ORCLOracle Corporation

If we are unable to secure data center capacity at affordable rates or do not accurately plan for and manage our infrastructure capacity requirements, our profitability may decline. As a part of To grow our Oracle Cloud strategy, OCI business, which requires increased computing capacity, we plan our investment levels based on estimates of future revenues must incur significant capital and customer demand and future anticipated rates of growth. In recent periods, our cloud services and license support expenses have grown to meet current and expected demand for our cloud offerings, including investments operating expenditures to increase our existing data center capacity and to establish data centers in new geographic locations. In connection with these investments, we have entered, and expect to continue to enter, into long-term lease commitments with third-party data center providers and other significant commitments with suppliers of chips and other data center infrastructure. If we underestimate customer demand or our data center capacity needs, we may face shortages of available infrastructure, limiting our ability to support customer growth and potentially causing us to lose business to competitors. Conversely, if we overestimate customer demand or any of our data center capacity needs, we could be locked into multi-year commitments for excess data center space, resulting in lower profitability and cash flows because our third-party data center vendors generally require us key customers are unable to pay significant contract termination fees to early exit such obligations. 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. We have faced, and may continue to face, rising costs for data center energy demands. 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 or the inability to meet customer demand 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. We typically depreciate these assets over their estimated useful lives, which could be shortened should our cloud strategies change, which could adversely affect our profitability.

costs, of $13.9 billion and was primarily due to proceeds from the issuance of commercial paper, senior notes, net of repayments, issuance costs, of $1.9 $42.7 billion during fiscal 2025 (refer to Note 6 of Notes to Consolidated Financial Statements included elsewhere in this Annual Report for additional information); and $1.1 2026; $32.0 billion of cash inflows from other our operations; $5.0 billion of cash proceeds from the issuance of Mandatory Convertible Preferred Stock, net of issuance costs; $4.9 billion of cash inflows from the sale of our investments, primarily in Ampere; $3.3 billion of cash inflows from short-term financing activities, net. This increase was related to capital expenditures, net; and $1.3 billion of net cash provided by our employee stock programs, partially offset by $21.2 $55.7 billion of cash used for capital expenditures; $10.2 billion of cash used for scheduled repayments of borrowings; $4.7 $5.8 billion of cash used to pay dividends to our common and preferred stockholders; $600 $5.0 billion of cash used for scheduled repayments of debt; $851 million of cash used for repayment of commercial paper, net; $337 million of cash outflows for other financing activities, net; $864 million of cash used for purchases of non-current investments; and $95 million of cash used for repurchases of our common stock; $496 million of cash used for purchases, net of sales and maturities of investments; and $247 million of net cash used for our employee stock programs stock, in each case during fiscal 2025. 2026. Our cash and cash equivalents may be impacted by some or all of the aforementioned factors in future periods, the amounts and timing of which are variable.