assets and activities that is capable of being conducted and managed for the purpose of providing a return to investors.

Asset acquisitions are accounted for by allocating the cost of the acquisition to the individual assets and liabilities assumed on a relative fair value basis; whereas the acquisition of a business requires us to recognize separately from goodwill the assets acquired and the liabilities assumed at the acquisition date fair values.

Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed.

Accounting for business combinations requires our management to make significant estimates and assumptions, especially at the acquisition date, including our estimates for intangible assets, pre-acquisition contingencies and any contingent consideration, where applicable.

Subsequent

Goodwill and Intangible Assets—Impairment Assessments

We review goodwill for impairment annually and whenever events or changes in circumstances indicate its carrying value may not be recoverable.

We make certain judgments and assumptions to determine our reporting units and in allocating shared assets and liabilities to determine the carrying values for each of our reporting units.

Judgment in the assessment of qualitative factors of impairment include cost factors; financial performance; legal, regulatory, contractual, political, business, and other factors; entity specific factors; industry and market considerations, macroeconomic conditions, and other relevant events and factors affecting the reporting unit.

[removed: Marketable and Non-Marketable] [added: Non-Marketable] Equity [added: and Convertible Debt] Investments

Our [removed: marketable and] non-marketable equity [removed: securities] [added: and convertible debt] investments totaled [removed: $972 million] [added: $2.0 billion] and [removed: $1.1] [added: $1.6] billion as of May 31, [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] respectively.

[removed: Our non-marketable equity securities investments in private companies not accounted for] under the equity method are adjusted to fair value for observable transactions for identical or similar investments of the same issuer or for impairment.

Our non-marketable equity [removed: securities] investments accounted for under the equity method, [added: and convertible debt investments in privately owned companies,] primarily in a related party entity, generally do not fluctuate based on market price changes.

However, these [removed: equity method] investments could be impaired if the carrying value exceeds the fair value and is not expected to recover.

The timing and amounts of changes in fair [removed: value] [added: values] of our [removed: marketable and] non-marketable equity investments [removed: depends] [added: depend] on factors beyond our control, including the perceived and actual performance of the companies in which we invest.

Our principal currency exposures include the Australian Dollar, Brazilian Real, Euro, [added: Indian Rupee,] Japanese Yen and Saudi Riyal.

We have established a program that primarily utilizes foreign currency forward contracts to [added: partially] offset the risks that arise from the aforementioned transactions.

Realized gains or losses with respect to our foreign currency exposures, net of gains or losses from our foreign currency forward contracts, [removed: and also] [added: including] costs incurred to enter into these foreign currency forward [removed: contracts] [added: contracts,] are included in non-operating expenses or income, net in our consolidated financial statements.

The following table sets forth the hypothetical potential losses that we consider to be the most material to the reported fair values and/or future earnings of our [removed: equity investments and] foreign currency influenced holdings, prior to any income tax effects, resulting from hypothetical changes in relevant market rates as of or for the reporting periods below:

| (in millions) | | Hypothetical Change | | Impact | | [removed: 2023] [added: 2024] | | | | [removed: 2022] [added: 2023] | | |

| Total revenues | | 10% decrease in foreign exchange rates | | Earnings | | $ | [removed: (2,037] [added: (2,259] | ) | | $ | [removed: (2,107] [added: (2,037] | ) |

| Cash, cash equivalents and trade receivables, net | | 10% decrease in foreign exchange rates | | Fair values | | $ | [removed: (1,407] [added: (1,592] | ) | | $ | [removed: (1,131] [added: (1,407] | ) |

Our non-marketable equity investments in privately owned companies not accounted for

For additional details on our non-marketable investments, see Note 1 of Notes to Consolidated Financial Statements included elsewhere in this Annual Report.

[Index to Financial Statements](#item_15_exhibits_financial_statement_sch)

Our marketable equity securities investments in publicly traded companies are recorded at fair value, which is subject to market price volatility.

Our non-marketable convertible debt investments would be subject to equity price risk in the future when the convertible option is exercised.

| Equity price risk: | | | | | | | | | | | | |

| Marketable and non-marketable equity investments | | 25% decrease in market price and fair values | | Earnings | | $ | (243 | ) | | $ | (277 | ) |

Oracle provides products and services that address enterprise information technology (IT) [removed: environments.][added: needs.]

Our customers include businesses of many sizes, government agencies, educational institutions and resellers that we market and sell to directly through our worldwide sales force [removed: and] [added: or] indirectly through the Oracle Partner Network.

Using Oracle technologies, our customers build, deploy, run, manage and support their internal and external products, services and business operations, including, for example, [removed: a global cloud applications developer] [added: an artificial intelligence (AI) product company] that [removed: utilizes] [added: uses] Oracle Cloud Infrastructure (OCI) to [added: build and serve generative AI models; a global technology company that uses OCI to] power its [removed: software-as-a-service (SaaS)] [added: logistics and mobile application] offerings; a [removed: multi-national] [added: multinational] financial institution that runs its banking applications using Oracle Exadata Cloud@Customer; and a global consumer products company that leverages Oracle Fusion Cloud Enterprise Resource Planning [added: (ERP)] for its accounting processes, risk management, supply chain and financial planning functions.

Oracle SaaS and OCI (collectively Oracle Cloud Services) offerings provide comprehensive and integrated applications and infrastructure services [removed: delivered via various cloud delivery models] enabling our customers to choose the best option that meets their specific business needs.

Oracle Cloud Services integrate the IT components, including software, hardware and services, [removed: on a customer’s behalf] in a cloud-based IT environment that Oracle deploys, manages, supports and upgrades for [removed: the customer] [added: customers] and that [removed: a customer] [added: customers] may access utilizing common web browsers via a broad spectrum of devices.

In fiscal [removed: 2023, 2022] [added: 2024, 2023] and [removed: 2021,] [added: 2022,] we invested [removed: $8.6] [added: $8.9] billion, [removed: $7.2] [added: $8.6] billion and [removed: $6.5] [added: $7.2] billion, respectively, in research and development to enhance our existing portfolio of offerings and to develop new technologies and services.

[removed: We have a deep understanding as to how applications and infrastructure technologies] interact and function with one another, including through the use of OCI to power our Oracle [removed: Fusion] [added: Cloud] SaaS [removed: Applications,] [added: applications,] which we and our customers use to run internal business processes.

[removed: We focus our] development [removed: efforts][added: of our products.]

[added: We focus our development efforts] on improving the performance, security, reliability, operation, integration and cost-effectiveness of our offerings relative to our competitors; facilitating the ease with which organizations are able to deploy, use, manage and maintain our offerings; and incorporating emerging technologies [added: such as AI] within our offerings to enable leaner business processes, automation and innovation.

For example, [removed: the] [added: our] Oracle Autonomous Database is designed to deliver transformational infrastructure as an OCI offering that uses machine learning capabilities to automate many traditionally manual functions.

