Sector: Information Technology | Focus: Application Software
HQ: Austin, Texas
Financial Risks
Oracle faces risks from ongoing tax audits (domestic and international), derivative litigation concerning its cloud business, and a Netherlands privacy class action lawsuit. Potential losses from these legal proceedings are uncertain and could exceed already recognized amounts. The company's non-marketable investments, primarily in Ampere, are subject to credit losses and impairment reviews, and Ampere has historically generated net losses. Fluctuations in foreign currency exchange rates also impact revenue and expense recognition.
Financial Upside
Oracle anticipates continued growth in cloud services and license support revenues, driven by expected customer demand and contract renewals. The company's cloud and license business is expected to increase, and the proportion of cloud services revenue is projected to rise. Oracle has significant cash on hand and access to additional borrowing, which could fund acquisitions, dividends, and stock repurchases. The company's restructuring plan aims to improve operational efficiencies and cost savings.
