Oracle Corp. (NYSE:ORCL)

Current Provision

The current provision shows a fluctuating trend over the six-year period. It decreased significantly from 2779 million USD in 2020 to 1678 million USD in 2021. Following this decline, the provision rose moderately to 2078 million USD in 2022 and then increased sharply again in 2023 to 2790 million USD. In 2024 and 2025, the provision continued to rise to a peak of 3413 million USD in 2024, before slightly declining to 3354 million USD in 2025. Overall, the current provision demonstrates volatility with a general upward trajectory from 2021 onwards.

Deferred Benefit

The deferred benefit exhibited predominantly negative values throughout the period, indicating a deferred tax benefit rather than an expense. The magnitude of this benefit increased from -851 million USD in 2020 to a larger negative figure of -2425 million USD in 2021, suggesting a higher deferred tax benefit recognized that year. Subsequently, the benefit diminished in absolute terms to -1146 million USD in 2022, before experiencing an increase again to -2167 million USD in 2023. In 2024 and 2025, the deferred benefit decreased slightly in magnitude to -2139 million USD and then to -1637 million USD, respectively. This pattern reflects considerable variability in deferred tax impacts over the years.

Provision for (Benefit from) Income Taxes

This combined figure, representing the net tax provision after accounting for current and deferred items, also fluctuates over the analyzed period. Starting at 1928 million USD in 2020, the provision turned negative in 2021, reaching -747 million USD, indicating a net tax benefit for that year. The value then shifted back to a positive net provision of 932 million USD in 2022, though lower than the 2020 level. In 2023, the provision decreased to 623 million USD, followed by an increase to 1274 million USD in 2024, and then a further rise to 1717 million USD in 2025. This net figure's fluctuations correspond closely to the movements in both current and deferred components, reflecting the complex interplay between immediate tax expenses and deferred tax benefits.

The analysis of the annual tax rate data reveals notable trends and fluctuations in the effective income tax rates over the observed periods, while the U.S. federal statutory tax rate remains constant.

U.S. federal statutory tax rate

The statutory tax rate is steady at 21% throughout all periods from May 31, 2020, to May 31, 2025. This indicates no legislative changes impacting the federal tax rate during this timeframe.

Effective income tax rate

The effective income tax rate displays significant variability. Starting at 16% in May 2020, it experiences a marked decline to -5.7% in May 2021, suggesting the company benefited from tax credits, adjustments, or losses during that fiscal year.

Subsequent years show a recovery with the rate rising to 12.2% in May 2022, followed by a decrease to 6.8% in May 2023. In the last two periods observed, the rate increases moderately to 10.9% and 12.1% respectively by May 2025.

Overall, the effective tax rate remains consistently below the statutory rate across all periods, indicating that the company utilizes tax planning strategies, deductions, or other factors to reduce its tax burden relative to the statutory benchmark.

In conclusion, while the statutory tax rate remains unchanged, the effective income tax rate exhibits considerable fluctuations with an overall trend of remaining below the statutory rate, reflecting the company’s dynamic tax position and potentially favorable tax management practices.

The financial data exhibits several notable trends over the six-year period under review. Various financial items show significant fluctuations, which provides insight into the company's evolving financial position and operational dynamics.

Accruals and Allowances

These have shown variability with a peak in 2023 at 928 million USD, followed by a decline in 2024 and a moderate increase in 2025, suggesting changing estimates in accrued liabilities or allowances.

Employee Compensation and Benefits

This expense item demonstrates a steady upward trend, indicating continuous growth in personnel-related costs, reaching its highest value in 2025 at 1,068 million USD, which may reflect salary increases or expanded workforce.

Differences in Timing of Revenue Recognition

An overall increasing pattern is observable, with values rising from 524 million USD in 2020 to 894 million USD in 2025, pointing to growing deferred revenues or variations in revenue recognition policies.

Lease Liabilities

This liability has expanded substantially, increasing from 253 million USD in 2020 to 3,279 million USD in 2025. The sharp rise could be linked to new lease agreements or changes in lease accounting standards.

Basis of Property, Plant, Equipment, and Intangible Assets

There is an unusual spike in 2021 to 12,161 million USD followed by a gradual decline through 2025, ending at 7,800 million USD. This may indicate significant asset revaluations, disposals, or impairments during this period.