We have invested billions of dollars over time to acquire a number of companies, products, services and technologies that add to, are complementary to, or have otherwise enhanced our existing [removed: offerings, including our acquisition of Cerner Corporation (Cerner) in June 2022 (see Note 2 of Notes to Consolidated Financial Statements included elsewhere in this Annual Report for additional information).][added: offerings.]

Oracle applications and infrastructure offerings are marketed and sold through our cloud and license and hardware [removed: businesses] [added: businesses,] and are delivered through the Oracle Cloud or through other IT deployment models, including cloud-based, hybrid and on-premise deployments.

In recent periods, customer demand for our applications and infrastructure technologies delivered through our Oracle Cloud [removed: Services] deployment models has increased.

To address customer demand and enable customer choice, [added: we have]

[removed: we have] introduced certain programs for customers to pivot their applications and infrastructure licenses and license support contracts to the Oracle Cloud for new deployments and to migrate to and expand with the Oracle Cloud for their existing workloads.

The proportion of our cloud services revenues relative to our total revenues has increased and our cloud services revenues represented [removed: 32%, 25%] [added: 37%, 32%] and [removed: 22%] [added: 25%] of our total revenues during fiscal [removed: 2023, 2022] [added: 2024, 2023] and [removed: 2021,] [added: 2022,] respectively.

Our applications cloud services and license support revenues represented [removed: 47%, 42%] [added: 46%, 47%] and [removed: 41%] [added: 42%] of our total cloud services and license support revenues during fiscal [removed: 2023, 2022] [added: 2024, 2023] and [removed: 2021,] [added: 2022,] respectively.

We also offer industry-specific applications, which provide solutions to customers in the automotive, communications, construction and engineering, consumer [added: packaged] goods, energy and water, financial services, food and beverage, government and education, healthcare, high technology, hospitality, industrial manufacturing, life sciences, media and entertainment, oil and gas, professional services, [added: public safety,] retail, travel and transportation and wholesale distribution industries, among others.

Our SaaS offerings represent an industry leading business innovation [removed: platform,] [added: platform] leveraging [removed: Oracle’s Next-Generation Cloud Infrastructure,] [added: OCI] and include a broad suite of modular, next-generation cloud software applications spanning all core business functions, including, among others:

Oracle Fusion Cloud [removed: Enterprise Resource Planning (ERP),] [added: ERP,] which is designed to be a [removed: complete, global] [added: complete] and integrated ERP solution to help organizations improve decision making and workforce productivity, and to optimize back-office operations by utilizing a single data and security model with a common user interface;

Oracle Fusion Cloud Supply Chain and Manufacturing Management (SCM), which is designed to help organizations create, optimize and digitize their supply [removed: chains and innovate products quickly;][added: chains;]

Oracle Fusion Cloud Human Capital Management (HCM), which is designed to help organizations find, develop and retain their talent, enable collaboration, provide [removed: complete] workforce insights, improve business process efficiency and enable users to connect to an integrated suite of HCM applications from [removed: any device;][added: a broad range of devices;]

NetSuite Applications Suite, which is [added: generally marketed to small to medium-sized organizations and is] designed to be a unified, cloud-based applications suite to run a company’s entire business and includes financials and ERP, customer relationship management, human resources, professional services and commerce, among [removed: others.][added: others; and]

Oracle Cerner [removed: healthcare,] [added: healthcare applications,] which [removed: is] [added: are] designed to enable medical professionals to deliver better healthcare to individual patients and [removed: communities; and][added: communities.]

We believe Oracle Fusion Cloud ERP is a strategic suite of applications that is foundational to facilitating and extracting more business value out of the adoption of other Oracle [added: Cloud] SaaS offerings, such as Oracle Fusion Cloud HCM and Oracle Fusion Cloud EPM, as customers realize the value of a common data model that spans across core business applications.

We believe our SaaS offerings [added: together] remove business boundaries between front- and back-office activities.

Our SaaS offerings are designed to deliver a secure data isolation architecture and flexible upgrades; self-service access controls for users; a Service-Oriented Architecture; built-in social, mobile and business insight capabilities (analytics); and a high performance, high availability infrastructure based on [removed: Oracle’s Next-Generation Cloud Infrastructure.][added: OCI.]

Our SaaS offerings are also designed to natively incorporate advanced technologies such as [added: AI,] Internet-of-Things (IoT), [removed: artificial intelligence (AI),] machine learning, blockchain, digital assistants and advances in the “human interface” and how users interact with Oracle Cloud SaaS offerings within a business context or to augment human capabilities to enhance productivity.

Substantially all license support customers renew their support contracts with us upon expiration in order to continue to benefit from technical support services and the periodic issuance of unspecified updates and [added: enhancements, which current license support customers are entitled to receive.]

[removed: Our license support contracts are] generally priced as a percentage of the net fees paid by the customer to purchase the license, are typically one year in duration and are generally billed to the customer annually in advance.

Our OCI offerings also include cloud-based compute, storage and networking capabilities, application development and cloud native services, among others, and new and innovative services such as [removed: Oracle Autonomous Database (described further below), MySQL HeatWave,] AI Infrastructure offerings and emerging technologies such as [removed: IoT, digital assistant] [added: generative AI, IoT] and blockchain.

Our hardware business’ infrastructure technologies consist of hardware products and certain unique hardware-related software [removed: offerings and include] [added: offerings, including] Oracle Engineered Systems, enterprise servers, storage solutions, industry-specific hardware, virtualization software, operating systems, management software and related hardware [removed: services, including hardware] support [removed: at the customer’s option.][added: services.]

Our infrastructure cloud services and license support revenues represented [removed: 53%, 58%] [added: 54%, 53%] and [removed: 59%] [added: 58%] of our total cloud services and license support revenues during fiscal [removed: 2023, 2022] [added: 2024, 2023] and [removed: 2021,] [added: 2022,] respectively.

[added: OCI is designed to be differentiated from other cloud] vendors to provide better security by separating cloud control code computers from customer compute nodes.

[removed: Customers use OCI to build and operate new applications ranging from low-code to AI powered cloud-native] applications, to run new workloads and to move their existing Oracle or non-Oracle workloads to the Oracle Cloud from their on-premise data centers or other cloud-based IT environments, among other uses.

OCI AI [removed: services] [added: offerings] are designed to be embedded into customer applications for a variety of predictive use cases, including, among others, the servicing of machine parts that are at risk of failing, [added: using generative AI for fault detection on an assembly line,] the stocking of retailer store shelves, credit fraud detection and [removed: the] financial modeling to stay within a business’ forecasts.

