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Consolidated Statements of Cash Flows
(In millions)
| | Year Ended |
| | Jan 26, 2025 | | Jan 28, 2024 | | Jan 29, 2023 |
| Cash flows from operating activities: | | | | | |
| Net income | $ | 72,880 | | | $ | 29,760 | | | $ | 4,368 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | |
| Stock-based compensation expense | 4,737 | | | 3,549 | | | 2,709 | |
| Depreciation and amortization | 1,864 | | | 1,508 | | | 1,544 | |
| Deferred income taxes | ( 4,477 ) | | | ( 2,489 ) | | | ( 2,164 ) | |
| (Gains) losses on non-marketable equity securities and publicly-held equity securities, net | ( 1,030 ) | | | ( 238 ) | | | 45 | |
| Acquisition termination cost | — | | | — | | | 1,353 | |
| Other | ( 502 ) | | | ( 278 ) | | | ( 7 ) | |
| Changes in operating assets and liabilities, net of acquisitions: | | | | | |
| Accounts receivable | ( 13,063 ) | | | ( 6,172 ) | | | 822 | |
| Inventories | ( 4,781 ) | | | ( 98 ) | | | ( 2,554 ) | |
| Prepaid expenses and other assets | ( 395 ) | | | ( 1,522 ) | | | ( 1,517 ) | |
| Accounts payable | 3,357 | | | 1,531 | | | ( 551 ) | |
| Accrued and other current liabilities | 4,278 | | | 2,025 | | | 1,341 | |
| Other long-term liabilities | 1,221 | | | 514 | | | 252 | |
| Net cash provided by operating activities | 64,089 | | | 28,090 | | | 5,641 | |
| Cash flows from investing activities: | | | | | |
| Proceeds from maturities of marketable securities | 11,195 | | | 9,732 | | | 19,425 | |
| Proceeds from sales of marketable securities | 495 | | | 50 | | | 1,806 | |
| Proceeds from sales of non-marketable equity securities | 171 | | | 1 | | | 8 | |
| Purchases of marketable securities | ( 26,575 ) | | | ( 18,211 ) | | | ( 11,897 ) | |
| Purchases related to property and equipment and intangible assets | ( 3,236 ) | | | ( 1,069 ) | | | ( 1,833 ) | |
| Purchases of non-marketable equity securities | ( 1,486 ) | | | ( 862 ) | | | ( 85 ) | |
| Acquisitions, net of cash acquired | ( 1,007 ) | | | ( 83 ) | | | ( 49 ) | |
| Other | 22 | | | ( 124 ) | | | — | |
| Net cash provided by (used in) investing activities | ( 20,421 ) | | | ( 10,566 ) | | | 7,375 | |
| Cash flows from financing activities: | | | | | |
| Proceeds related to employee stock plans | 490 | | | 403 | | | 355 | |
| Payments related to repurchases of common stock | ( 33,706 ) | | | ( 9,533 ) | | | ( 10,039 ) | |
| Payments related to tax on restricted stock units | ( 6,930 ) | | | ( 2,783 ) | | | ( 1,475 ) | |
| Repayment of debt | ( 1,250 ) | | | ( 1,250 ) | | | — | |
| Dividends paid | ( 834 ) | | | ( 395 ) | | | ( 398 ) | |
| Principal payments on property and equipment and intangible assets | ( 129 ) | | | ( 74 ) | | | ( 58 ) | |
| Other | — | | | ( 1 ) | | | ( 2 ) | |
| Net cash used in financing activities | ( 42,359 ) | | | ( 13,633 ) | | | ( 11,617 ) | |
| Change in cash and cash equivalents | 1,309 | | | 3,891 | | | 1,399 | |
| Cash and cash equivalents at beginning of period | 7,280 | | | 3,389 | | | 1,990 | |
| Cash and cash equivalents at end of period | $ | 8,589 | | | $ | 7,280 | | | $ | 3,389 | |
| Supplemental disclosures of cash flow information: | | | | | |
| Cash paid for income taxes, net | $ | 15,118 | | | $ | 6,549 | | | $ | 1,404 | |
| Cash paid for interest | $ | 246 | | | $ | 252 | | | $ | 254 | |
See accompanying Notes to the Consolidated Financial Statements.
|
{
"ticker": "NVDA",
"year": "2025",
"source": "NVDA_10K_2025-01-26.html"
}
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| 2
|
(In millions)
| | Year Ended |
| | Jan 26, 2025 | | Jan 28, 2024 | | Jan 29, 2023 |
| Cash flows from operating activities: | | | | | |
| Net income | $ | 72,880 | | | $ | 29,760 | | | $ | 4,368 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | |
| Stock-based compensation expense | 4,737 | | | 3,549 | | | 2,709 | |
| Depreciation and amortization | 1,864 | | | 1,508 | | | 1,544 | |
| Deferred income taxes | ( 4,477 ) | | | ( 2,489 ) | | | ( 2,164 ) | |
| (Gains) losses on non-marketable equity securities and publicly-held equity securities, net | ( 1,030 ) | | | ( 238 ) | | | 45 | |
| Acquisition termination cost | — | | | — | | | 1,353 | |
| Other | ( 502 ) | | | ( 278 ) | | | ( 7 ) | |
| Changes in operating assets and liabilities, net of acquisitions: | | | | | |
| Accounts receivable | ( 13,063 ) | | | ( 6,172 ) | | | 822 | |
| Inventories | ( 4,781 ) | | | ( 98 ) | | | ( 2,554 ) | |
| Prepaid expenses and other assets | ( 395 ) | | | ( 1,522 ) | | | ( 1,517 ) | |
| Accounts payable | 3,357 | | | 1,531 | | | ( 551 ) | |
| Accrued and other current liabilities | 4,278 | | | 2,025 | | | 1,341 | |
| Other long-term liabilities | 1,221 | | | 514 | | | 252 | |
| Net cash provided by operating activities | 64,089 | | | 28,090 | | | 5,641 | |
| Cash flows from investing activities: | | | | | |
| Proceeds from maturities of marketable securities | 11,195 | | | 9,732 | | | 19,425 | |
| Proceeds from sales of marketable securities | 495 | | | 50 | | | 1,806 | |
| Proceeds from sales of non-marketable equity securities | 171 | | | 1 | | | 8 | |
| Purchases of marketable securities | ( 26,575 ) | | | ( 18,211 ) | | | ( 11,897 ) | |
| Purchases related to property and equipment and intangible assets | ( 3,236 ) | | | ( 1,069 ) | | | ( 1,833 ) | |
| Purchases of non-marketable equity securities | ( 1,486 ) | | | ( 862 ) | | | ( 85 ) | |
| Acquisitions, net of cash acquired | ( 1,007 ) | | | ( 83 ) | | | ( 49 ) | |
| Other | 22 | | | ( 124 ) | | | — | |
| Net cash provided by (used in) investing activities | ( 20,421 ) | | | ( 10,566 ) | | | 7,375 | |
| Cash flows from financing activities: | | | | | |
| Proceeds related to employee stock plans | 490 | | | 403 | | | 355 | |
| Payments related to repurchases of common stock | ( 33,706 ) | | | ( 9,533 ) | | | ( 10,039 ) | |
| Payments related to tax on restricted stock units | ( 6,930 ) | | | ( 2,783 ) | | | ( 1,475 ) | |
| Repayment of debt | ( 1,250 ) | | | ( 1,250 ) | | | — | |
| Dividends paid | ( 834 ) | | | ( 395 ) | | | ( 398 ) | |
| Principal payments on property and equipment and intangible assets | ( 129 ) | | | ( 74 ) | | | ( 58 ) | |
| Other | — | | | ( 1 ) | | | ( 2 ) | |
| Net cash used in financing activities | ( 42,359 ) | | | ( 13,633 ) | | | ( 11,617 ) | |
| Change in cash and cash equivalents | 1,309 | | | 3,891 | | | 1,399 | |
| Cash and cash equivalents at beginning of period | 7,280 | | | 3,389 | | | 1,990 | |
| Cash and cash equivalents at end of period | $ | 8,589 | | | $ | 7,280 | | | $ | 3,389 | |
| Supplemental disclosures of cash flow information: | | | | | |
| Cash paid for income taxes, net | $ | 15,118 | | | $ | 6,549 | | | $ | 1,404 | |
| Cash paid for interest | $ | 246 | | | $ | 252 | | | $ | 254 | |
See accompanying Notes to the Consolidated Financial Statements.
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|
{
"ticker": "NVDA",
"year": "2025",
"source": "NVDA_10K_2025-01-26.html"
}
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We use the U.S. dollar as our functional currency for our subsidiaries. Foreign currency monetary assets and liabilities are remeasured into United States dollars at end-of-period exchange rates. Non-monetary assets and liabilities such as property and equipment and equity are remeasured at historical exchange rates. Revenue and expenses are remeasured at exchange rates in effect during each period, except for those expenses related to non-monetary balance sheet amounts, which are remeasured at historical exchange rates. Gains or losses from foreign currency remeasurement are included in earnings in our Consolidated Statements of Income and to date have not been significant.
Income Taxes
We recognize federal, state and foreign current tax liabilities or assets based on our estimate of taxes payable or refundable in the current fiscal year by tax jurisdiction. We recognize federal, state and foreign deferred tax assets or liabilities, as appropriate, for our estimate of future tax effects attributable to temporary differences and carryforwards; and we record a valuation allowance to reduce any deferred tax assets by the amount of any tax benefits that, based on available evidence and judgment, are not expected to be realized.
Our calculation of deferred tax assets and liabilities is based on certain estimates and judgments and involves dealing with uncertainties in the application of complex tax laws. Our estimates of deferred tax assets and liabilities may change based, in part, on added certainty or finality to an anticipated outcome, changes in accounting standards or tax laws in the U.S., or foreign jurisdictions where we operate, or changes in other facts or circumstances. In addition, we recognize liabilities for potential U.S. and foreign income tax contingencies based on our estimate of whether, and the extent to which, additional taxes may be due. If we determine that payment of these amounts is unnecessary or if the recorded tax liability is less than our current assessment, we may be required to recognize an income tax benefit or additional income tax expense in our financial statements accordingly.
As of January 26, 2025, we had a valuation allowance of $
1.6
billion related to capital loss carryforwards, and certain state and other deferred tax assets that management determined are not likely to be realized due, in part, to jurisdictional projections of future taxable income, including capital gains. To the extent realization of the deferred tax assets becomes more-likely-than-not, we would recognize such deferred tax assets as income tax benefits during the period.
We recognize the benefit from a tax position only if it is more-likely-than-not that the position would be sustained upon audit based solely on the technical merits of the tax position. Our policy is to include interest and penalties related to unrecognized tax benefits as a component of income tax expense.
Net Income Per Share
Basic net income per share is computed using the weighted average number of common shares outstanding during the period. Diluted net income per share is computed using the weighted average number of common and potentially dilutive shares outstanding during the period, using the treasury stock method. Any anti-dilutive effect of equity awards outstanding is not included in the computation of diluted net income per share.