Capitalized Research and Development

Data begins in 2023, showing rapid growth from 1,421 million USD to 4,153 million USD by 2025, indicating increased investment in long-term product development or technology assets.

Tax Credit and Net Operating Loss Carryforwards

An upward trend is evident with incremental increases each year, suggesting the accumulation of tax benefits or losses carried forward, reaching 5,857 million USD in 2025.

Deferred Tax Assets

This item shows a marked increase in 2021 and continues to grow steadily, from 6,870 million USD in 2020 to 23,841 million USD in 2025, implying recognition of future tax benefits.

Valuation Allowance

The allowance against deferred tax assets increases in absolute terms (more negative), indicating a cautious approach to the realization of these assets, though a slight easing occurs in 2024.

Deferred Tax Assets, Net

Following the trends of assets and allowances, the net deferred tax assets have increased significantly, from 5,511 million USD in 2020 to 21,879 million USD in 2025, enhancing the company's tax position.

Unrealized Gain on Stock

Relatively stable negative values throughout the years suggest consistent unrealized losses on stock holdings.

Acquired Intangible Assets

This line shows fluctuating negative values with a notable deepening loss in 2023 (-2,124 million USD) followed by improvements in 2024 and 2025, possibly reflecting impairments or amortization adjustments.

GILTI Deferred

The Global Intangible Low-Taxed Income deferred tax liability decreases in magnitude from -9,883 million USD in 2021 to -6,949 million USD in 2025, indicating a reduction in these deferred liabilities over time.

ROU Assets (Right of Use)

The corresponding asset related to lease liabilities increases negatively, reaching -3,207 million USD in 2025, mirroring the significant rise in lease liabilities and confirming the impact of lease accounting.

Withholding Taxes on Foreign Earnings

These taxes have steadily increased in negative value from -171 million USD in 2020 to -364 million USD in 2025, suggesting growing foreign income subject to withholding tax.

Deferred Tax Liabilities

Fluctuations in deferred tax liabilities are notable with peak negative values in 2021 and fairly consistent levels around -11,000 to -11,600 million USD thereafter.

Net Deferred Tax Assets (Liabilities)

This net figure improved significantly from 3,211 million USD in 2020 to 10,248 million USD in 2025, indicating an overall strengthening of deferred tax positions when offsetting assets and liabilities are considered.

Non-current deferred tax assets

The non-current deferred tax assets exhibit a significant increase from 3,252 million USD in 2020 to a peak of approximately 13,636 million USD in 2021. Following this peak, there is a slight downward trend with values decreasing to 11,877 million USD by 2025. This suggests a substantial initial build-up of deferred tax assets, followed by relative stabilization and gradual decrease over the subsequent periods.

Non-current deferred tax liabilities

The non-current deferred tax liabilities show a marked increase from 41 million USD in 2020 to 7,864 million USD in 2021. After this sharp rise, the liabilities steadily decline each year to reach 1,629 million USD by 2025. This pattern indicates an initial accumulation of tax liabilities, followed by a consistent reduction over the years, possibly reflecting changes in tax planning or recognition of liabilities.

Overall observations

Both deferred tax assets and liabilities experienced dramatic shifts between 2020 and 2021, with deferred tax assets increasing substantially and deferred tax liabilities rising sharply as well. Following 2021, deferred tax assets have slightly declined but remained relatively stable, while deferred tax liabilities consistently decreased, suggesting effective management of tax positions or structural changes impacting tax items over the forecasted periods.

Assets

The reported total assets exhibited fluctuations over the examined period, rising from $115,438 million in 2020 to a peak of $168,361 million in 2025. Notably, there was a decrease in 2022 to $109,297 million before resuming an upward trajectory. Adjusted total assets followed a similar pattern but consistently reported lower values than the reported figures. They declined notably in 2022 to $96,515 million, indicating adjustments that reduced asset valuation for that year, then increased steadily towards $156,484 million in 2025.

Liabilities

Reported total liabilities increased from $102,721 million in 2020 to $147,392 million in 2025, with a dip in 2022 to $115,065 million. Adjusted total liabilities mirrored this trend closely but maintained slightly lower values each year. The adjusted liabilities also dropped in 2022 to $109,034 million before progressing upward to $145,763 million by 2025. The narrowing gap between reported and adjusted liabilities over time suggests a convergence in liability recognition or estimation.