In addition to the full suite of OCI offerings delivered by [removed: dozens of] Oracle public cloud regions across the [removed: globe,] [added: globe and by our multicloud partnerships,] we provide our customers with flexibility by offering certain OCI services within a customer’s own data [removed: center to address customer latency requirements and address restrictions imposed upon customers that operate in certain regulated industries, entities or jurisdictions with our Dedicated Region and Sovereign cloud offerings.][added: center, such as:]

Oracle Exadata [removed: Cloud@Customer] [added: Cloud@Customer, which] is designed to enable customers to run Oracle Autonomous Database and Oracle Database securely in their own data centers behind their firewalls while having the services managed by [removed: Oracle.][added: Oracle;]

OCI Dedicated [removed: Region] [added: Region, which] is designed to enable customers to bring a self-contained OCI instance into their data centers while accessing a substantial portfolio of OCI and Oracle [added: Cloud] SaaS [removed: offerings.][added: offerings;]

Oracle [removed: Alloy] [added: Alloy, which] is engineered to enable partners to control the commercial and customer experience to address their specific market needs for cloud [removed: services.][added: services; and]

We have a deep understanding as to how applications and infrastructure technologies

Our license support contracts are

Customers use OCI to build and operate new applications ranging from low-code to AI powered cloud-native

OCI Sovereign Cloud, which is designed to enable customers to utilize OCI services while addressing customer latency requirements and addressing restrictions imposed upon customers that operate in certain regulated industries, entities or jurisdictions.

This capability now also allows us to offer sovereign AI to customers who want the latest in AI innovations while operating within their regulatory environments;

Oracle MySQL HeatWave

Oracle MySQL HeatWave combines transactions, real-time analytics, machine learning and generative AI in one managed cloud service.

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

We believe that C&I powers innovation.

By promoting an inclusive culture that values acceptance and belonging and provides opportunities for all, we seek to enable and inspire our workforce to help our customers solve hard problems.

Data and Talent Analytics: leveraging data, global insights, programs and systems that drive inclusive experiences;

Multi-Generation: ensuring intentional and unbiased investment in talent;

Culture: increasing a sense of belonging and acceptance that will attract talent from many backgrounds and inspire retention;

Engagement: championing a growth mindset both globally and locally by leveraging an inclusive range of perspectives and voices; and

Inclusive Hiring: expanding our inclusive hiring practices to promote equitable representation across the globe.

We believe that Oracle Learning enables us to improve our employees’ learning experience and better measure learning consumption.

Our employees take advantage of instructor-led classes, virtual library content and online learning resources on sales, business, products, market/industry, leadership, technical skills and compliance, as well as well-being and personal development related topics.

Through our nonprofit organization, Oracle Health Foundation, we deliver pediatric grants and school-based wellness programs to create healthier tomorrows and stronger communities.

He has

[Index to Financial Statements](#item_15_exhibits_financial_statement_sch)

Our NetSuite applications are generally marketed to small to medium-sized organizations;

Oracle Advertising, which is designed to enable organizations to leverage their own data and consumer data to inform and measure marketing strategies and programs.

enhancements, which current license support customers are entitled to receive.

OCI is designed to be differentiated from other cloud

enterprises to manage the end-to-end lifecycle of user identities across all enterprise resources.

| | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

We believe that D&I powers innovation and that the diversity of our workforce is critical to helping our customers solve difficult problems.

driving insight and accountability with data;

recruiting with an intention on diversity;

embedding inclusion into talent development;

inspiring an inclusive culture through community; and

investing in the future diversity of our industry.

by the Human Rights Campaign; a 2023 5-Star Employer by VETS Indexes; and a 2023 Top Supporter of Historically Black College and University Engineering Schools by Career Communications Group.

Our employees take advantage of online classes and learning resources on business, leadership and technical skills, as well as webinars and learning opportunities that are designed to support employee and family well-being.

During fiscal 2023, through employee donations and Oracle’s matching contributions, we raised more than $1 million for disaster relief and recovery in response to earthquakes in Turkey, hurricanes in the United States and other natural disasters.

He currently serves as a director of Tesla, Inc.

She also serves on the U.S. Homeland Security Advisory Council.

Corporate Architect from January 2003 to November 2006.

The material set forth in Note 13 (pertaining to information regarding contingencies related to our income taxes) and Note 16 (pertaining to information regarding legal contingencies) of Notes to Consolidated Financial Statements in Item 15 of this Annual Report [removed: on Form 10-K] is incorporated herein by reference.

For the fiscal year ended May 31, [removed: 2023][added: 2024]

The aggregate market value of the voting stock held by non-affiliates of the registrant was [removed: $129,615,142,000] [added: $186,225,386,000] based on the number of shares held by non-affiliates of the registrant as of May 31, [removed: 2023,] [added: 2024,] and based on the closing sale price of common stock as reported by the New York Stock Exchange on November 30, [removed: 2022,] [added: 2023,] which is the last business day of the registrant’s most recently completed second fiscal quarter.

Number of shares of common stock outstanding as of June [removed: 12, 2023: 2,714,259,000.][added: 13, 2024: 2,755,860,000.]

Portions of the registrant's definitive proxy statement relating to its [removed: 2023] [added: 2024] annual meeting of stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated.

Such proxy statement will be filed with the U.S. Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended May 31, [removed: 2023.][added: 2024.]

FISCAL YEAR [removed: 2023][added: 2024]

| Item 1. | | [Business](#item_1_business) | | [removed: 3] [added: 4] |

| Item 1A. | | [Risk Factors](#item_1a_risk_factors) | | [removed: 17] [added: 19] |

| Item 1B. | | [Unresolved Staff Comments](#item_1b_unresolved_staff_comments) | | [removed: 31] [added: 33] |

| Item 2. | | [Properties](#item_2_properties) | | [removed: 32] [added: 35] |

| Item 3. | | [Legal Proceedings](#item_3_legal_proceedings) | | [removed: 32] [added: 36] |

| Item 4. | | [Mine Safety Disclosures](#item_4_mine_safety_disclosures) | | [removed: 32] [added: 36] |

| Item 5. | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#item_5_market_registrants) | | [removed: 33] [added: 37] |

| Item 6. | | [\[Reserved\]](#reserved) | | [removed: 34] [added: 38] |

| Item 7. | | [Management’s Discussion and Analysis of Financial Condition and Results of Operations](#item_7_managements_discussion_analysis) | | [removed: 35] [added: 39] |

| Item 8. | | [Financial Statements and Supplementary Data](#item_8_financial_statements_supplementar) | | [removed: 57] [added: 58] |

| Item 9. | | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#item_9_changes_in_disagreements_with_acc) | | [removed: 57] [added: 58] |

| Item 9A. | | [Controls and Procedures](#item_9a_controls_procedures) | | [removed: 57] [added: 58] |

| Item 10. | | [Directors, Executive Officers and Corporate Governance](#item_10_directors_executive_ficers_corpo) | | [removed: 59] [added: 60] |

| Item 11. | | [Executive Compensation](#item_11_executive_compensation) | | [removed: 59] [added: 60] |

| Item 12. | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#item_12_security_ownership_certain_benef) | | [removed: 59] [added: 60] |

| Item 13. | | [Certain Relationships and Related Transactions, and Director Independence](#item_13_certain_relationships_related_tr) | | [removed: 59] [added: 60] |

| Item 14. | | [Principal Accountant Fees and Services](#item_14_principal_accounting_fees_servic) | | [removed: 59] [added: 60] |

| Item 15. | | [Exhibits and Financial Statement Schedules](#item_15_exhibits_financial_statement_sch) | | [removed: 60] [added: 61] |

| Item 16. | | [Form 10-K Summary](#form_10k_summary) | | [removed: 107] [added: 106] |