Cash and Cash Equivalents and Marketable Securities
We consider all highly liquid investments that are readily convertible into cash and have an original maturity of three months or less at the time of purchase to be cash equivalents. Marketable securities consist of highly liquid debt investments with maturities of greater than three months when purchased and publicly-held equity securities. We classify these investments as current based on the nature of the investments and their availability for use in current operations.
|
{
"ticker": "NVDA",
"year": "2025",
"source": "NVDA_10K_2025-01-26.html"
}
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|
Goodwill is subject to our annual impairment test during the fourth quarter of our fiscal year, or earlier if indicators of potential impairment exist. In completing our impairment test, we perform either a qualitative or a quantitative analysis on a reporting unit basis.
Qualitative factors include industry and market considerations, overall financial performance, and other relevant events and factors affecting the reporting units.
The quantitative impairment test considers both the income approach and the market approach to estimate a reporting unit's fair value. The income and market valuation approaches consider factors that include, but are not limited to, prospective financial information, growth rates, residual values, discount rates and comparable multiples from publicly traded companies in our industry and require us to make certain assumptions and estimates regarding industry economic factors and the future profitability of our business.
Intangible Assets and Other Long-Lived Assets
Intangible assets primarily represent acquired intangible assets including developed technology and customer relationships, as well as rights acquired under technology licenses, patents, and acquired IP. We currently amortize our intangible assets with finite lives over periods ranging from
one
to
twenty years
using a method that reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up or, if that pattern cannot be reliably determined, using a straight-line amortization method.
Long-lived assets, such as property and equipment and intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. The recoverability of assets or asset groups to be held and used is measured by a comparison of the carrying amount of an asset or asset group to estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset or asset group exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset or asset group exceeds the estimated fair value of the asset or asset group. Fair value is determined based on the estimated discounted future cash flows expected to be generated by the asset or asset group. Assets and liabilities to be disposed of would be separately presented in the Consolidated Balance Sheet and the assets would be reported at the lower of the carrying amount or fair value less costs to sell, and would no longer be depreciated.
Business Combination
We allocate the fair value of the purchase price of an acquisition to the tangible assets acquired, liabilities assumed, and intangible assets acquired, based on their estimated fair values. The excess of the fair value of the purchase price over the fair values of these net tangible and intangible assets acquired is recorded as goodwill. Management's estimates of fair value are based upon assumptions believed to be reasonable, but our estimates and assumptions are inherently uncertain and subject to refinement. The estimates and assumptions used in valuing intangible assets include, but are not limited to, the amount and timing of projected future cash flows, discount rate used to determine the present value of these cash flows and asset lives. These estimates are inherently uncertain and, therefore, actual results may differ from the estimates made. As a result, during the measurement period of up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the measurement period's conclusion or final determination of the fair value of the purchase price of an acquisition, whichever comes first, any subsequent adjustments are recorded to our Consolidated Statements of Income.
Acquisition-related expenses are recognized separately from the business combination and expensed as incurred.
Non-Marketable Equity Securities
|
{
"ticker": "NVDA",
"year": "2025",
"source": "NVDA_10K_2025-01-26.html"
}
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| 3
|
Note 4 -
Net Income Per Share
The following is a reconciliation of the denominator of the basic and diluted net income per share computations for the periods presented:
| | Year Ended |
| | Jan 26, 2025 | | Jan 28, 2024 | | Jan 29, 2023 |
| | (In millions, except per share data) |
| Numerator: | | | | | |
| Net income | $ | 72,880 | | | $ | 29,760 | | | $ | 4,368 | |
| Denominator: | | | | | |
| Basic weighted average shares | 24,555 | | | 24,690 | | | 24,870 | |
| Dilutive impact of outstanding equity awards | 249 | | | 250 | | | 200 | |
| Diluted weighted average shares | 24,804 | | | 24,940 | | | 25,070 | |
| Net income per share: | | | | | |
| Basic (1) | $ | 2.97 | | | $ | 1.21 | | | $ | 0.18 | |
| Diluted (2) | $ | 2.94 | | | $ | 1.19 | | | $ | 0.17 | |
| Anti-dilutive equity awards excluded from diluted net income per share | 51 | | | 150 | | | 400 | |
(1) Net income divided by basic weighted average shares.
(2) Net income divided by diluted weighted average shares.
Note 5 -
Goodwill
As of January 26, 2025, the total carrying amount of goodwill was $
5.2
billion, consisting of goodwill balances allocated to our Compute & Networking and Graphics reporting units of $
4.8
billion and $
370
million, respectively. As of January 28, 2024, the total carrying amount of goodwill was $
4.4
billion, consisting of goodwill balances allocated to our Compute & Networking and Graphics reporting units of $
4.1
billion and $
370
million, respectively. Goodwill increased by $
758
million in fiscal year 2025 from acquisitions and was allocated to our Compute & Networking reporting unit. During the fourth quarters of fiscal years 2025, 2024, and 2023, we completed our annual qualitative impairment tests and concluded that goodwill was
no
t impaired.
Note 6 -
Amortizable Intangible Assets
The components of our amortizable intangible assets are as follows:
|
{
"ticker": "NVDA",
"year": "2025",
"source": "NVDA_10K_2025-01-26.html"
}
| 585
| 3
|
Note 11 -
Debt
Long-Term Debt
| | | Expected Remaining Term (years) | | Effective Interest Rate | | Jan 26, 2025 | | Jan 28, 2024 |
| | | | | | | (In millions) |
| 0.584 % Notes Due 2024 (1) | | — | | 0.66 % | | $ | — | | | $ | 1,250 | |
| 3.20 % Notes Due 2026 | | 1.6 | | 3.31 % | | 1,000 | | | 1,000 | |
| 1.55 % Notes Due 2028 | | 3.4 | | 1.64 % | | 1,250 | | | 1,250 | |
| 2.85 % Notes Due 2030 | | 5.2 | | 2.93 % | | 1,500 | | | 1,500 | |
| 2.00 % Notes Due 2031 | | 6.4 | | 2.09 % | | 1,250 | | | 1,250 | |
| 3.50 % Notes Due 2040 | | 15.2 | | 3.54 % | | 1,000 | | | 1,000 | |
| 3.50 % Notes Due 2050 | | 25.2 | | 3.54 % | | 2,000 | | | 2,000 | |
| 3.70 % Notes Due 2060 | | 35.2 | | 3.73 % | | 500 | | | 500 | |
| Unamortized debt discount and issuance costs | | | | | | ( 37 ) | | | ( 41 ) | |
| Net carrying amount | | | | | | 8,463 | | | 9,709 | |
| Less short-term portion | | | | | | — | | | ( 1,250 ) | |
| Total long-term portion | | | | | | $ | 8,463 | | | $ | 8,459 | |
(1) In fiscal year 2025, we repaid the
0.584
% Notes Due 2024.
Our notes are unsecured senior obligations. Existing and future liabilities of our subsidiaries will be effectively senior to the notes. Our notes pay interest semi-annually. We may redeem each of our notes prior to maturity, subject to a make-whole premium. The maturity of the notes is calendar year.
As of January 26, 2025, we complied with the required covenants, which are non-financial in nature, under the outstanding notes.
Commercial Paper
We have a $
575
million commercial paper program to support general corporate purposes. As of January 26, 2025, we had
no
commercial paper outstanding.
Note 12 -
Commitments and Contingencies
Purchase Obligations
Our purchase obligations reflect our commitment to purchase components used to manufacture our products, including long-term supply and capacity agreements, certain software and technology licenses, other goods and services and long-lived assets.
As of January 26, 2025, we had outstanding inventory purchase and long-term supply and capacity obligations totaling $
30.8
|
{
"ticker": "NVDA",
"year": "2025",
"source": "NVDA_10K_2025-01-26.html"
}
| 783
| 2
|
million, respectively. The payment of future cash dividends is subject to our Board of Directors' continuing determination that the declaration of dividends is in the best interests of our shareholders.
Note 15 -
Employee Retirement Plans
We provide tax-qualified defined contribution plans to eligible employees in the U.S. and certain other countries. Our contribution expense for fiscal years 2025, 2024, and 2023 was $
314
million, $
255
million, and $
227
million, respectively.
Note 16 -
Segment Information
Our Chief Executive Officer is our chief operating decision maker, or CODM, and reviews financial information presented on an operating segment basis for purposes of making decisions and assessing financial performance. Our CODM assesses operating performance of each segment based on regularly provided segment revenue and segment operating income. Operating results by segment include costs or expenses directly attributable to each segment, and costs or expenses that are leveraged across our unified architecture and therefore allocated between our
two
segments. Our CODM reviews expenses on a consolidated basis, and expenses attributable to each segment are not regularly provided to our CODM.
The Compute & Networking segment includes our Data Center accelerated computing platforms and AI solutions and software; networking; automotive platforms and autonomous and electric vehicle solutions; Jetson for robotics and other embedded platforms; and DGX Cloud computing services.
The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; vGPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems; and Omniverse Enterprise software for building and operating industrial AI and digital twin applications.
The "All Other" category includes the expenses that are not allocated to either Compute & Networking or Graphics for purposes of making operating decisions or assessing financial performance. The expenses include stock-based compensation expense, corporate infrastructure and support costs, acquisition-related and other costs, and other non-recurring charges and benefits that our CODM deems to be enterprise in nature.
Our CODM does not review any information regarding total assets on a reportable segment basis. There are no intersegment transactions. The accounting policies for segment reporting are the same as for our consolidated financial statements.
The table below presents details of our reportable segments and the "All Other" category.
|
{
"ticker": "NVDA",
"year": "2025",
"source": "NVDA_10K_2025-01-26.html"
}
| 464
| 2
|
million, and $
315
million, respectively. Acquisition-related intangible amortization expense is not allocated to either Compute & Networking or Graphics for purposes of making operating decisions or assessing financial performance and is included in "All Other".
| | Year Ended |
| | Jan 26, 2025 | | Jan 28, 2024 | | Jan 29, 2023 |
| Reconciling items included in "All Other" category: | (In millions) |
| Stock-based compensation expense | $ | ( 4,737 ) | | | $ | ( 3,549 ) | | | $ | ( 2,710 ) | |
| Unallocated cost of revenue and operating expenses | ( 1,171 ) | | | ( 728 ) | | | ( 595 ) | |
| Acquisition-related and other costs | ( 602 ) | | | ( 583 ) | | | ( 674 ) | |
| Acquisition termination cost | — | | | — | | | ( 1,353 ) | |
| Other | 3 | | | ( 30 ) | | | ( 79 ) | |
| Total | $ | ( 6,507 ) | | | $ | ( 4,890 ) | | | $ | ( 5,411 ) | |
Revenue by geographic area is based upon the billing location of the customer. The end customer and shipping location may be different from our customer's billing location.
| | Year Ended |
| | Jan 26, 2025 | | Jan 28, 2024 | | Jan 29, 2023 |
| Geographic Revenue based upon Customer Billing Location: | (In millions) |
| United States | $ | 61,257 | | | $ | 26,966 | | | $ | 8,292 | |
| Singapore (1) | 23,684 | | | 6,831 | | | 2,288 | |
| Taiwan | 20,573 | | | 13,405 | | | 6,986 | |
| China (including Hong Kong) | 17,108 | | | 10,306 | | | 5,785 | |
| Other | 7,875 | | | 3,414 | | | 3,623 | |
| Total revenue | $ | 130,497 | | | $ | 60,922 | | | $ | 26,974 | |
(1) Singapore represented
18
% of fiscal year 2025 total revenue based upon customer billing location. Customers use Singapore to centralize invoicing while our products are almost always shipped elsewhere. Shipments to Singapore were less than
2
% of fiscal year 2025 total revenue.