Stockholders’ Equity

Reported stockholders’ equity displayed significant volatility during the timeframe. Starting at $12,074 million in 2020, it dropped sharply to a negative $6,220 million in 2022, indicating a temporary deficit, before recovering to $20,451 million in 2025. The adjusted equity figures were consistently lower than reported equity, showing deeper negative values in 2021 and 2022, with a nadir of negative $12,971 million in 2022. A turnaround is evident post-2022, achieving positive adjusted equity of $10,203 million by 2025. This pattern reflects substantial adjustments likely related to deferred taxes or other valuation changes impacting equity.

Net Income

Reported net income increased from $10,135 million in 2020 to $13,746 million in 2021, then decreased notably in 2022 to $6,717 million. Subsequently, income rose steadily, reaching $12,443 million in 2025. Adjusted net income followed a comparable pattern but at consistently lower levels, with $9,284 million reported in 2020, rising to $11,321 million in 2021, dropping to $5,571 million in 2022, and climbing back to $10,806 million in 2025. The consistent spread between reported and adjusted income figures suggests an ongoing impact of income tax adjustments on profitability assessments.

Overall Observations

The data reveals cyclical trends with a pronounced dip around 2022 across all major financial metrics. This suggests an internal or external event affecting asset valuation, liabilities, equity, and profitability. Adjusted figures consistently indicate more conservative financial positions compared to reported data, particularly concerning equity and net income. Recovery post-2022 is evident across the board, with strong growth in assets and improvement in equity and income by 2025. The alignment of adjusted and reported trends indicates robustness in the underlying financial activities despite the adjustments related to deferred income tax or other accounting considerations.

The analysis of the reported and deferred income tax adjusted financial data reveals several notable trends and insights into the company's performance over the periods presented.

Net Profit Margin

The reported net profit margin exhibits a peak in the fiscal year ending May 2021 at 33.96%, followed by a significant decline in 2022 to 15.83%. Subsequently, it shows a gradual recovery, reaching 21.68% by May 2025. The adjusted net profit margin follows a similar pattern, peaking at 27.97% in 2021, dropping sharply to 13.13% in 2022, then steadily rising to 18.83% by 2025. This indicates volatility in profitability with partial recovery over time, and the adjusted figures consistently remain below the reported values, reflecting the impact of deferred tax adjustments.

Total Asset Turnover

The reported total asset turnover fluctuates within a narrow range, starting at 0.34 in 2020, dipping to 0.31 in 2021, increasing to 0.39 in 2022, and then slightly declining to 0.34 by 2025. Conversely, the adjusted total asset turnover shows higher values, peaking at 0.44 in 2022 before declining to 0.37 in 2025. Both metrics suggest moderate improvements in asset utilization efficiencies around 2022, with a slight decline thereafter, although the adjusted ratio consistently outperforms the reported, implying better operational efficiency when adjusted for tax timing differences.

Financial Leverage

The reported financial leverage ratio demonstrates extreme volatility, starting from 9.56 in 2020, spiking dramatically to 25.03 in 2021, then showing an anomalous peak at 125.24 in 2023 before falling back to 8.23 by 2025. The adjusted financial leverage ratio is recorded less frequently but shows a remarkable spike to 1046.37 in 2024, indicating significant debt or equity structure changes during that period. These volatile leverage ratios highlight periods of substantial financial restructuring or changes in capital structure, with possible effects from deferred tax considerations affecting reported versus adjusted figures differently.

Return on Equity (ROE)

Reported ROE follows a similar pattern of volatility, with extremely high values including a peak of 262.43% in 2021 and a staggering 792.45% in 2023 before declining to 60.84% by 2025. Adjusted ROE data is sparser but shows an extraordinary peak at 6770.73% in 2024 and a sharp decrease to 105.91% in 2025. These figures suggest extraordinary returns in certain years, potentially due to non-recurring items, high leverage effects, or tax adjustments that dramatically amplify equity returns. The wide divergence between reported and adjusted ROE in specific years underscores the significant impact of tax-related adjustments on equity profitability assessment.