This Annual Report [removed: on Form 10-K] contains statements that are not historical in nature, are predictive in nature, or that depend upon or refer to future events or conditions or otherwise contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), and Section 27A of the Securities Act of 1933, as amended (the Securities Act).

our expectation that, on a constant currency basis, our total cloud and license revenues generally will continue to increase due to expected growth in our cloud services and [removed: license support offerings, and] continued demand for our cloud license and on-premise license [added: and license support] offerings;

our belief that we can market our Oracle SaaS and OCI services [added: (collectively Oracle Cloud Services)] to a broader ecosystem of small and medium-sized businesses, non-IT lines of business purchasers, developers and partners due to the highly available, intuitive design, ease of access, low touch and low cost characteristics of the Oracle Cloud;

our expectation that substantially all of our customers will renew their license support contracts [removed: annually;][added: upon expiration;]

our belief that Oracle Fusion Cloud Enterprise Resource Planning [added: (ERP)] is a strategic suite of applications that is foundational to [removed: facilitate] [added: facilitating] and [removed: extract] [added: extracting] more business value out of the adoption of other Oracle SaaS offerings as customers realize the value of a common data model that spans across core business applications;

our belief that we have adequately provided under U.S. generally accepted accounting principles for outcomes related to our tax [removed: audits and] [added: audits,] that the final outcome of our tax-related examinations, [added: agreements or judicial proceedings will not have a material effect on our results of operations, and that our net deferred tax assets will likely be realized in the foreseeable future;]

declarations of future cash dividend payments and the timing and amount of future stock repurchases, including our [removed: expectations] [added: expectation] that the levels of our future stock repurchase activity may be modified in comparison to past periods in order to use available cash for other purposes and that the amount of stock repurchases will not increase until our gross debt is reduced below certain thresholds;

Forward-looking statements may be preceded by, followed by or include the words “anticipates,” “believes,” [added: “continues,” “could,”] “endeavors,” “estimates,” “expects,” “intends,” “is designed to,” [added: “likely,” “may,”] “plans,” [added: “potential,”] “seeks,” [added: “shall,”] “should,” “strives,” “will” and similar expressions.

Factors that might cause or contribute to such differences include, but are not limited to, those discussed in “Risk Factors” included elsewhere in this Annual Report and as may be updated in filings we make from time to time with the U.S. Securities and Exchange Commission (the SEC), including our Quarterly Reports on Form 10-Q to be filed by us in our fiscal year [removed: 2024,] [added: 2025,] which runs from June 1, [removed: 2023] [added: 2024] to May 31, [removed: 2024.][added: 2025.]

[removed: New information, future events or risks could cause the] forward-looking events we discuss in this Annual Report not to occur.

| Item 1C. | | [Cybersecurity](#item_1c) | | 33 |

| | | [Signatures](#signatures) | | 114 |

our expectations regarding the financial performance and long-term potential of one of our investment companies;

the cost savings we expect to realize pursuant to the Fiscal 2024 Oracle Restructuring Plan;

our beliefs regarding the retention of employees and how our products help to improve our employees’ learning experiences;

New information, future events or risks could cause the

[Index to Financial Statements](#item_15_exhibits_financial_statement_sch)

| Item 9B. | | [Other Information](#item_9b_or_information) | | 58 |

| | | [Signatures](#signatures) | | 115 |

agreements or judicial proceedings will not have a material effect on our results of operations and our belief that our net deferred tax assets will likely be realized in the foreseeable future;

our expectation that certain litigation related charges will not recur;

the possibility that we may incur additional restructuring expenses in future periods due to the initiation of new restructuring plans;

[Index to Financial Statements](#item_15_exhibits_financial_statement_sch)

Our overall information security risk management approach is designed to enable us to assess, identify and manage major risk exposures, including from material risks from cybersecurity threats, in a timely manner.

As part of our information security risk management program, we perform risk assessments in which we map and prioritize information security risks identified through the processes described below.

These assessments inform our information security risk management strategies and oversight processes and we view cybersecurity risks as one of the key risk categories we face.

We believe that Oracle is a target for computer hackers, cyber threats and other bad actors because our products and services store, retrieve, process and manage large amounts of data, including sensitive data.

We and our vendors are regularly subject to attempts by third parties to identify and exploit product and service vulnerabilities, penetrate or bypass our security measures and gain unauthorized access to our or our customers’, partners’ and suppliers’ software, hardware and cloud offerings, networks and systems.

During fiscal 2024, we did not identify any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected us, including our business strategy, results of operations or financial condition.

However, if a cyberattack or other security incident results in unauthorized access to or modification or exfiltration of our customers’ or suppliers’ data, other external data, our own data or our IT systems, or if the services we provide to our customers are disrupted, or

[Index to Financial Statements](#item_15_exhibits_financial_statement_sch)

if our products or services are reported to have (or are perceived as having) security vulnerabilities, we could incur significant expenses and suffer substantial damage to our brand and reputation.

Refer to “Data Privacy, Cybersecurity and Intellectual Property Risks” in Risk Factors included in Item 1A within this Annual Report for additional discussion of the challenges we encounter with respect to cybersecurity risks.

Our corporate security and information security programs are designed to help us prevent, prepare for, detect, respond to and recover from cybersecurity threats.

We leverage industry standard security frameworks to evaluate our security controls.

Relevant personnel collaborate with subject matter experts throughout the process to identify and assess material cybersecurity threats, evaluate their severity, and explore ways to mitigate a potential security incident.

We continually conduct security and privacy reviews to pinpoint risks associated with our products, services and enterprise.

We also employ various monitoring tools to track suspicious or anomalous activity across our networks, systems, and data, and we simulate cyber threats to proactively address vulnerabilities.

Finally, we routinely train our employees on cybersecurity matters.

This program includes processes for triaging, assessing the severity of, escalating, containing, investigating and remediating information security events, as well as meeting legal obligations and minimizing customer impact and brand and reputational damage.

In addition, we maintain insurance to protect against potential losses arising from a cybersecurity incident.

Periodic tabletop exercises are conducted to test and reinforce our incident response controls, with incident severity and priority assessed on an ongoing basis.

We also conduct external and internal risk management audits to assess and report on our internal incident response preparedness and help identify areas for continued focus and improvement.

We conduct periodic penetration testing to identify vulnerabilities in our products, services, and systems.

We also undergo security-related industry certifications and attestations by external auditors, including System and Organization Controls (SOC) 1, SOC 2, International Organization for Standardization (ISO) 27001, 27017 and 27018, Cloud Security Alliance Security Trust Assurance and Risk (CSA STAR), Payment Card Industry Data Security Standard (PCI DSS) and other compliance frameworks.