Revenue from sales to customers outside of the United States accounted for
53
%,
56
%, and
69
% of total revenue for fiscal years 2025, 2024, and 2023, respectively. The increase in revenue to the United States for fiscal years 2025 and 2024 was primarily due to higher U.S.-based Compute & Networking segment demand.
We refer to customers who purchase products directly from NVIDIA as direct customers, such as AIBs, distributors, ODMs, OEMs, and system integrators. We have certain customers that may purchase products directly from NVIDIA and may use either internal resources or third-party system integrators to complete their build. We also have indirect customers, who purchase products through our direct customers; indirect customers include CSPs, consumer internet companies, enterprises, and public sector entities.
79
|
{
"ticker": "NVDA",
"year": "2025",
"source": "NVDA_10K_2025-01-26.html"
}
| 799
| 3
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the level of demand for our channel participants' products and services were to decrease.
We may not successfully maintain, expand or develop our relationships with channel participants. If we are not successful, we may lose sales opportunities, customers and revenues. In addition, we do not control channel participants, some of whom operate in jurisdictions with elevated corruption risks. Our compliance policies and procedures may fail to prevent or detect violations of anti-corruption or other laws, and channel participants may violate such laws, all of which could subject us to litigation or regulatory risk and result in liability.
Acquisitions present many risks and we may not achieve the financial and strategic goals that were contemplated at the time of a transaction.
We regularly review and consider strategic acquisitions of companies, products, services and technologies as a part of our corporate strategy, and we expect to continue making acquisitions in the future. However, our strategic acquisition program carries several risks, including but not limited to:
•
business disruption and management distraction due to acquisition, transition or integration activities;
•
challenges in managing acquired technologies or lines of business, entering new markets where we have no, or limited, direct prior experience or market positions, or retaining key personnel from the acquired companies;
21
Table of Contents
•
acquisitions that do not meet strategic expectations, including due to difficulties integrating acquired companies, negative impacts from imposed business practices or different go-to-market strategies, and the risk of overpaying or failing to realize expected returns 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;
•
negative financial impacts from (1) assumed claims or liabilities; (2) assumed costly or disruptive pre-existing contractual relationships; and (3) unfavorable revenue recognition or other accounting treatment as a result of an acquired company's business practices;
•
failure to identify or accurately assess significant liabilities or shortcomings prior to finalization of an acquisition;
•
failure to realize expected revenue growth from an acquisition for a number of reasons, including (1) more customers than expected declining to renew or terminating their contracts; (2) difficulty selling acquired products or service offerings to our customer base; (3) acquired customers declining to purchase our technologies due to differing business practices; or (4) contract models utilized by an acquired company conflicting with our revenue recognition methods;
•
integration difficulties, including aligning acquired compliance programs, technologies, products, services, supply chain operations, environmental practices or infrastructure with our existing lines of business;
•
product and service inconsistencies across multiple product lines or services offerings, leading to customer confusion and delays;
•
higher than anticipated costs related to supporting, developing and delivering acquired products or services, expanding general and administrative functions for new business models or complying with complex regulations applicable to an acquired business;
•
labor challenges, including difficulties obtaining timely approvals from works councils or similar bodies under applicable employment laws;
•
regulatory and judicial challenges, including delays or restrictions from governmental authorities under foreign direct investment, foreign subsidy, competition and antitrust laws, potentially requiring asset divestitures, other concessions or a termination of the acquisition process;
•
limitations on our potential other uses for our cash; and
•
financial constraints that may require us to incur additional debt to pay for acquisitions or 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 terms.
The occurrence of any of these risks could have a material adverse effect on our business, results of operations, financial condition or cash flows, particularly in the case of a larger acquisition or several concurrent acquisitions.
We are subject to risks with respect to environmental, social and governance (ESG) matters.
|
{
"ticker": "ORCL",
"year": "2025",
"source": "ORCL_10K_2025-05-31.html"
}
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| 2
|
Our products and services, including Oracle Cloud Services, store, retrieve, process and manage third-party data, such as our customers' data, as well as our own data. We believe that Oracle has been and is a target for computer hackers, cyberattacks and other perpetrators or threat actors because Oracle stores and processes large amounts of data, including sensitive data such as health sciences (including patient health information), financial services, retail, hospitality, telecommunications and government data. We and our third-party vendors are regularly subject to attempts by third parties (which may include individuals or groups of hackers and sophisticated organizations, such as state-sponsored organizations, nation-states and individuals sponsored by them) 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. Such malicious attacks can lead, and have led, to the compromise of personal information or the confidential information or data of Oracle or our customers. Attempts of this nature typically involve IT-related viruses, worms, and other malicious software programs that attack networks, systems, products and services, exploit potential security vulnerabilities of networks, systems, products and services, create system disruptions and cause shutdowns or denials of service. Third parties may attempt to fraudulently induce customers, partners, employees or suppliers into disclosing sensitive information such as user names, passwords or other credentials to gain access to our data, our customers', suppliers' or partners' data or the IT systems of Oracle, our customers, suppliers or partners. 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.
When a cyberattack or other security event or 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 if our products or services are reported to have (or are perceived as having) security vulnerabilities, we have incurred and could incur significant expenses and could suffer substantial damage to our brand and reputation. If our customers lose confidence in the security and reliability of our products and services, including our cloud offerings, they may reduce or terminate their spending with us. In addition, cyberattacks and other security events or incidents have resulted and could result in: significant investigation and remediation costs; loss or destruction of data; operational disruptions; inappropriate use of proprietary and sensitive data; lawsuits; indemnity obligations; regulatory investigations and financial penalties; and increased legal liability, including in some cases contractual costs for customer notification and fraud monitoring. Our remediation efforts may not be successful.
Because the techniques used to obtain unauthorized access to, or sabotage IT systems, constantly evolve, grow more complex over time, and often are not detected until launched against a target, we may be unable to anticipate or implement adequate measures to prevent such techniques. Our internal IT systems continue to evolve and we are often early adopters of new technologies. However, our business policies and internal security controls may not keep pace with emerging threats. We may not detect or confirm any security breach and loss of information for a significant period of time after the security breach.
Our products operate in conjunction with and are dependent on a wide variety of third-party products, components and services. If a security vulnerability exists in one of these components, a targeted exploit could lead to increased costs, liability claims, customer dissatisfaction, reduced revenue, or harm to our reputation or competitive position. We also have an active acquisition program and have acquired a number of companies, products, services and technologies over the years. While we make significant efforts to address any IT security issues with respect to our acquired companies, we may still inherit such risks when we integrate these companies within Oracle.
|
{
"ticker": "ORCL",
"year": "2025",
"source": "ORCL_10K_2025-05-31.html"
}
| 787
| 2
|
Our international sales and operations and global customer base subject us to additional risks that can adversely affect our operating results.
We derive a substantial portion of our revenues from, and have significant operations, outside of the U.S., and in both our U.S. and non-U.S. operations we serve customers based in or with ties to numerous jurisdictions around the world. Compliance with international and U.S. laws and regulations that apply to our international operations increases our cost of doing business. These laws and regulations include data privacy requirements, labor relations laws, tax laws, foreign currency-related regulations, competition/antitrust regulations, anti-bribery laws and other laws prohibiting payments to governmental officials such as the U.S. Foreign Corrupt Practices Act (FCPA), market access regulations, tariffs, and import, export and general trade regulations, including but not limited to sanctions and embargos. Violations of these laws and regulations can result in monetary fines, civil and/or criminal penalties, enforcement actions against us, our officers or our employees, and prohibitions on the conduct of our business, including disgorgement, the loss of trade privileges, and other remedial measures. Any such violations could result in prohibitions on our ability to offer our products and services in one or more countries or territories or to certain entities, could delay or prevent potential acquisitions and could also materially damage our reputation, our brand, our international expansion efforts, our ability to attract and retain employees, our business and our operating results.
Changes to sanctions or export control regulations in the U.S. and the other jurisdictions where we currently operate or have dealings, or in the future may operate or have dealings, can require suspension or termination of business (including financial transactions) in or with certain countries and territories or with certain customers. In addition, we continue to closely monitor international relations and it is difficult to anticipate the effect geopolitical developments may have on us. Compliance with any further sanctions, export controls or other regulatory restrictions (and any countermeasures thereto) taken by the U.S. or other countries could prevent us from serving certain customers or restrict us or our customers from operating in specific jurisdictions, which could have an adverse effect on our operations and results of operations. For example, the U.S. enacted a law making it unlawful, beginning in January 2025, 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. The President issued executive orders that prohibit enforcement until a future date, and also prohibit the imposition of penalties at any time for providing services during the time period covered by the prohibition of enforcement, and ordered the Attorney General to notify relevant service providers that continuing to provide services during the prohibition of enforcement does not violate the statute. If the prohibition is lifted or expires without a resolution that satisfies relevant legal requirements, we may no longer be able 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.
Our success depends, in part, on our ability to anticipate and manage these risks. We monitor our operations and investigate allegations of improprieties relating to transactions and the way in which such transactions are recorded. Where warranted, we provide information and report our findings to government authorities who may conduct their own investigations, and we respond to their requests or demands for information. No assurance can be given that such authorities will not take action or that our compliance program will prove effective. There is no guarantee that our compliance policies and procedures will be followed at all times or will effectively detect and prevent all violations of laws, including economic and financial sanction laws and embargoes. In addition, we are currently navigating a period of geopolitical and regulatory volatility.
We face a variety of other risks and challenges in managing an organization operating globally, including those related to:
•
general economic conditions in each country or region;
•
|
{
"ticker": "ORCL",
"year": "2025",
"source": "ORCL_10K_2025-05-31.html"
}
| 787
| 4
|
In addition, we hold a portfolio of marketable and non-marketable 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, 2025. Any impairment charges and effect of changes in the fair values of certain of these investments are recorded as unrealized gains or losses as a component of consolidated net income in each period. The timing and amount of impairment charges or changes in fair value, if any, of these investments depends on factors beyond our control, including the perceived and actual performance of the companies or funds in which we invest, and 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. Changes in the fair values of these investments, including Ampere, have contributed, and may in the future contribute, to volatility in our net income that is not reflective of our core businesses.
On March 19, 2025, SoftBank Group Corp. announced that it had entered into an agreement with Ampere and certain of its equity holders to acquire all of the equity interests of Ampere (the Ampere Acquisition). The transaction is subject to customary closing conditions, including regulatory approvals, that are beyond our control. If the Ampere Acquisition closes, we will cease to be an investor in Ampere. During the period prior to closing the Ampere Acquisition, the amount of our investments in Ampere could increase for a variety of reasons and we will continue to recognize our share of loss in Ampere's net earnings until the closure of the acquisition. If the Ampere Acquisition does not close, we will continue to be exposed to the risk associated with our investments in Ampere as discussed above.