Return on Assets (ROA)

The reported ROA shows more stability, ranging from 8.78% in 2020 to a low of 6.15% in 2022, then modestly improving to around 7.39% by 2025. The adjusted ROA presents a slightly lower trajectory but mirrors the overall trend, declining from 8.28% in 2020 to 5.19% in 2023 before increasing to 6.91% in 2025. This indicates consistent asset-based profitability with moderate fluctuations, and less pronounced differences between reported and adjusted figures, suggesting asset efficiency remains relatively stable despite tax timing effects.

Overall, the data reflect significant volatility in profitability and leverage metrics, particularly in return on equity and financial leverage, driven in part by deferred tax adjustments. Profit margins and asset turnover exhibit moderate fluctuations but show signs of recovery toward the end of the observed period. The contrasting trends between reported and adjusted metrics highlight the substantial role of deferred income tax in shaping the financial profile and performance evaluation of the company.

Reported Net Income

The reported net income initially increased significantly from approximately 10,135 million USD in 2020 to 13,746 million USD in 2021, representing strong growth. However, a notable decline occurred in 2022, with the figure roughly halving to 6,717 million USD. Subsequently, there was a steady recovery with net income rising to 8,503 million USD in 2023, then to 10,467 million USD in 2024, and reaching 12,443 million USD in 2025. This pattern indicates a sharp downturn followed by consistent improvement over the latter years.

Adjusted Net Income

Adjusted net income follows a somewhat similar trajectory to reported net income but remains consistently lower across all periods. It rose from 9,284 million USD in 2020 to 11,321 million USD in 2021. A significant drop occurred in 2022 to 5,571 million USD, even more pronounced compared to the reported net income decline. From 2023 onwards, adjusted net income exhibited gradual recovery, increasing to 6,336 million USD, then to 8,328 million USD in 2024, and finally to 10,806 million USD in 2025. This trend highlights the impact of adjustments on income figures and the gradual financial stabilization following the dip.

Reported Net Profit Margin

The reported net profit margin expanded notably from 25.94% in 2020 to a peak of 33.96% in 2021, indicating improved profitability relative to revenue. A sharp contraction followed in 2022 when the margin dropped by more than half to 15.83%. The margin subsequently improved over the next three years, increasing to 17.02% in 2023, then 19.76% in 2024, and further to 21.68% in 2025. Despite the recovery, the margin in 2025 remains below the peak levels seen in 2021.

Adjusted Net Profit Margin

The adjusted net profit margin mirrored the pattern observed in the reported margin but at somewhat reduced levels. It grew from 23.76% in 2020 to 27.97% in 2021 before declining sharply to 13.13% in 2022. From 2023 forward, adjusted margin increments were moderate, increasing to 12.68% in 2023, 15.72% in 2024, and 18.83% in 2025. This series reflects the influence of adjustments on profitability metrics and suggests a more conservative view of underlying profitability compared to reported figures.

Summary Insights

Overall, the financial data indicates a pronounced profitability and income peak in the year ending May 31, 2021, followed by a marked downturn in 2022 affecting both reported and adjusted metrics. Subsequent years reveal a steady improvement trend, though full recovery to or above the earlier peak levels has not been unanimously achieved by 2025. The adjusted figures systematically present a subdued perspective relative to reported ones, underscoring the effect of deferred income tax adjustments or other accounting modifications on the income statement. The net profit margins affirm the pattern seen in net incomes, highlighting changes in operational profitability across this period.

The analysis of the financial data spanning from May 31, 2020, to May 31, 2025, reveals several noteworthy trends in reported and adjusted total assets, as well as their respective asset turnover ratios.

Total Assets

Reported total assets show an overall growth trajectory, increasing from US$115,438 million in 2020 to US$168,361 million in 2025. This represents a significant expansion in asset base over the five-year period, despite a notable dip in 2022 where reported assets decreased to US$109,297 million before rebounding sharply in the subsequent years.

Adjusted total assets follow a similar pattern but consistently present lower values than reported assets, reflecting the impact of adjustments for deferred income tax or other factors. Adjusted assets decrease more markedly in 2022, falling to US$96,515 million, and then rise steadily to reach US$156,484 million by 2025. This suggests that the adjustments have a material effect on perceived asset values, particularly during periods of volatility.