Additionally, our vendor risk management program identifies and mitigates risks associated with third-party service providers, including those within our supply chain and those with access to our customer or employee data or systems.

We use the findings from these and other processes to review our information security practices, procedures and technologies.

Cybersecurity is an important area of focus for our Board of Directors.

Our information security risk management program is designed to allow our Board of Directors to establish a mutual understanding with management of the effectiveness of our information security risk management practices and capabilities, including the division of responsibilities for reviewing our information security risk exposure and risk tolerance, tracking emerging information risks and ensuring proper escalation of certain key risks for periodic review by the Board of Directors and its committees.

As part of its broader risk oversight activities, the Board of Directors oversees risks from cybersecurity risks, both directly and through the Finance and Audit Committee (F&A Committee).

As reflected in its charter, the F&A Committee assists the Board of Directors with the management and assessment of privacy and data security risk and is responsible for reviewing and discussing with management privacy and data security risk exposures, including, among other things, the potential impacts of those exposures on our business, financial results, operations and reputation.

The F&A Committee also oversees our internal controls over financial reporting, including with respect to financial reporting-related information systems.

As an element of its information security risk management oversight activities, the F&A Committee reviews the results of our incident response control tests, external and internal audits and penetration testing and oversees our vendor risk management program.

The F&A Committee also receives quarterly updates regarding cybersecurity matters from senior management, including Mr. Screven, our Executive Vice President and Chief Corporate Architect (Chief Corporate Architect).

In turn, the F&A Committee reports to the full Board of Directors on a quarterly basis regarding the F&A Committee’s cybersecurity risk oversight activities.

We also have Board members with expansive knowledge and expertise in the area of cybersecurity.

In addition to these regularly scheduled updates, our Chief Corporate Architect, Chief Privacy Officer and Head of Global Information Security may also report to the F&A Committee on how certain information security risks are being managed and progress towards agreed mitigation goals, as well as any potential material risks from cybersecurity threats that have been detected by the information security team.

[Index to Financial Statements](#item_15_exhibits_financial_statement_sch)

Our Chief Corporate Architect is responsible for day-to-day identification, assessment and management of the information security risks we face.

Our Chief Corporate Architect studied computer science at Carnegie Mellon University and has been with Oracle since 1986 in a number of positions.

In his current role as Chief Corporate Architect, he drives technology and architecture decisions across all Oracle products and leads companywide strategic initiatives, including with respect to industry standards and security, to ensure that product development is consistent with Oracle’s overall long-term strategy.

Our Chief Corporate Architect is supported by team members who have relevant educational and industry experience.

These team members provide regular reports to the Chief Corporate Architect and work closely with our Chief Privacy Officer and include personnel dedicated to information security, product security, and physical security.

Our properties consist of owned and leased office facilities for [added: cloud operations,] sales, support, research and development, services, [removed: manufacturing, cloud operations] [added: manufacturing] and administrative and other functions.

We also own or lease other facilities for current use consisting of approximately [removed: 29.2] [added: 27.7] million square feet in various other locations in the U.S. and abroad.

Approximately [removed: 9.6] [added: 9.1] million square feet, or 32%, of our total owned and leased space is sublet or is being actively marketed for sublease or disposition.

[Index to Financial Statements](#item_15_exhibits_financial_statement_sch)

Our common stock is traded on the New York Stock Exchange under the symbol “ORCL.” According to the records of our transfer agent, we had [removed: 7,297] [added: 6,921] stockholders of record as of May 31, [removed: 2023.][added: 2024.]

As of May 31, [removed: 2023,] [added: 2024,] approximately [removed: $8.2] [added: $7.0] billion remained available for stock repurchases pursuant to our stock repurchase program.

The following table summarizes the stock repurchase activity for the three months ended May 31, [removed: 2023] [added: 2024] and the approximate dollar value of shares that may yet be purchased pursuant to our stock repurchase program:

The graph below compares the cumulative total stockholder return on our common stock with the cumulative total return of the S&P 500 [removed: Index, the S&P Information Technology] Index and the Dow Jones U.S. Technology Total Return Index for each of the last five fiscal years ended May 31, [removed: 2023,] [added: 2024,] assuming an investment of $100 at the beginning of such period and the reinvestment of any dividends.

[removed: ][added: ]

*$100 INVESTED ON MAY 31, [removed: 2018] [added: 2019] IN STOCK OR

| Dow Jones U.S. Technology Total Return Index | | | 100.0 | | | | [removed: 103.1] [added: 139.1] | | | | [removed: 143.4] [added: 205.9] | | | | [removed: 212.3] [added: 197.5] | | | | [removed: 203.7] [added: 234.9] | | | | [removed: 242.2] [added: 329.3] | |

| March 1, 2024—March 31, 2024 | | | 0.4 | | | $ | 121.76 | | | | 0.4 | | | $ | 7,065.6 | |

| April 1, 2024—April 30, 2024 | | | 0.4 | | | $ | 119.95 | | | | 0.4 | | | $ | 7,014.0 | |

| May 1, 2024—May 31, 2024 | | | 0.4 | | | $ | 119.69 | | | | 0.4 | | | $ | 6,962.3 | |

| Total | | | 1.2 | | | $ | 120.42 | | | | 1.2 | | | | | |

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*

Among Oracle Corporation, the S&P 500 Index and the Dow Jones U.S. Technology Total Return Index

| | | 5/19 | | | | 5/20 | | | | 5/21 | | | | 5/22 | | | | 5/23 | | | | 5/24 | | |

| Oracle Corporation | | | 100.0 | | | | 108.1 | | | | 161.0 | | | | 149.2 | | | | 223.6 | | | | 250.9 | |

| S&P 500 Index | | | 100.0 | | | | 112.8 | | | | 158.3 | | | | 157.9 | | | | 162.5 | | | | 208.3 | |

| March 1, 2023—March 31, 2023 | | | 0.6 | | | $ | 87.46 | | | | 0.6 | | | $ | 8,258.5 | |

| April 1, 2023—April 30, 2023 | | | 0.5 | | | $ | 94.72 | | | | 0.5 | | | $ | 8,214.0 | |

| May 1, 2023—May 31, 2023 | | | 0.5 | | | $ | 98.90 | | | | 0.5 | | | $ | 8,162.4 | |

| Total | | | 1.6 | | | $ | 93.29 | | | | 1.6 | | | | | |

We have elected to replace the S&P Information Technology Index with the Dow Jones U.S. Technology Total Return Index because we believe the new index represents a more diversified group of companies across the technology industry and is more aligned with our peer group.