Changes in currency exchange rates can adversely affect customer demand and our revenue and profitability.
We conduct a significant number of transactions and hold cash in currencies other than the U.S. Dollar. Changes in the values of major foreign currencies, particularly the Australian Dollar, British Pound, Brazilian Real, Canadian Dollar, Euro, Indian Rupee, Japanese Yen and Saudi Riyal, relative to the U.S. Dollar can significantly affect our total assets, revenues, operating results and cash flows, which are reported in U.S. Dollars. Fluctuations in foreign currency rates, including the strengthening of the U.S. Dollar against the Euro and most other major international currencies, adversely affects our revenue growth by reducing the U.S. Dollar value of our foreign currency earnings and affecting actual demand for our products and services as they may become relatively more expensive for foreign currency-based enterprises to purchase. Currency variations can also negatively impact profit margins on sales of our products in countries outside of the U.S. Generally, a stronger U.S. Dollar adversely affects, and a weaker U.S. Dollar favorably affects, our reported revenues and operating results. In addition, our reported assets generally are adversely affected when the dollar strengthens relative to other currencies as a portion of our consolidated cash and bank deposits, among other assets, are held in foreign currencies and reported in U.S. Dollars.
|
{
"ticker": "ORCL",
"year": "2025",
"source": "ORCL_10K_2025-05-31.html"
}
| 641
| 5
|
On March 19, 2025, SoftBank Group Corp. announced that it had entered into an agreement with Ampere and certain of its equity holders to acquire all of the equity interests of Ampere (the Ampere Acquisition). The transaction is subject to customary closing conditions, including regulatory approvals, that are beyond our control. If the Ampere Acquisition closes, we will cease to be an investor in Ampere. During the period prior to closing the Ampere Acquisition, the amount of our investments in Ampere could increase for a variety of reasons and we will continue to recognize our share of loss in Ampere's net earnings until the closure of the acquisition. If the Ampere Acquisition does not close, we will continue to be exposed to the risk associated with our investments in Ampere as discussed above.
Changes in currency exchange rates can adversely affect customer demand and our revenue and profitability.
We conduct a significant number of transactions and hold cash in currencies other than the U.S. Dollar. Changes in the values of major foreign currencies, particularly the Australian Dollar, British Pound, Brazilian Real, Canadian Dollar, Euro, Indian Rupee, Japanese Yen and Saudi Riyal, relative to the U.S. Dollar can significantly affect our total assets, revenues, operating results and cash flows, which are reported in U.S. Dollars. Fluctuations in foreign currency rates, including the strengthening of the U.S. Dollar against the Euro and most other major international currencies, adversely affects our revenue growth by reducing the U.S. Dollar value of our foreign currency earnings and affecting actual demand for our products and services as they may become relatively more expensive for foreign currency-based enterprises to purchase. Currency variations can also negatively impact profit margins on sales of our products in countries outside of the U.S. Generally, a stronger U.S. Dollar adversely affects, and a weaker U.S. Dollar favorably affects, our reported revenues and operating results. In addition, our reported assets generally are adversely affected when the dollar strengthens relative to other currencies as a portion of our consolidated cash and bank deposits, among other assets, are held in foreign currencies and reported in U.S. Dollars.
In addition, we incur foreign currency transaction gains and losses, primarily related to sublicense fees and other intercompany agreements among us and our subsidiaries that we expect to cash settle in the near term, which are charged to earnings in the period incurred. We have a program which primarily utilizes foreign currency forward contracts designed to offset the risks associated with certain foreign currency exposures. We may suspend the program from time to time. As part of this program, we enter into foreign currency forward contracts so that increases or decreases in our foreign currency exposures are offset at least in part by gains or losses on the foreign currency forward contracts in an effort to mitigate the risks and volatility associated with our foreign currency transaction gains or losses. A large portion of our consolidated operations is international, and we expect that we will continue to realize gains or losses with respect to our foreign currency exposures, net of gains or losses from our foreign currency forward contracts, including the cost to obtain such contracts. For example, we experience foreign currency gains and losses when it is not possible or cost-effective to hedge our foreign currency exposures, our hedging efforts are ineffective or we suspend our foreign currency forward contract program. Our ultimate realized loss or gain with respect to currency fluctuations will generally depend on the size and type of cross-currency exposures that we enter into, the currency exchange rates associated with these exposures and changes in those rates, whether we have entered into foreign currency forward contracts to offset these exposures and any related fees paid to purchase such contracts, and other factors. All of these factors can from time to time materially impact our results of operations, financial position and cash flows.
|
{
"ticker": "ORCL",
"year": "2025",
"source": "ORCL_10K_2025-05-31.html"
}
| 753
| 4
|
governmental budgetary constraints or shifts in government spending priorities; and
•
general legal, regulatory and political developments.
Macroeconomic developments such as the global or regional economic effects resulting from elevated inflation and interest rates, limited liquidity, adverse developments affecting financial institutions, the current wars, evolving trade policies between the U.S. and international trade partners, including the imposition of tariffs and other trade measures or restrictions, or the occurrence of similar events in other countries that lead to uncertainty or instability in economic, political or market conditions could negatively affect our business, operating results, financial condition and outlook, which, in turn, could adversely affect our stock price. Any general weakening of, and related declining
30
Table of Contents
corporate confidence in, the global economy or the curtailment of government or corporate spending could cause current or potential customers to reduce or eliminate their IT budgets and spending, which could cause customers to delay, decrease or cancel purchases of our products and services or cause customers not to pay us or to delay paying us for previously purchased products and services. If any parties with whom we conduct business or invest our cash or cash equivalents are unable to meet their obligations to us, our business could be adversely affected. Bank failures or issues in the broader U.S. or global financial systems may have an impact on the broader capital markets and, in turn, our ability to access those markets.
In addition, international, regional or domestic political unrest and the related potential impact on global stability, trade wars, terrorist attacks and the potential for other hostilities in various parts of the world, public health crises and natural disasters continue to contribute to a climate of economic and political uncertainty that could adversely affect our results of operations and financial condition, including our revenue growth and profitability. These factors generally have the strongest effect on our sales of cloud license and on-premise license, hardware and related services and, to a lesser extent, also may affect our renewal rates for license support and our subscription-based cloud offerings.
Business disruptions could adversely affect our operating results.
A significant portion of our critical business operations are concentrated in a few geographic areas, some of which include emerging market international locations that may be less stable relative to running such business operations solely within the U.S. We are a highly automated business and a disruption or failure of our systems, supply chains and processes could cause delays in completing sales, providing services, including some of our cloud offerings, and enabling a seamless customer experience with respect to our customer facing back-office processes. Although the Oracle Cloud is designed to automatically redirect traffic to an alternate facility, in the event of a severe impact to one facility, a major natural disaster, political, social or other disruption to infrastructure that supports our operations or other catastrophic event or the effects of climate change (such as increased storm severity, drought and pandemics) that results in the destruction or disruption of any of our critical business operations, supply chains or IT systems could severely affect our ability to conduct normal business operations and, as a result, our future operating results could be materially and adversely affected.
Item 1B. Unresolve
d Staff Comments
None.
31
Table of Contents
Item 1C. Cyb
ersecurity
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.
|
{
"ticker": "ORCL",
"year": "2025",
"source": "ORCL_10K_2025-05-31.html"
}
| 729
| 2
|
Item 1C. Cyb
ersecurity
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.
If a large scale cyberattack or other major security incident results in unauthorized access to or modification or exfiltration of a significant amount 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, and this could result in a material impact on our business. 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.
During fiscal 2025, Oracle experienced cybersecurity incidents that, to date, have not had a material impact on our business, including our business strategy, results of operations or financial condition.
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.
|
{
"ticker": "ORCL",
"year": "2025",
"source": "ORCL_10K_2025-05-31.html"
}
| 776
| 3
|
| | | Year Ended May 31, | |
| | | | | | Percent Change | | | |
| (Dollars in millions) | | 2025 | | | Actual | | Constant | | 2024 | |
| Total Revenues by Geography : | | | | | | | | | | |
| Americas | | $ | 36,339 | | | 10% | | 11% | | $ | 33,122 | |
| EMEA (1) | | | 14,025 | | | 8% | | 7% | | | 13,030 | |
| Asia Pacific | | | 7,035 | | | 3% | | 5% | | | 6,809 | |
| Total revenues | | | 57,399 | | | 8% | | 9% | | | 52,961 | |
| Total Operating Expenses | | | 39,721 | | | 6% | | 6% | | | 37,608 | |
| Total Operating Margin | | $ | 17,678 | | | 15% | | 16% | | $ | 15,353 | |
| Total Operating Margin % | | 31% | | | | | | | 29% | |
| % Revenues by Geography : | | | | | | | | | | |
| Americas | | 63% | | | | | | | 62% | |
| EMEA | | 25% | | | | | | | 25% | |
| Asia Pacific | | 12% | | | | | | | 13% | |
| Total Revenues by Business : | | | | | | | | | | |
| Cloud and license | | $ | 49,230 | | | 11% | | 11% | | $ | 44,464 | |
| Hardware | | | 2,936 | | | -4% | | -4% | | | 3,066 | |
| Services | | | 5,233 | | | -4% | | -3% | | | 5,431 | |
| Total revenues | | $ | 57,399 | | | 8% | | 9% | | $ | 52,961 | |
| % Revenues by Business : | | | | | | | | | | |
| Cloud and license | | 86% | | | | | | | 84% | |
| Hardware | | 5% | | | | | | | 6% | |
| Services | | 9% | | | | | | | 10% | |
(1)
Comprised of Europe, the Middle East and Africa
Total revenues increased by $4.4 billion in reported currency in fiscal 2025 relative to fiscal 2024 due to a $4.8 billion increase in cloud and license revenues, partially offset by a $198 million decrease in services revenues and a $130 million decrease in hardware revenues, in each case during fiscal 2025 relative to fiscal 2024. Excluding the unfavorable effects of foreign currency rate fluctuations of 1% in fiscal 2025 on total revenues, the constant currency increase in our cloud and license business revenues was primarily due to growth in our cloud services revenues as customers purchased our applications and infrastructure technologies and also renewed their related cloud contracts. In constant currency, applications cloud services and license support and infrastructure cloud services and license support contributed 26% and 74%, respectively, of the growth in cloud services and license support revenues in fiscal 2025. In our hardware business, the constant currency decrease in revenues in fiscal 2025 was due to the emphasis we placed on the marketing and sale of our growing cloud-based infrastructure technologies. In our services business, the constant currency decrease in revenues in fiscal 2025 was attributable to a decrease in revenues from each of our primary services offerings. The Americas, the EMEA and the Asia Pacific regions contributed 74%, 19% and 7%, respectively, to the constant currency total revenue growth during fiscal 2025.
|
{
"ticker": "ORCL",
"year": "2025",
"source": "ORCL_10K_2025-05-31.html"
}
| 1,052
| 5
|
General and Administrative Expenses
:
General and administrative expenses primarily consist of personnel-related expenditures for IT, finance, legal and human resources support functions.
| | | Year Ended May 31, | |
| | | | | | Percent Change | | | |
| (Dollars in millions) | | 2025 | | | Actual | | Constant | | 2024 | |
| General and administrative (1) | | $ | 1,163 | | | -2% | | -1% | | $ | 1,181 | |
| Stock-based compensation | | | 439 | | | 20% | | 20% | | | 367 | |
| Total expenses | | $ | 1,602 | | | 3% | | 4% | | $ | 1,548 | |
| % of Total Revenues | | 3% | | | | | | | 3% | |
(1)
Excluding stock-based compensation
Total general and administrative expenses increased by $54 million in reported currency in fiscal 2025 relative to fiscal 2024. Excluding the favorable effects of currency rate fluctuations of 1% in fiscal 2025, the increase in general and administrative expenses was primarily due to higher stock-based compensation expenses.
