OracleORCL

01The increase in remaining performance obligations as of May 31, 2026 in comparison to May 31, 2025 was primarily attributable to certain significant cloud contracts that were entered into during the period. Cloud revenues represented 51%, 43% and 37% of our total revenues during fiscal 2026, 2025 and 2024, respectively. We expect these trends to continue.

02Large customers are now paying billions upfront for multi-year cloud capacity, indicating elevated commitment and high switching costs once capacity is provisioned. The $4.6 billion in prepayments—none existed in prior years—demonstrates a step-change in customer lock-in and de-risks Oracle's capital-intensive buildout by aligning cash inflows closer to capex timing.

03Cash used for capital expenditures increased from $21.2 billion in fiscal 2025 to $55.7 billion in fiscal 2026 primarily due to the expansion of our data centers. We expect this upward trend to continue during fiscal 2027 and in the following fiscal years as we increase our existing data center capacity and establish data centers in new geographic locations in order to meet current and expected customer demand for our cloud offerings. Our cloud infrastructure revenues represented 53%, 42% and 35% of our total cloud revenues during fiscal 2026, 2025 and 2024, respectively.

04Oracle can deploy its proprietary database inside competitors' clouds (Azure, AWS, Google Cloud) via multicloud and Exadata Cloud@Customer, turning rivals into distribution channels. This hybrid positioning lets Oracle capture workloads that cannot migrate fully to a single hyperscaler, sustaining database pricing power even as customers diversify their cloud estates.