In this transition year, the stock performance graph below includes the new index and the previously reported index.

| | | 5/18 | | | | 5/19 | | | | 5/20 | | | | 5/21 | | | | 5/22 | | | | 5/23 | | |

| Oracle Corporation | | | 100.0 | | | | 110.1 | | | | 119.0 | | | | 177.2 | | | | 164.2 | | | | 246.2 | |

| S&P 500 Index | | | 100.0 | | | | 103.8 | | | | 117.1 | | | | 164.3 | | | | 163.8 | | | | 168.6 | |

| S&P Information Technology Index | | | 100.0 | | | | 104.4 | | | | 144.5 | | | | 206.1 | | | | 210.2 | | | | 250.8 | |

Based on our management’s evaluation (with the participation of our Principal Executive and Financial Officer), as of the end of the period covered by this report, our Principal Executive and Financial Officer has concluded that our disclosure controls and procedures were effective as of May 31, [removed: 2023] [added: 2024] to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to our management, including our Principal Executive and Financial Officer as appropriate to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including our Principal Executive and Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of May 31, [removed: 2023] [added: 2024] based on the guidelines established in *Internal Control—Integrated Framework* issued by the Committee of Sponsoring Organizations of the Treadway Commission’s 2013 framework.

Based on the results of our evaluation, our management concluded that our internal control over financial reporting was effective as of May 31, [removed: 2023.][added: 2024.]

The effectiveness of our internal control over financial reporting as of May 31, [removed: 2023] [added: 2024] has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included in Part IV, Item 15 of this Annual Report.

[removed: Except as described above, there] [added: There] were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

[Index to Financial Statements](#item_15_exhibits_financial_statement_sch)

PART III

As a result of our acquisition of Cerner on June 8, 2022, our internal control over financial reporting, subsequent to the date of acquisition, includes certain additional internal controls relating to Cerner.

The other information required by this Item 10 is incorporated herein by reference from the information contained in our Proxy Statement to be filed with the SEC in connection with the solicitation of proxies for our [removed: 2023] [added: 2024] Annual Meeting of Stockholders [removed: (2023] [added: (2024] Proxy Statement).

The information required by this Item 11 is incorporated herein by reference from the information to be contained in our [removed: 2023] [added: 2024] Proxy Statement.

The information required by this Item 12 is incorporated herein by reference from the information to be contained in our [removed: 2023] [added: 2024] Proxy Statement.

The information required by this Item 13 is incorporated herein by reference from the information to be contained in our [removed: 2023] [added: 2024] Proxy Statement.

The information required by this Item 14 is incorporated herein by reference from the information to be contained in our [removed: 2023] [added: 2024] Proxy Statement.

| [Reports of Independent Registered Public Accounting Firm](#report_independent_registered_public_acc) (PCAOB ID: 42) | | [removed: 61] [added: 62] |

| [Balance Sheets as of May 31, [removed: 2023] [added: 2024] and [removed: 2022](#consolidated_balance_sheets)] [added: 2023](#consolidated_balance_sheets)] | | [removed: 64] [added: 65] |

| [Statements of Operations for the years ended May 31, [removed: 2023, 2022] [added: 2024, 2023] and [removed: 2021](#consolidated_statements_operations)] [added: 2022](#consolidated_statements_operations)] | | [removed: 65] [added: 66] |

| [Statements of Comprehensive Income for the years ended May 31, [removed: 2023, 2022] [added: 2024, 2023] and [removed: 2021](#consolidated_statements_comprehensive_in)] [added: 2022](#consolidated_statements_comprehensive_in)] | | [removed: 66] [added: 67] |

| [Statements of Stockholders’ Equity (Deficit) for the years ended May 31, [removed: 2023, 2022] [added: 2024, 2023] and [removed: 2021](#consolidated_statements_equity)] [added: 2022](#consolidated_statements_equity)] | | [removed: 67] [added: 68] |

| [Statements of Cash Flows for the years ended May 31, [removed: 2023, 2022] [added: 2024, 2023] and [removed: 2021](#consolidated_statements_cash_flows)] [added: 2022](#consolidated_statements_cash_flows)] | | [removed: 68] [added: 69] |

| [Notes to Consolidated Financial Statements](#n1_organization_significant_accounting_p) | | [removed: 69] [added: 70] |

We have audited the accompanying consolidated balance sheets of Oracle Corporation (the Company) as of May 31, [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] the related consolidated statements of operations, comprehensive income, stockholders’ equity (deficit) and cash flows for each of the three years in the period ended May 31, [removed: 2023,] [added: 2024,] and the related notes (collectively referred to as the [removed: “financial] [added: “consolidated financial] statements”).

In our opinion, the [added: consolidated] financial statements present fairly, in all material respects, the financial position of the Company at May 31, [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] and the results of its operations and its cash flows for each of the three years in the period ended May 31, [removed: 2023,] [added: 2024,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the [removed: Company's] [added: Company’s] internal control over financial reporting as of May 31, [removed: 2023,] [added: 2024,] based on criteria established in Internal [removed: Control-Integrated] [added: Control—Integrated] Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 [removed: framework)] [added: framework),] and our report dated June 20, [removed: 2023] [added: 2024] expressed an unqualified opinion thereon.

Critical Audit [removed: Matters][added: Matter]

The critical audit [removed: matters] [added: matter] communicated below [removed: are matters] [added: is a matter] arising from the current period audit of the financial statements that [removed: were] [added: was] communicated or required to be communicated to the audit committee and that: (1) [removed: relate] [added: relates] to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of [added: the] critical audit [removed: matters] [added: matter] does not alter in any way our opinion on the [added: consolidated] financial statements, taken as a whole, and we are not, by communicating the critical audit [removed: matters] [added: matter] below, providing [added: a] separate [removed: opinions] [added: opinion] on the critical audit [removed: matters] [added: matter] or on the accounts or disclosures to which [removed: they relate.][added: it relates.]

| *Description of the matter* | | As discussed in Note 13 of the [added: consolidated] financial statements, the Company recognizes uncertain tax positions and measures unrecognized tax benefits related to various domestic and foreign matters. [removed: As of May 31, 2023, the total amount of unrecognized tax benefits was $7.7 billion, of which $3.9 billion, if recognized would impact the Company’s effective tax rate.] The Company uses significant judgment in the accounting for [removed: some of these] uncertain tax positions [added: related to certain revenue sharing and cost reimbursement arrangements,] including the interpretation and application of tax laws and legal rulings in various jurisdictions. Auditing management’s evaluation of whether an uncertain tax position is more likely than not to be sustained and the measurement of the benefit of [removed: various] [added: uncertain] tax positions [added: related to certain revenue sharing and cost reimbursement arrangements] was complex, involved significant judgment, and was based on interpretations and application of tax laws and legal rulings. |

| *How we addressed the matter in our audit* | | We obtained an understanding, evaluated the design, and tested the operating effectiveness of the controls over management’s process for interpretation and application of tax laws and legal rulings, as well as development of the assumptions and estimates used in the measurement of [removed: uncertain tax] [added: these] positions. To test management’s assessment of [removed: which] [added: these] uncertain tax [removed: positions are more likely than not to be sustained,] [added: positions,] we performed audit procedures that included, among others, evaluating management’s assumptions and [removed: analysis, including any communications with taxing authorities that] [added: analysis which] detailed the basis and technical merits of the uncertain tax positions. We involved our tax subject matter professionals in assessing the technical merits of [removed: certain tax] [added: these] positions [removed: based on] [added: and used] our knowledge of relevant tax laws and experience with related taxing authorities. In addition, we also evaluated the Company’s disclosures in relation to these matters included in Note 13 of the [added: consolidated] financial statements. |

We have audited Oracle Corporation’s internal control over financial reporting as of May 31, [removed: 2023,] [added: 2024,] based on criteria established in [removed: the] Internal [removed: Control— Integrated] [added: Control—Integrated] Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Oracle Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of May 31, [removed: 2023,] [added: 2024,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of [removed: Oracle Corporation] [added: the Company] as of May 31, [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] the related consolidated statements of operations, comprehensive income, stockholders’ equity (deficit) and cash flows for each of the three years in the period ended May 31, [removed: 2023,] [added: 2024,] and the related notes and our report dated June 20, [removed: 2023] [added: 2024] expressed an unqualified opinion thereon.