Amortization of Intangible Assets
:
Substantially all our intangible assets were acquired through our business combinations. We amortize our intangible assets over, and monitor the appropriateness of, the estimated useful lives of these assets. We also periodically review these intangible assets for potential impairment based upon relevant facts and circumstances. Refer to Note 5 of Notes to Consolidated Financial Statements included elsewhere in this Annual Report for additional information regarding our intangible assets and related amortization.
| | | Year Ended May 31, | |
| | | | | | Percent Change | | | |
| (Dollars in millions) | | 2025 | | | Actual | | Constant | | 2024 | |
| Developed technology | | $ | 642 | | | -5% | | -5% | | $ | 676 | |
| Cloud services and license support agreements and related relationships | | | 714 | | | -30% | | -30% | | | 1,026 | |
| Cloud license and on-premise license agreements and related relationships | | | 462 | | | -1% | | -1% | | | 467 | |
| Other | | | 489 | | | -42% | | -42% | | | 841 | |
| Total amortization of intangible assets | | $ | 2,307 | | | -23% | | -23% | | $ | 3,010 | |
Amortization of intangible assets decreased by $703 million in reported currency in fiscal 2025 relative to fiscal 2024 due to a reduction in expenses associated with certain of our intangible assets that became fully amortized.
Acquisition Related and Other Expenses
:
Acquisition related and other expenses consist of personnel-related costs for transitional and certain other employees, certain business combination adjustments, including adjustments after the measurement period has ended, and certain other operating items, net.
|
{
"ticker": "ORCL",
"year": "2025",
"source": "ORCL_10K_2025-05-31.html"
}
| 755
| 3
|
| * | Not meaningful |
50
Table of Contents
Our non-operating income (expenses), net increased by $158 million in reported currency in fiscal 2025 relative to fiscal 2024 primarily due to a $127 million increase in interest income, an $81 million decrease in foreign currency losses and a $25 million decrease in losses from marketable and non-marketable investments. These contributors to the increase in non-operating income (expenses), net were partially offset by a $77 million decrease in other income, net, which was primarily attributable to lower gains associated with an investment portfolio that we held for our employee deferred compensation plan, and for which an equal and offsetting amount was recorded to our operating expenses during the same period.
Provision for Income Taxes
:
Our effective income tax rates for each of the periods presented were the result of the mix of income earned and losses incurred in various tax jurisdictions that apply a broad range of income tax rates. Refer to Note 12 of Notes to Consolidated Financial Statements included elsewhere in this Annual Report for a discussion regarding the differences between the effective income tax rates as presented for the periods below and the U.S. federal statutory income tax rates that were in effect during these periods. Future effective tax rates could be adversely affected by an unfavorable shift of earnings weighted to jurisdictions with higher tax rates, by unfavorable changes in tax laws and regulations, by adverse rulings in tax-related litigation, or by shortfalls in stock-based compensation realized by employees relative to stock-based compensation that was recorded for book purposes, among others.
| | | Year Ended May 31, | |
| | | | | | Percent Change | | | |
| (Dollars in millions) | | 2025 | | | Actual | | Constant | | 2024 | |
| Provision for income taxes | | $ | 1,717 | | | 35% | | 36% | | $ | 1,274 | |
| Effective tax rate | | 12.1% | | | | | | | 10.9% | |
Provision for income taxes increased in fiscal 2025 relative to fiscal 2024 primarily due to an unfavorable jurisdictional mix of earnings of $380 million, the absence of the realization of a one-time tax attribute of $238 million, higher income before provision for income taxes of $195 million and the absence of the revaluation benefit of net deferred tax assets due to a change in tax rate of $105 million, partially offset by a combination of the absence of changes in unrecognized tax benefits of $233 million and an increase in tax benefits related to stock-based compensation of $223 million.
Liquidity and Capital Resources
| | | As of May 31, | |
| (Dollars in millions) | | 2025 | | | Change | | 2024 | |
| Working capital | | $ | (8,064 | ) | | -10% | | $ | (8,990 | ) |
| Cash, cash equivalents and marketable securities | | $ | 11,203 | | | 5% | | $ | 10,661 | |
Working capital
:
|
{
"ticker": "ORCL",
"year": "2025",
"source": "ORCL_10K_2025-05-31.html"
}
| 687
| 3
|
stock-based awards forfeited by employees leaving the company, divided by the weighted-average outstanding shares during the calculation period. This maximum potential dilution will only result if all stock-based awards vest and, if applicable, are exercised. Of the outstanding stock options as of May 31, 2025, which generally have a ten-year exercise period, all have exercise prices lower than the market price of our common stock on such date. In recent years, our stock repurchase program has partially offset the dilutive effect of our stock-based compensation program. However, we may modify the levels of our stock repurchases in the future depending on a number of factors, including the amount of cash we have available for acquisitions, to pay dividends, to repay or repurchase indebtedness or for other purposes. As of May 31, 2025, the maximum potential dilution from all outstanding stock-based awards, regardless of when granted and regardless of whether vested or unvested, was 5.6%.
During fiscal 2025, the Compensation Committee reviewed and approved the annual organization-wide stock-based award grants to selected employees; all stock-based award grants to senior officers; and any individual grant of RSUs with a value of $5 million or greater. Each member of a separate executive officer committee, referred to as the Plan Committee, was allocated a fiscal 2025 equity budget that could be used throughout the fiscal year to grant equity subject to certain limitations established by the Compensation Committee.
Stock-based awards activity from June 1, 2022 through May 31, 2025 is summarized as follows (shares in millions):
| Stock-based awards outstanding as of May 31, 2022 | | | 225 | | |
| Stock-based awards granted and assumed | | | 168 | | |
| Stock-based awards vested and issued and, if applicable, exercised | | | (209 | ) | |
| Forfeitures, cancellations and other, net | | | (26 | ) | |
| Stock-based awards outstanding as of May 31, 2025 | | | 158 | | |
| Annualized stock-based awards granted and assumed, net of forfeitures and cancellations | | | 48 | | |
| Annualized stock repurchases | | | (11 | ) | |
| Shares outstanding as of May 31, 2025 | | | 2,807 | | |
| Basic weighted-average shares outstanding from June 1, 2022 through May 31, 2025 | | | 2,743 | | |
| Stock-based awards outstanding as a percent of shares outstanding as of May 31, 2025 | | 5.6% | | |
| Total in the money stock-based awards outstanding (based on the closing price of our common stock on the last trading day of fiscal 2025) as a percent of shares outstanding as of May 31, 2025 | | 5.6% | | |
| Annualized stock-based awards granted and assumed, net of forfeitures and cancellations and before stock repurchases, as a percent of weighted-average shares outstanding from June 1, 2022 through May 31, 2025 | | 1.7% | | |
| Annualized stock-based awards granted and assumed, net of forfeitures and cancellations and after stock repurchases, as a percent of weighted-average shares outstanding from June 1, 2022 through May 31, 2025 | | 1.3% | | |
Recent Accounting Pronouncements
|
{
"ticker": "ORCL",
"year": "2025",
"source": "ORCL_10K_2025-05-31.html"
}
| 762
| 2
|
Annual Report. For additional details on our non-marketable investments, see Note 1 of Notes to Consolidated Financial Statements included elsewhere in this Annual Report.
Currency Risk
Foreign Currency Translation Risk
As described under "Constant Currency Presentation" above, our international operations have provided and are expected to continue to provide a significant portion of our consolidated revenues and expenses that we report in U.S. Dollars. As a result, our consolidated revenues and expenses are affected and will continue to be affected by changes in the U.S. Dollar against major foreign currencies. Fluctuations in foreign currencies impact the amount of total assets, liabilities, earnings and cash flows that we report for our foreign subsidiaries upon the translation of these amounts into U.S. Dollars for, and as of the end of, each reporting period. For example, the strengthening of the U.S. Dollar will reduce the reported amount of our foreign subsidiaries' cash, cash equivalents, trade receivables, deferred revenues, current and non-current liabilities, total revenues and total expenses that we translate into U.S. Dollars and report in our consolidated financial statements for, and as of the end of, each reporting period.
Foreign Currency Transaction Risk
We transact business in various foreign currencies. Our foreign currency exposures primarily arise from various intercompany transactions. Our principal currency exposures include the Australian Dollar, Brazilian Real, British Pound, Euro, Indian Rupee, Japanese Yen and Saudi Riyal. We have established a program that primarily utilizes foreign currency forward contracts to partially offset the risks that arise from the aforementioned transactions. Under this program, our strategy is to enter into foreign currency forward contracts for currencies in which we have significant exposure so that increases or decreases in our foreign currency exposures are offset by gains or losses on the foreign currency forward contracts which mitigate the risks and volatility associated with our foreign currency transactions. We may suspend this program from time to time. Our foreign currency forward contracts are generally short-term in duration and we do not use them for trading purposes.
Realized gains or losses with respect to our foreign currency exposures, net of gains or losses from our foreign currency forward contracts, including costs incurred to enter into these foreign currency forward contracts, are included in non-operating income (expenses), net in our consolidated financial statements. Our ultimate realized gain or loss with respect to foreign currency exposures will generally depend on the size and type of cross-currency transactions that we enter into, the currency exchange rates associated with these exposures and changes in those rates, the net realized gain or loss on our foreign currency forward contracts and other factors. Furthermore, as a large portion of our consolidated operations are international, we could experience additional foreign currency volatility in the future, in which the amounts and timing are unknown. Refer to Note 1 of Notes to Consolidated Financial Statements included elsewhere in this Annual Report for additional details about our foreign currency forward contracts.