Total Asset Turnover

The reported total asset turnover ratio exhibits slight fluctuations over the period, beginning at 0.34 in 2020, dipping to 0.31 in 2021, peaking at 0.39 in 2022, and then stabilizing around 0.37 to 0.38 before declining to 0.34 in 2025. The pattern indicates variability in how efficiently the company utilizes its assets to generate revenue, with 2022 as an outlier year showing a temporary increase in turnover efficiency despite lower asset levels.

The adjusted total asset turnover ratio mirrors the trends observed in the reported figures but generally reports higher efficiency levels. Starting at 0.35 in 2020, the ratio climbs steadily to a peak of 0.44 in 2022, then slightly decreases to 0.41 in 2023 and 2024, and declines more noticeably to 0.37 in 2025. This suggests that after adjustments, the company appears to use its assets more effectively to generate revenue, with 2022 being the year of optimal turnover efficiency.

Overall, the data suggests that while the company has experienced fluctuations in asset levels, the long-term trend is one of asset growth accompanied by variable efficiency in asset utilization. The adjustments to total assets and their turnovers highlight the importance of considering deferred income tax and related factors when evaluating the company's operational effectiveness and financial position over time.

The data reveals significant fluctuations in the total assets, stockholders' equity, and financial leverage across the reported and adjusted measures over the six-year period. Both reported and adjusted total assets show an overall increasing trend, with reported total assets rising from approximately 115 billion USD in 2020 to about 168 billion USD in 2025, and adjusted total assets experiencing a similar trajectory from around 112 billion USD to 156 billion USD in the same timeframe. However, the adjusted total assets exhibit more volatility, with a notable dip in 2022.

Stockholders' equity demonstrates considerable instability. The reported stockholders’ equity moves from a positive 12 billion USD in 2020 down to a negative value by 2022, before recovering to nearly 20.5 billion USD in 2025. The adjusted equity follows a similar pattern but shows deeper negative values, reaching nearly -13 billion USD in 2022 and only marginally positive by 2024, before increasing sharply in 2025. This suggests that adjustments related to deferred income tax and other factors significantly impact the equity figures, highlighting periods of financial strain or revaluation.

Financial leverage ratios, which indicate the extent of debt relative to equity, show dramatic variability. The reported financial leverage increases sharply by 2023, peaking at over 125 times, before declining to 8.23 times in 2025. The adjusted financial leverage, although partially incomplete, reveals a remarkable spike to above 1000 times in 2024, pointing to an exceptionally high level of indebtedness or very low equity in that year. The trends suggest periods of heightened financial risk and leverage, particularly when adjusted for deferred tax impacts.

Overall, the analysis indicates substantial volatility in the company’s capital structure and financial health across the periods, with marked differences between reported and adjusted figures. The fluctuations in equity and leverage ratios imply that deferred income tax adjustments play a crucial role in the financial presentation and risk assessment. The recovery in equity and reduction in leverage towards 2025 may reflect strategic efforts to strengthen the balance sheet and stabilize financial leverage.

Total Assets

Reported and adjusted values show growth despite volatility, with adjusted assets dropping significantly in 2022 before resuming upward trends.

Stockholders’ Equity

Significant declines mid-period with negative values coincide with adjustments. Recovery occurs in later years but adjusted equity remains more volatile and lower than reported equity overall.

Financial Leverage

Extremely high leverage ratios are observed in specific years, particularly in 2023 and 2024, indicating substantial reliance on debt relative to equity, more pronounced in the adjusted data.

Financial Health Implications

Periods of negative adjusted equity and extreme leverage underscore potential financial distress or accounting impacts. The trends towards normalization by 2025 suggest improving financial stability.

The analysis of the reported and adjusted financial data over the examined periods reveals notable fluctuations and discernible trends in net income, stockholders’ equity, and return on equity (ROE).