As of May 31, [removed: 2023] [added: 2024] and [removed: 2022][added: 2023]

| (in millions, except per share data) | | [added: 2024 | | | |] 2023 | | | | 2022 | | |

| Cash and cash equivalents | | $ | [removed: 9,765] [added: 10,454] | | | $ | [removed: 21,383] [added: 9,765] | |

| Marketable securities | | | [removed: 422] [added: 207] | | | | [removed: 519] [added: 422] | |

| Trade receivables, net of allowances for credit losses of [removed: $428] [added: $485] and [removed: $362] [added: $428] as of May 31, [removed: 2023] [added: 2024] and May 31, [removed: 2022,] [added: 2023,] respectively | | | [removed: 6,915] [added: 7,874] | | | | [removed: 5,953] [added: 6,915] | |

| Prepaid expenses and other current assets | | | [removed: 3,902] [added: 4,019] | | | | [removed: 3,778] [added: 3,902] | |

| Total current assets | | | [removed: 21,004] [added: 22,554] | | | | [removed: 31,633] [added: 21,004] | |

| Property, plant and equipment, net | | | [removed: 17,069] [added: 21,536] | | | | [removed: 9,716] [added: 17,069] | |

| Intangible assets, net | | | [removed: 9,837] [added: 6,890] | | | | [removed: 1,440] [added: 9,837] | |

| Goodwill, net | | | [removed: 62,261] [added: 62,230] | | | | [removed: 43,811] [added: 62,261] | |

| Deferred tax assets | | | [removed: 12,226] [added: 12,273] | | | | [removed: 12,782] [added: 12,226] | |

| Other non-current assets | | | [removed: 11,987] [added: 15,493] | | | | [removed: 9,915] [added: 11,987] | |

| Total non-current assets | | | [removed: 113,380] [added: 118,422] | | | | [removed: 77,664] [added: 113,380] | |

| Total assets | | $ | [removed: 134,384] [added: 140,976] | | | $ | [removed: 109,297] [added: 134,384] | |

| LIABILITIES AND [removed: STOCKHOLDERS' EQUITY (DEFICIT)] [added: STOCKHOLDERS’ EQUITY] | | | | | | | | |

| Notes payable and other borrowings, current | | $ | [removed: 4,061] [added: 10,605] | | | $ | [removed: 3,749] [added: 4,061] | |

| Accounts payable | | | [removed: 1,204] [added: 2,357] | | | | [removed: 1,317] [added: 1,204] | |

| Accrued compensation and related benefits | | | [removed: 2,053] [added: 1,916] | | | | [removed: 1,944] [added: 2,053] | |

| Deferred revenues | | | [removed: 8,970] [added: 9,313] | | | | [removed: 8,357] [added: 8,970] | |

| Other current liabilities | | | [removed: 6,802] [added: 7,353] | | | | [removed: 4,144] [added: 6,802] | |

| Total current liabilities | | | [removed: 23,090] [added: 31,544] | | | | [removed: 19,511] [added: 23,090] | |

| Notes payable and other borrowings, non-current | | | [removed: 86,420] [added: 76,264] | | | | [removed: 72,110] [added: 86,420] | |

June 20, 2024

June 20, 2024

| (in millions, except per share data) | | 2024 | | | | 2023 | | |

For the Years Ended May 31, 2024, 2023 and 2022

| Net income | | $ | 10,467 | | | $ | 8,503 | | | $ | 6,717 | |

For the Years Ended May 31, 2024, 2023 and 2022

| Repurchases of common stock | | | (11 | ) | | | (117 | ) | | | (1,083 | ) | | | — | | | | (1,200 | ) | | | — | | | | (1,200 | ) |

| Net income | | | — | | | | — | | | | 10,467 | | | | — | | | | 10,467 | | | | 186 | | | | 10,653 | |

| Balances as of May 31, 2024 | | | 2,755 | | | $ | 32,764 | | | $ | (22,628 | ) | | $ | (1,432 | ) | | $ | 8,704 | | | $ | 535 | | | $ | 9,239 | |

For the Years Ended May 31, 2024, 2023 and 2022

| Net income | | $ | 10,467 | | | $ | 8,503 | | | $ | 6,717 | |

| Unpaid capital expenditures | | $ | 1,637 | | | $ | 588 | | | $ | 731 | |

May 31, 2024

During the first quarter of fiscal 2024, we finalized our adoption of Accounting Standards Update (ASU) 2020-04, *Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting* and subsequent amendments to the initial guidance, which had no material impact to our consolidated financial statements or notes thereto for the year ended May 31, 2024.

In many cases, the accounting treatment of a particular transaction is specifically

Our investments in non-marketable debt instruments are recorded at cost plus accrued interest, adjusted for any provision for expected credit losses.

Our investments in marketable debt and equity securities totaled $207 million and $422 million as of May 31, 2024 and 2023, respectively, and are included in current assets in the accompanying consolidated balance sheets.

We follow the equity method of accounting for our investment in Ampere and our share of loss under the equity method of accounting is recorded in the non-operating expenses, net line item in our consolidated statements of operations.

We also have

convertible debt investments in Ampere which, under the terms of an agreement with Ampere and other co-investors, will mature in June 2026 and are convertible into equity securities at the holder’s option under certain circumstances.

During the fiscal year ended May 31, 2024, we invested an aggregate of $600 million in convertible debt instruments issued by Ampere.

The total carrying value of our investments in Ampere after accounting for losses under the equity method of accounting was $1.5 billion and $1.2 billion as of May 31, 2024 and 2023, respectively.

In accordance with the terms of an agreement with other co-investors, we are also a counterparty to certain put (exercisable by a co-investor) and call (exercisable by Oracle) options at prices of approximately $400 million to $1.5 billion, respectively, to acquire additional equity interests in Ampere from our co-investors through January 2027.

If either of such options is exercised by us or our co-investors, we would obtain control of Ampere and consolidate its results with our results of operations.

Ampere has historically generated net losses.