Sensitivity Analysis
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 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:
|
{
"ticker": "ORCL",
"year": "2025",
"source": "ORCL_10K_2025-05-31.html"
}
| 630
| 2
|
CONSOLIDATED STATEM
ENTS OF OPERATIONS
For the Years Ended May 31, 2025, 2024 and 2023
| | | Year Ended May 31, | |
| (in millions, except per share data) | | 2025 | | | 2024 | | | 2023 | |
| Revenues: | | | | | | | | | |
| Cloud services and license support | | $ | 44,029 | | | $ | 39,383 | | | $ | 35,307 | |
| Cloud license and on-premise license | | | 5,201 | | | | 5,081 | | | | 5,779 | |
| Hardware | | | 2,936 | | | | 3,066 | | | | 3,274 | |
| Services | | | 5,233 | | | | 5,431 | | | | 5,594 | |
| Total revenues | | | 57,399 | | | | 52,961 | | | | 49,954 | |
| Operating expenses: | | | | | | | | | |
| Cloud services and license support (1) | | | 11,569 | | | | 9,427 | | | | 7,763 | |
| Hardware (1) | | | 782 | | | | 891 | | | | 1,040 | |
| Services (1) | | | 4,576 | | | | 4,825 | | | | 4,761 | |
| Sales and marketing (1) | | | 8,651 | | | | 8,274 | | | | 8,833 | |
| Research and development | | | 9,860 | | | | 8,915 | | | | 8,623 | |
| General and administrative | | | 1,602 | | | | 1,548 | | | | 1,579 | |
| Amortization of intangible assets | | | 2,307 | | | | 3,010 | | | | 3,582 | |
| Acquisition related and other | | | 75 | | | | 314 | | | | 190 | |
| Restructuring | | | 299 | | | | 404 | | | | 490 | |
| Total operating expenses | | | 39,721 | | | | 37,608 | | | | 36,861 | |
| Operating income | | | 17,678 | | | | 15,353 | | | | 13,093 | |
| Interest expense | | | ( 3,578 | ) | | | ( 3,514 | ) | | | ( 3,505 | ) |
| Non-operating income (expenses), net | | | 60 | | | | ( 98 | ) | | | ( 462 | ) |
| Income before income taxes | | | 14,160 | | | | 11,741 | | | | 9,126 | |
| Provision for income taxes | | | 1,717 | | | | 1,274 | | | | 623 | |
| Net income | | $ | 12,443 | | | $ | 10,467 | | | $ | 8,503 | |
| Earnings per share: | | | | | | | | | |
| Basic | | $ | 4.46 | | | $ | 3.82 | | | $ | 3.15 | |
| Diluted | | $ | 4.34 | | | $ | 3.71 | | | $ | 3.07 | |
| Weighted average common shares outstanding: | | | | | | | | | |
| Basic | | | 2,789 | | | | 2,744 | | | | 2,696 | |
| Diluted | | | 2,866 | | | | 2,823 | | | | 2,766 | |
|
{
"ticker": "ORCL",
"year": "2025",
"source": "ORCL_10K_2025-05-31.html"
}
| 1,122
| 2
|
ENTS OF OPERATIONS
For the Years Ended May 31, 2025, 2024 and 2023
| | | Year Ended May 31, | |
| (in millions, except per share data) | | 2025 | | | 2024 | | | 2023 | |
| Revenues: | | | | | | | | | |
| Cloud services and license support | | $ | 44,029 | | | $ | 39,383 | | | $ | 35,307 | |
| Cloud license and on-premise license | | | 5,201 | | | | 5,081 | | | | 5,779 | |
| Hardware | | | 2,936 | | | | 3,066 | | | | 3,274 | |
| Services | | | 5,233 | | | | 5,431 | | | | 5,594 | |
| Total revenues | | | 57,399 | | | | 52,961 | | | | 49,954 | |
| Operating expenses: | | | | | | | | | |
| Cloud services and license support (1) | | | 11,569 | | | | 9,427 | | | | 7,763 | |
| Hardware (1) | | | 782 | | | | 891 | | | | 1,040 | |
| Services (1) | | | 4,576 | | | | 4,825 | | | | 4,761 | |
| Sales and marketing (1) | | | 8,651 | | | | 8,274 | | | | 8,833 | |
| Research and development | | | 9,860 | | | | 8,915 | | | | 8,623 | |
| General and administrative | | | 1,602 | | | | 1,548 | | | | 1,579 | |
| Amortization of intangible assets | | | 2,307 | | | | 3,010 | | | | 3,582 | |
| Acquisition related and other | | | 75 | | | | 314 | | | | 190 | |
| Restructuring | | | 299 | | | | 404 | | | | 490 | |
| Total operating expenses | | | 39,721 | | | | 37,608 | | | | 36,861 | |
| Operating income | | | 17,678 | | | | 15,353 | | | | 13,093 | |
| Interest expense | | | ( 3,578 | ) | | | ( 3,514 | ) | | | ( 3,505 | ) |
| Non-operating income (expenses), net | | | 60 | | | | ( 98 | ) | | | ( 462 | ) |
| Income before income taxes | | | 14,160 | | | | 11,741 | | | | 9,126 | |
| Provision for income taxes | | | 1,717 | | | | 1,274 | | | | 623 | |
| Net income | | $ | 12,443 | | | $ | 10,467 | | | $ | 8,503 | |
| Earnings per share: | | | | | | | | | |
| Basic | | $ | 4.46 | | | $ | 3.82 | | | $ | 3.15 | |
| Diluted | | $ | 4.34 | | | $ | 3.71 | | | $ | 3.07 | |
| Weighted average common shares outstanding: | | | | | | | | | |
| Basic | | | 2,789 | | | | 2,744 | | | | 2,696 | |
| Diluted | | | 2,866 | | | | 2,823 | | | | 2,766 | |
(1)
|
{
"ticker": "ORCL",
"year": "2025",
"source": "ORCL_10K_2025-05-31.html"
}
| 1,119
| 2
|
For the Years Ended May 31, 2025, 2024 and 2023
| | | Year Ended May 31, | |
| (in millions, except per share data) | | 2025 | | | 2024 | | | 2023 | |
| Revenues: | | | | | | | | | |
| Cloud services and license support | | $ | 44,029 | | | $ | 39,383 | | | $ | 35,307 | |
| Cloud license and on-premise license | | | 5,201 | | | | 5,081 | | | | 5,779 | |
| Hardware | | | 2,936 | | | | 3,066 | | | | 3,274 | |
| Services | | | 5,233 | | | | 5,431 | | | | 5,594 | |
| Total revenues | | | 57,399 | | | | 52,961 | | | | 49,954 | |
| Operating expenses: | | | | | | | | | |
| Cloud services and license support (1) | | | 11,569 | | | | 9,427 | | | | 7,763 | |
| Hardware (1) | | | 782 | | | | 891 | | | | 1,040 | |
| Services (1) | | | 4,576 | | | | 4,825 | | | | 4,761 | |
| Sales and marketing (1) | | | 8,651 | | | | 8,274 | | | | 8,833 | |
| Research and development | | | 9,860 | | | | 8,915 | | | | 8,623 | |
| General and administrative | | | 1,602 | | | | 1,548 | | | | 1,579 | |
| Amortization of intangible assets | | | 2,307 | | | | 3,010 | | | | 3,582 | |
| Acquisition related and other | | | 75 | | | | 314 | | | | 190 | |
| Restructuring | | | 299 | | | | 404 | | | | 490 | |
| Total operating expenses | | | 39,721 | | | | 37,608 | | | | 36,861 | |
| Operating income | | | 17,678 | | | | 15,353 | | | | 13,093 | |
| Interest expense | | | ( 3,578 | ) | | | ( 3,514 | ) | | | ( 3,505 | ) |
| Non-operating income (expenses), net | | | 60 | | | | ( 98 | ) | | | ( 462 | ) |
| Income before income taxes | | | 14,160 | | | | 11,741 | | | | 9,126 | |
| Provision for income taxes | | | 1,717 | | | | 1,274 | | | | 623 | |
| Net income | | $ | 12,443 | | | $ | 10,467 | | | $ | 8,503 | |
| Earnings per share: | | | | | | | | | |
| Basic | | $ | 4.46 | | | $ | 3.82 | | | $ | 3.15 | |
| Diluted | | $ | 4.34 | | | $ | 3.71 | | | $ | 3.07 | |
| Weighted average common shares outstanding: | | | | | | | | | |
| Basic | | | 2,789 | | | | 2,744 | | | | 2,696 | |
| Diluted | | | 2,866 | | | | 2,823 | | | | 2,766 | |
(1)
Exclusive of amortization of intangible assets, which is shown separately.
|
{
"ticker": "ORCL",
"year": "2025",
"source": "ORCL_10K_2025-05-31.html"
}
| 1,127
| 2
|
| | | Year Ended May 31, | |
| (in millions, except per share data) | | 2025 | | | 2024 | | | 2023 | |
| Revenues: | | | | | | | | | |
| Cloud services and license support | | $ | 44,029 | | | $ | 39,383 | | | $ | 35,307 | |
| Cloud license and on-premise license | | | 5,201 | | | | 5,081 | | | | 5,779 | |
| Hardware | | | 2,936 | | | | 3,066 | | | | 3,274 | |
| Services | | | 5,233 | | | | 5,431 | | | | 5,594 | |
| Total revenues | | | 57,399 | | | | 52,961 | | | | 49,954 | |
| Operating expenses: | | | | | | | | | |
| Cloud services and license support (1) | | | 11,569 | | | | 9,427 | | | | 7,763 | |
| Hardware (1) | | | 782 | | | | 891 | | | | 1,040 | |
| Services (1) | | | 4,576 | | | | 4,825 | | | | 4,761 | |
| Sales and marketing (1) | | | 8,651 | | | | 8,274 | | | | 8,833 | |
| Research and development | | | 9,860 | | | | 8,915 | | | | 8,623 | |
| General and administrative | | | 1,602 | | | | 1,548 | | | | 1,579 | |
| Amortization of intangible assets | | | 2,307 | | | | 3,010 | | | | 3,582 | |
| Acquisition related and other | | | 75 | | | | 314 | | | | 190 | |
| Restructuring | | | 299 | | | | 404 | | | | 490 | |
| Total operating expenses | | | 39,721 | | | | 37,608 | | | | 36,861 | |
| Operating income | | | 17,678 | | | | 15,353 | | | | 13,093 | |
| Interest expense | | | ( 3,578 | ) | | | ( 3,514 | ) | | | ( 3,505 | ) |
| Non-operating income (expenses), net | | | 60 | | | | ( 98 | ) | | | ( 462 | ) |
| Income before income taxes | | | 14,160 | | | | 11,741 | | | | 9,126 | |
| Provision for income taxes | | | 1,717 | | | | 1,274 | | | | 623 | |
| Net income | | $ | 12,443 | | | $ | 10,467 | | | $ | 8,503 | |
| Earnings per share: | | | | | | | | | |
| Basic | | $ | 4.46 | | | $ | 3.82 | | | $ | 3.15 | |
| Diluted | | $ | 4.34 | | | $ | 3.71 | | | $ | 3.07 | |
| Weighted average common shares outstanding: | | | | | | | | | |
| Basic | | | 2,789 | | | | 2,744 | | | | 2,696 | |
| Diluted | | | 2,866 | | | | 2,823 | | | | 2,766 | |
(1)
Exclusive of amortization of intangible assets, which is shown separately.