Net Income Trends

The reported net income exhibited significant variability across the years. It increased markedly from approximately 10.1 billion USD in 2020 to a peak of around 13.7 billion USD in 2021, then sharply declined to approximately 6.7 billion USD in 2022. Following this trough, reported net income recovered steadily, reaching about 12.4 billion USD by 2025. The adjusted net income followed a similar overall pattern but displayed consistently lower values than the reported figures, indicating the impact of adjustments such as deferred income tax or other non-recurring items. The adjusted net income declined from about 9.3 billion USD in 2020 to roughly 5.6 billion USD in 2022, followed by a gradual increase to approximately 10.8 billion USD in 2025.

Stockholders’ Equity Patterns

The reported total stockholders’ equity showed significant volatility, especially notable is the swing into negative territory in 2022, with a deficit of about 6.2 billion USD, before recovering to positive levels in subsequent years up to around 20.5 billion USD in 2025. The adjusted stockholders’ equity data also reflected a similar volatile trend but with more pronounced negative values during 2021 through 2023, reaching a low near 13 billion USD negative in 2022. Recovery in adjusted equity was slower and less pronounced in the early years after the deficit, turning marginally positive by 2024 and improving to around 10.2 billion USD by 2025. This suggests substantial adjustments affecting equity measurements and indicates periods of financial strain followed by stabilization and growth.

Return on Equity (ROE)

Reported ROE percentages demonstrated extreme fluctuations, with values peaking at extraordinarily high levels in 2021 (262.43%) and 2023 (792.45%), then declining to a more moderate level of approximately 60.8% by 2025. The absence of data for 2022 and 2024 complicates trend interpretation during those years. Adjusted ROE values are sparse, but notable is an exceptionally high adjusted ROE of 6770.73% reported for 2024, suggesting potentially anomalous or highly leveraged periods in adjusted terms. By 2025, the adjusted ROE normalized to about 105.9%, still reflecting strong profitability relative to equity.

Overall, the data illustrates a period of considerable financial volatility, with sharp declines followed by recoveries in both income and equity measures. Adjustments related to deferred tax and other factors have a significant impact on reported versus adjusted figures, particularly apparent in equity and ROE metrics. The elevated ROE values, especially in adjusted terms, should be further analyzed to understand underlying drivers such as changes in capital structure or one-time events influencing profitability relative to equity.

Net Income Trends

Both reported and adjusted net income exhibit a generally positive trajectory over the observed periods with some fluctuations. Reported net income increased from 10,135 million USD in 2020 to a peak of 13,746 million USD in 2021, followed by a sharp decline to 6,717 million USD in 2022. It then recovered steadily, reaching 12,443 million USD by 2025. Adjusted net income followed a similar pattern, peaking in 2021 at 11,321 million USD before dropping significantly in 2022 to 5,571 million USD and then rising again to 10,806 million USD in 2025. The adjustments consistently show lower net income values compared to the reported figures, reflecting the impact of income tax adjustments.

Total Assets Trends

Reported total assets displayed an overall growth from 115,438 million USD in 2020 to 168,361 million USD in 2025, despite a dip observed in 2022 when assets declined to 109,297 million USD. From 2023 onwards, total assets expanded significantly, surpassing previous highs each year. Adjusted total assets reveal a similar trend, increasing from 112,186 million USD in 2020 to 156,484 million USD by 2025, with a notable decrease in 2022 to 96,515 million USD before recovering. The adjusted figures are consistently below the reported total assets, likely due to the exclusion or reclassification of deferred tax assets.

Return on Assets (ROA) Analysis

Reported ROA peaked at 10.48% in 2021 before dropping sharply to 6.15% in 2022. It showed gradual improvement thereafter but remained below the 2021 peak, ending at 7.39% in 2025. Adjusted ROA demonstrated a parallel pattern, peaking at 9.64% in 2021, declining more steeply to 5.77% in 2022, and then recovering to 6.91% by 2025. The adjusted ROA values are consistently lower than the reported ROA, consistent with the lower adjusted net income and asset values.

Overall Observations

The data reveals that the company experienced a notable dip in profitability and asset base in 2022 across both reported and adjusted measures. This could indicate operational challenges or the impact of one-time events during that year. However, a strong recovery trend is observed in subsequent years up to 2025. The difference between reported and adjusted figures suggests that deferred income taxes have a meaningful impact on the company's financial metrics, with adjustments lowering net income, total assets, and ROA consistently. This adjustment provides a more conservative view of the company's profitability and asset efficiency.