Refer to “Marketable and Non-Marketable Investments” above for additional information on our non-marketable investments.

future demand within specific time horizons.

required.

We apply the provisions of ASC 842, *Leases* (ASC 842), in accounting for our leases.

provided by operating activities in our consolidated statements of cash flows for the years ended May 31, 2024 and 2023.

income taxes in such period.

| Other income (expenses), net | | | 168 | | | | (6 | ) | | | (86 | ) |

more than 50% likely to be realized upon ultimate settlement.

Segment Reporting: In November 2023, the FASB issued ASU 2023-07, *Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures* (ASU 2023-07), which enhances the disclosures required for operating segments in our annual and interim consolidated financial statements.

ASU 2023-07 is effective for us for our annual reporting for fiscal 2025 and for interim period reporting beginning in fiscal 2026 on a retrospective basis.

Early adoption is permitted.

We are currently evaluating the impact of our pending adoption of ASU 2023-07 on our consolidated financial statements.

Income Taxes: In December 2023, the FASB issued ASU 2023-09, *Income Taxes (Topic 740): Improvements to Income Tax Disclosures* (ASU 2023-09), which enhances the disclosures required for income taxes in our annual consolidated financial statements.

ASU 2023-09 is effective for us for our annual reporting for fiscal 2026 on a prospective basis.

Both early adoption and retrospective application are permitted.

| | | |

| --- | --- | --- |

[Index to Financial Statements](#item_15_exhibits_financial_statement_sch)

| | | Business combinations – Valuation of intangible assets |

| *Description of the matter* | | As discussed in Note 2 of the financial statements, the Company completed the acquisition of Cerner Corporation during fiscal year 2023 for a total purchase price of $28.2 billion, which was accounted for as a business combination. In connection with this acquisition, management recognized customer relationship, order backlog, developed technology and trade name intangible assets of $12.0 billion. The valuation of the customer relationship and developed technology intangible assets is complex and judgmental due to the use of subjective assumptions in the valuation models used by management when determining their estimated fair value. In particular, the fair value estimates for the acquired assets are sensitive to changes in assumptions for revenue growth, and cost of revenues and operating expenses as a percentage of revenue. Auditing management’s valuation of customer relationship and developed technology intangible assets is complex due to the auditor judgment required to evaluate management’s assumptions used in determining the fair value of these assets. |

| *How we addressed the matter in our audit* | | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the determination of the fair value of customer relationships and developed technology intangible assets. This included controls over management’s development of the assumptions described above. To test the estimated fair value of the customer relationships and developed technology intangible assets, we performed audit procedures that included, among others, evaluating the Company’s selection of valuation methodologies with the assistance of our valuation specialists and application of acquisition accounting, and evaluating the significant assumptions used by the Company to develop the forecasted revenue growth rates and projected cost of revenues and operating expenses. We compared the significant assumptions to current industry, market and economic trends, and to the historical results of the acquired business and tested the completeness and accuracy of the underlying data used by management in the valuation. |

June 20, 2023

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

(1)

| Balances as of May 31, 2020 | | | 3,067 | | | $ | 26,486 | | | $ | (12,696 | ) | | $ | (1,716 | ) | | $ | 12,074 | | | $ | 643 | | | $ | 12,717 | |

| Repurchases of common stock | | | (329 | ) | | | (2,893 | ) | | | (18,107 | ) | | | — | | | | (21,000 | ) | | | — | | | | (21,000 | ) |

| Net income | | | — | | | | — | | | | 13,746 | | | | — | | | | 13,746 | | | | 180 | | | | 13,926 | |

| Fair values of stock awards assumed in connection with acquisitions | | $ | 55 | | | $ | — | | | $ | — | |

Through our acquisition of Cerner, we enhanced our offerings of each of our three existing businesses, cloud and license, hardware and services.

The consolidated financial statements included in this Annual Report include the financial results of Cerner prospectively from the date of acquisition.

Refer to Note 2 below for additional details regarding our acquisition of Cerner.

The comparability of our consolidated statements of operations for the year ended May 31, 2021 was impacted by a $2.3 billion net income tax benefit related to the partial realignment of our legal entity structure that resulted in the intra-group transfer of certain intellectual property rights.

Refer to Note 13 below for additional information regarding our income taxes.

technical support services.

In all periods

presented, when estimating the asset impairment charges, assumptions were applied regarding estimated sub-lease payments to be received, which can differ from actual results.

This may require us to revise our initial estimates which may affect our results of operations and financial position in the period the revision is made.

We are also a counterparty to certain options to acquire additional equity interests in that entity at various times through June 2025 and we could obtain control of that entity should such options be exercised.

Cost is computed using standard cost, which approximates actual cost, on a first-in, first-out basis.

Each period we evaluate the estimated remaining useful lives of purchased intangible assets and whether events or changes in circumstances warrant a revision to the remaining periods of amortization.

liability for an estimated loss if the potential loss from any claim or legal proceeding is considered probable, and the amount can be reasonably estimated.

| Other (losses) gains, net | | | (6 | ) | | | (86 | ) | | | 211 | |

Financial Instruments: In March 2020, the FASB issued ASU 2020-04, *Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting* (ASU 2020-04) and also issued subsequent amendments to the initial guidance (collectively, Topic 848).

Topic 848 provides optional guidance for contract modifications and certain hedging relationships associated with the transition from reference rates that are

expected to be discontinued.

We will adopt Topic 848 when our relevant contracts are modified upon transition to alternative reference rates.

We do not expect our adoption of Topic 848 to have a material impact on our consolidated financial statements.

On December 20, 2021, we entered into an Agreement and Plan of Merger (Merger Agreement) with Cerner, a provider of digital information systems used within hospitals and health systems that are designed to enable medical professionals to deliver better healthcare to individual patients and communities.

On January 19, 2022, pursuant to the Merger Agreement, we commenced a tender offer to purchase all of the issued and outstanding shares of common stock of Cerner at a purchase price of $95.00 per share, net to the seller in cash, without interest thereon, based upon the terms and subject to the conditions set forth in the Offer to Purchase dated January 19, 2022, and the related Letter of Transmittal.

On June 8, 2022, pursuant to the terms of the tender offer and applicable Delaware law, we acquired all the outstanding Cerner shares and effectuated the merger of Cerner with and into a wholly-owned subsidiary of Oracle and Cerner became an indirect, wholly-owned subsidiary of Oracle.

Vested equity awards outstanding immediately prior to the consummation of the merger were cancelled in exchange for the right to receive an amount in cash based on a formula contained in the Merger Agreement.

The unvested equity awards to acquire Cerner common stock that were outstanding immediately prior to the conclusion of the merger were converted into equity awards denominated in shares of Oracle common stock based on formulas contained in the Merger Agreement.

We have included the financial results of Cerner in our consolidated financial statements from the date of acquisition.

During fiscal 2023, Cerner contributed $5.9 billion to our total revenues.

None.

[Index to Financial Statements](#item_15_exhibits_financial_statement_sch)

PART III