See notes to consolidated financial statements.
|
{
"ticker": "ORCL",
"year": "2025",
"source": "ORCL_10K_2025-05-31.html"
}
| 1,113
| 2
|
CONSOLIDATED STATEM
ENTS OF CASH FLOWS
For the Years Ended May 31, 2025, 2024 and 2023
| | | Year Ended May 31, | |
| (in millions) | | 2025 | | | 2024 | | | 2023 | |
| Cash flows from operating activities: | | | | | | | | | |
| Net income | | $ | 12,443 | | | $ | 10,467 | | | $ | 8,503 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | |
| Depreciation | | | 3,867 | | | | 3,129 | | | | 2,526 | |
| Amortization of intangible assets | | | 2,307 | | | | 3,010 | | | | 3,582 | |
| Deferred income taxes | | | ( 1,637 | ) | | | ( 2,139 | ) | | | ( 2,167 | ) |
| Stock-based compensation | | | 4,674 | | | | 3,974 | | | | 3,547 | |
| Other, net | | | 667 | | | | 720 | | | | 661 | |
| Changes in operating assets and liabilities, net of effects from acquisitions: | | | | | | | | | |
| Increase in trade receivables, net | | | ( 653 | ) | | | ( 965 | ) | | | ( 151 | ) |
| Decrease in prepaid expenses and other assets | | | 266 | | | | 542 | | | | 317 | |
| Decrease in accounts payable and other liabilities | | | ( 608 | ) | | | ( 594 | ) | | | ( 281 | ) |
| Decrease in income taxes payable | | | ( 659 | ) | | | ( 127 | ) | | | ( 153 | ) |
| Increase in deferred revenues | | | 154 | | | | 656 | | | | 781 | |
| Net cash provided by operating activities | | | 20,821 | | | | 18,673 | | | | 17,165 | |
| Cash flows from investing activities: | | | | | | | | | |
| Purchases of marketable securities and other investments | | | ( 1,272 | ) | | | ( 1,003 | ) | | | ( 1,181 | ) |
| Proceeds from sales and maturities of marketable securities and other investments | | | 776 | | | | 572 | | | | 1,113 | |
| Acquisitions, net of cash acquired | | | — | | | | ( 63 | ) | | | ( 27,721 | ) |
| Capital expenditures | | | ( 21,215 | ) | | | ( 6,866 | ) | | | ( 8,695 | ) |
| Net cash used for investing activities | | | ( 21,711 | ) | | | ( 7,360 | ) | | | ( 36,484 | ) |
| Cash flows from financing activities: | | | | | | | | | |
| Payments for repurchases of common stock | | | ( 600 | ) | | | ( 1,202 | ) | | | ( 1,300 | ) |
| Proceeds from issuances of common stock | | | 653 | | | | 742 | | | | 1,192 | |
| Shares repurchased for tax withholdings upon vesting of restricted stock-based awards | | | ( 900 | ) | | | ( 2,040 | ) | | | ( 1,203 | ) |
| Payments of dividends to stockholders | | | ( 4,743 | ) | | | ( 4,391 | ) | | | ( 3,668 | ) |
| Proceeds from issuances of (repayments of) commercial paper, net | | | 1,889 | | | | ( 167 | ) | | | 500 | |
| Proceeds from issuances of senior notes and term loan credit agreements, net of issuance costs | | | 19,548 | | | | — | | | | 33,494 | |
| Repayments of senior notes and term loan credit agreements | | | ( 15,841 | ) | | | ( 3,500 | ) | | | ( 21,050 | ) |
| Other financing activities, net | | | 1,092 | | | | 4 | | | | ( 55 | ) |
| Net cash provided by (used for) financing activities | | | 1,098 | | | | ( 10,554 | ) | | | 7,910 | |
| Effect of exchange rate changes on cash and cash equivalents | | | 124 | | | | ( 70 | ) | | | ( 209 | ) |
| Net increase (decrease) in cash and cash equivalents | | | 332 | | | | 689 | | | | ( 11,618 | ) |
| Cash and cash equivalents at beginning of period | | | 10,454 | | | | 9,765 | | | | 21,383 | |
| Cash and cash equivalents at end of period | | $ | 10,786 | | | $ | 10,454 | | | $ | 9,765 | |
| Non-cash investing activities: | | | | | | | | | |
| Unpaid capital expenditures | | $ | 2,970 | | | $ | 1,637 | | | $ | 588 | |
| Supplemental schedule of cash flow data: | | | | | | | | | |
| Cash paid for income taxes | | $ | 4,020 | | | $ | 3,560 | | | $ | 3,009 | |
| Cash paid for interest | | $ | 3,374 | | | $ | 3,655 | | | $ | 3,250 | |
|
{
"ticker": "ORCL",
"year": "2025",
"source": "ORCL_10K_2025-05-31.html"
}
| 1,642
| 2
|
ENTS OF CASH FLOWS
For the Years Ended May 31, 2025, 2024 and 2023
| | | Year Ended May 31, | |
| (in millions) | | 2025 | | | 2024 | | | 2023 | |
| Cash flows from operating activities: | | | | | | | | | |
| Net income | | $ | 12,443 | | | $ | 10,467 | | | $ | 8,503 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | |
| Depreciation | | | 3,867 | | | | 3,129 | | | | 2,526 | |
| Amortization of intangible assets | | | 2,307 | | | | 3,010 | | | | 3,582 | |
| Deferred income taxes | | | ( 1,637 | ) | | | ( 2,139 | ) | | | ( 2,167 | ) |
| Stock-based compensation | | | 4,674 | | | | 3,974 | | | | 3,547 | |
| Other, net | | | 667 | | | | 720 | | | | 661 | |
| Changes in operating assets and liabilities, net of effects from acquisitions: | | | | | | | | | |
| Increase in trade receivables, net | | | ( 653 | ) | | | ( 965 | ) | | | ( 151 | ) |
| Decrease in prepaid expenses and other assets | | | 266 | | | | 542 | | | | 317 | |
| Decrease in accounts payable and other liabilities | | | ( 608 | ) | | | ( 594 | ) | | | ( 281 | ) |
| Decrease in income taxes payable | | | ( 659 | ) | | | ( 127 | ) | | | ( 153 | ) |
| Increase in deferred revenues | | | 154 | | | | 656 | | | | 781 | |
| Net cash provided by operating activities | | | 20,821 | | | | 18,673 | | | | 17,165 | |
| Cash flows from investing activities: | | | | | | | | | |
| Purchases of marketable securities and other investments | | | ( 1,272 | ) | | | ( 1,003 | ) | | | ( 1,181 | ) |
| Proceeds from sales and maturities of marketable securities and other investments | | | 776 | | | | 572 | | | | 1,113 | |
| Acquisitions, net of cash acquired | | | — | | | | ( 63 | ) | | | ( 27,721 | ) |
| Capital expenditures | | | ( 21,215 | ) | | | ( 6,866 | ) | | | ( 8,695 | ) |
| Net cash used for investing activities | | | ( 21,711 | ) | | | ( 7,360 | ) | | | ( 36,484 | ) |
| Cash flows from financing activities: | | | | | | | | | |
| Payments for repurchases of common stock | | | ( 600 | ) | | | ( 1,202 | ) | | | ( 1,300 | ) |
| Proceeds from issuances of common stock | | | 653 | | | | 742 | | | | 1,192 | |
| Shares repurchased for tax withholdings upon vesting of restricted stock-based awards | | | ( 900 | ) | | | ( 2,040 | ) | | | ( 1,203 | ) |
| Payments of dividends to stockholders | | | ( 4,743 | ) | | | ( 4,391 | ) | | | ( 3,668 | ) |
| Proceeds from issuances of (repayments of) commercial paper, net | | | 1,889 | | | | ( 167 | ) | | | 500 | |
| Proceeds from issuances of senior notes and term loan credit agreements, net of issuance costs | | | 19,548 | | | | — | | | | 33,494 | |
| Repayments of senior notes and term loan credit agreements | | | ( 15,841 | ) | | | ( 3,500 | ) | | | ( 21,050 | ) |
| Other financing activities, net | | | 1,092 | | | | 4 | | | | ( 55 | ) |
| Net cash provided by (used for) financing activities | | | 1,098 | | | | ( 10,554 | ) | | | 7,910 | |
| Effect of exchange rate changes on cash and cash equivalents | | | 124 | | | | ( 70 | ) | | | ( 209 | ) |
| Net increase (decrease) in cash and cash equivalents | | | 332 | | | | 689 | | | | ( 11,618 | ) |
| Cash and cash equivalents at beginning of period | | | 10,454 | | | | 9,765 | | | | 21,383 | |
| Cash and cash equivalents at end of period | | $ | 10,786 | | | $ | 10,454 | | | $ | 9,765 | |
| Non-cash investing activities: | | | | | | | | | |
| Unpaid capital expenditures | | $ | 2,970 | | | $ | 1,637 | | | $ | 588 | |
| Supplemental schedule of cash flow data: | | | | | | | | | |
| Cash paid for income taxes | | $ | 4,020 | | | $ | 3,560 | | | $ | 3,009 | |
| Cash paid for interest | | $ | 3,374 | | | $ | 3,655 | | | $ | 3,250 | |
See notes to consolidated financial statements.
|
{
"ticker": "ORCL",
"year": "2025",
"source": "ORCL_10K_2025-05-31.html"
}
| 1,643
| 2
|
For the Years Ended May 31, 2025, 2024 and 2023
| | | Year Ended May 31, | |
| (in millions) | | 2025 | | | 2024 | | | 2023 | |
| Cash flows from operating activities: | | | | | | | | | |
| Net income | | $ | 12,443 | | | $ | 10,467 | | | $ | 8,503 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | |
| Depreciation | | | 3,867 | | | | 3,129 | | | | 2,526 | |
| Amortization of intangible assets | | | 2,307 | | | | 3,010 | | | | 3,582 | |
| Deferred income taxes | | | ( 1,637 | ) | | | ( 2,139 | ) | | | ( 2,167 | ) |
| Stock-based compensation | | | 4,674 | | | | 3,974 | | | | 3,547 | |
| Other, net | | | 667 | | | | 720 | | | | 661 | |
| Changes in operating assets and liabilities, net of effects from acquisitions: | | | | | | | | | |
| Increase in trade receivables, net | | | ( 653 | ) | | | ( 965 | ) | | | ( 151 | ) |
| Decrease in prepaid expenses and other assets | | | 266 | | | | 542 | | | | 317 | |
| Decrease in accounts payable and other liabilities | | | ( 608 | ) | | | ( 594 | ) | | | ( 281 | ) |
| Decrease in income taxes payable | | | ( 659 | ) | | | ( 127 | ) | | | ( 153 | ) |
| Increase in deferred revenues | | | 154 | | | | 656 | | | | 781 | |
| Net cash provided by operating activities | | | 20,821 | | | | 18,673 | | | | 17,165 | |
| Cash flows from investing activities: | | | | | | | | | |
| Purchases of marketable securities and other investments | | | ( 1,272 | ) | | | ( 1,003 | ) | | | ( 1,181 | ) |
| Proceeds from sales and maturities of marketable securities and other investments | | | 776 | | | | 572 | | | | 1,113 | |
| Acquisitions, net of cash acquired | | | — | | | | ( 63 | ) | | | ( 27,721 | ) |
| Capital expenditures | | | ( 21,215 | ) | | | ( 6,866 | ) | | | ( 8,695 | ) |
| Net cash used for investing activities | | | ( 21,711 | ) | | | ( 7,360 | ) | | | ( 36,484 | ) |
| Cash flows from financing activities: | | | | | | | | | |
| Payments for repurchases of common stock | | | ( 600 | ) | | | ( 1,202 | ) | | | ( 1,300 | ) |
| Proceeds from issuances of common stock | | | 653 | | | | 742 | | | | 1,192 | |
| Shares repurchased for tax withholdings upon vesting of restricted stock-based awards | | | ( 900 | ) | | | ( 2,040 | ) | | | ( 1,203 | ) |
| Payments of dividends to stockholders | | | ( 4,743 | ) | | | ( 4,391 | ) | | | ( 3,668 | ) |
| Proceeds from issuances of (repayments of) commercial paper, net | | | 1,889 | | | | ( 167 | ) | | | 500 | |
| Proceeds from issuances of senior notes and term loan credit agreements, net of issuance costs | | | 19,548 | | | | — | | | | 33,494 | |
| Repayments of senior notes and term loan credit agreements | | | ( 15,841 | ) | | | ( 3,500 | ) | | | ( 21,050 | ) |
| Other financing activities, net | | | 1,092 | | | | 4 | | | | ( 55 | ) |
| Net cash provided by (used for) financing activities | | | 1,098 | | | | ( 10,554 | ) | | | 7,910 | |
| Effect of exchange rate changes on cash and cash equivalents | | | 124 | | | | ( 70 | ) | | | ( 209 | ) |
| Net increase (decrease) in cash and cash equivalents | | | 332 | | | | 689 | | | | ( 11,618 | ) |
| Cash and cash equivalents at beginning of period | | | 10,454 | | | | 9,765 | | | | 21,383 | |
| Cash and cash equivalents at end of period | | $ | 10,786 | | | $ | 10,454 | | | $ | 9,765 | |
| Non-cash investing activities: | | | | | | | | | |
| Unpaid capital expenditures | | $ | 2,970 | | | $ | 1,637 | | | $ | 588 | |
| Supplemental schedule of cash flow data: | | | | | | | | | |
| Cash paid for income taxes | | $ | 4,020 | | | $ | 3,560 | | | $ | 3,009 | |
| Cash paid for interest | | $ | 3,374 | | | $ | 3,655 | | | $ | 3,250 | |
See notes to consolidated financial statements.
68
|
{
"ticker": "ORCL",
"year": "2025",
"source": "ORCL_10K_2025-05-31.html"
}
| 1,638
| 2
|
intangible
assets, acquisition related and other expenses, restructuring expenses, stock-based compensation, interest expense or certain other non-operating income (expenses), net. Refer to the table below for a reconciliation of our total margin for operating segments to our income before income taxes as reported per our consolidated statements of operations.
The following table reconciles total margin for operating segments to income before income taxes:
| | | Year Ended May 31, | |
| (in millions) | | 2025 | | | 2024 | | | 2023 | |
| Total margin for operating segments | | $ | 33,841 | | | $ | 31,345 | | | $ | 29,162 | |
| Research and development | | | ( 9,860 | ) | | | ( 8,915 | ) | | | ( 8,623 | ) |
| General and administrative | | | ( 1,602 | ) | | | ( 1,548 | ) | | | ( 1,579 | ) |
| Amortization of intangible assets | | | ( 2,307 | ) | | | ( 3,010 | ) | | | ( 3,582 | ) |
| Acquisition related and other | | | ( 75 | ) | | | ( 314 | ) | | | ( 190 | ) |
| Restructuring | | | ( 299 | ) | | | ( 404 | ) | | | ( 490 | ) |
| Stock-based compensation for operating segments | | | ( 1,597 | ) | | | ( 1,382 | ) | | | ( 1,201 | ) |
| Expense allocations and other, net | | | ( 423 | ) | | | ( 419 | ) | | | ( 404 | ) |
| Interest expense | | | ( 3,578 | ) | | | ( 3,514 | ) | | | ( 3,505 | ) |
| Non-operating income (expenses), net | | | 60 | | | | ( 98 | ) | | | ( 462 | ) |
| Income before income taxes | | $ | 14,160 | | | $ | 11,741 | | | $ | 9,126 | |
Disaggregation of Revenues
We have considered information that is regularly reviewed by our CODMs in evaluating financial performance and disclosures presented outside of our financial statements in our earnings releases and used in investor presentations to disaggregate revenues to depict how the nature, amount, timing and uncertainty of revenues and cash flows are affected by economic factors. The principal category we use to disaggregate revenues is the nature of our products and services as presented in our consolidated statements of operations.
The following table is a summary of our total revenues by geographic region:
|
{
"ticker": "ORCL",
"year": "2025",
"source": "ORCL_10K_2025-05-31.html"
}
| 664
| 2
|
Pension benefits represent significant financial obligations that will be ultimately settled in the future with employees who meet eligibility requirements. Because of the uncertainties involved in estimating the timing and amount of future payments and asset returns, significant estimates are required to calculate pension expense and liabilities related to Linde's plans. Linde utilizes the services of independent actuaries, whose models are used to facilitate these calculations. Several key assumptions are used in the actuarial models to calculate pension expense and liability amounts recorded in the consolidated financial statements. In particular, significant changes in actual investment returns on pension assets, discount rates, or legislative or regulatory changes could impact future results of operations and required pension contributions.
Operational risks may adversely impact Linde's business or results of operations.
Linde's operating results are dependent on the continued operation of its production facilities and its ability to meet customer contract requirements and other needs. Insufficient or excess capacity threatens Linde's ability to generate competitive profit margins and may expose Linde to liabilities related to contract commitments. Operating results are also dependent on Linde's ability to complete new construction projects on time, on budget and in accordance with performance requirements. Failure to do so may expose Linde's business to loss of revenue, potential litigation and loss of business reputation.
Also inherent in the management of Linde's production facilities and delivery systems, including storage, vehicle transportation and pipelines, are operational risks that require continuous training, oversight and control. Material operating failures at production, storage facilities or pipelines, including fire, toxic release and explosions, or the occurrence of vehicle transportation accidents could result in loss of life, damage to the environment, loss of production and/or extensive property damage, all of which may negatively impact Linde's financial results.
Linde may be subject to information technology system failures, network disruptions and breaches in data security.
Linde relies on information technology systems and networks for business and operational activities, and also stores and processes sensitive business and proprietary information in these systems and networks. These systems are susceptible to outages due to fire, flood, power loss, telecommunications failures, viruses, break-ins and similar events, or breaches of security.
Linde has taken steps to address these risks and concerns by implementing advanced security technologies, internal controls, network and data center resiliency and recovery processes. Despite these steps, however, our information technology systems have in the past been and in the future will likely be subject to increasingly sophisticated cyber attacks. Operational failures and breaches of security from such attempts could lead to the loss or disclosure of confidential information or personal data belonging to Linde or our employees and customers or suppliers. These failures and breaches could result in business interruption or malfunction and lead to legal or regulatory actions that could result in a material adverse impact on Linde's operations, reputation and financial results. To date, such attempts have not had any significant impact on Linde's operations or financial results.
The inability to effectively integrate acquisitions or collaborate with joint venture partners could adversely impact Linde's financial position and results of operations.
Linde has evaluated and expects to continue to evaluate, a wide array of potential strategic acquisitions and joint ventures. Many of these transactions, if consummated, could be material to its financial condition and results of operations. In addition, the process of integrating an acquired company, business or group of assets may create unforeseen operating difficulties and expenditures. Although historically Linde has been successful with its acquisition strategy and execution, the areas where Linde may face risks include:
•
the need to implement or remediate controls, procedures and policies appropriate for a larger public company at companies that prior to the acquisition lacked these controls, procedures and policies;
•
diversion of management time and focus from operating existing business to acquisition integration challenges;
•
cultural challenges associated with integrating employees from the acquired company into the existing organization;
•
the need to integrate each company's accounting, management information, human resources and other administrative systems to permit effective management;
•
difficulty with the assimilation of acquired operations and products;
•
|
{
"ticker": "LIN",
"year": "2024",
"source": "LIN_10K_2024-12-31.html"
}
| 796
| 2
|
CONSOLIDATED RESULTS AND OTHER INFORMATION
The discussion that follows includes a comparison of our results of operations and liquidity and capital resources for the years ended December 31, 2024 and 2023. For the discussion comparing the years ended December 31, 2023 and 2022, refer to Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, of our Form 10-K for the year ended December 31, 2023.
The following table provides summary information for 2024 and 2023. The reported amounts are GAAP amounts from the Consolidated Statements of Income. The adjusted amounts are intended to supplement investors' understanding of the company's financial information and are not a substitute for GAAP measures.
| (Millions of dollars, except per share data) Year Ended December 31, | 2024 | | 2023 | | | | Variance |
| Reported Amounts | | | | | | | |
| Sales | $ | 33,005 | | | $ | 32,854 | | | | | — | % |
| Cost of sales, exclusive of depreciation and amortization | $ | 17,143 | | | $ | 17,492 | | | | | (2) | % |
| As a percent of sales | 51.9 | % | | 53.2 | % | | | | |
| Selling, general and administrative | $ | 3,337 | | | $ | 3,295 | | | | | 1 | % |
| As a percent of sales | 10.1 | % | | 10.0 | % | | | | |
| Depreciation and amortization | $ | 3,780 | | | $ | 3,816 | | | | | (1) | % |
| Cost reduction program and other charges (a) | $ | 145 | | | $ | 40 | | | | | 263 | % |
| Other income (expense) - net | $ | 185 | | | $ | (41) | | | | | 551 | % |
| Operating profit | $ | 8,635 | | | $ | 8,024 | | | | | 8 | % |
| Operating margin | 26.2 | % | | 24.4 | % | | | | |
| Interest expense - net | $ | 256 | | | $ | 200 | | | | | 28 | % |
| Net pension and OPEB cost (benefit), excluding service cost | $ | (190) | | | $ | (164) | | | | | 16 | % |
| Effective tax rate | 23.4 | % | | 22.7 | % | | | | |
| Income from equity investments | $ | 170 | | | $ | 167 | | | | | 2 | % |
| Noncontrolling interests | $ | (172) | | | $ | (142) | | | | | 21 | % |
| Net Income – Linde plc | $ | 6,565 | | | $ | 6,199 | | | | | 6 | % |
| Diluted earnings per share | $ | 13.62 | | | $ | 12.59 | | | | | 8 | % |
| Diluted shares outstanding | 482,092 | | | 492,290 | | | | | (2) | % |
| Number of employees | 65,289 | | | 66,323 | | | | | (2) | % |
| Adjusted Amounts (b) | | | | | | | |
| Operating profit | $ | 9,720 | | | $ | 9,070 | | | | | 7 | % |
| Operating margin | 29.5 | % | | 27.6 | % | | | | |
| Net Income – Linde plc | $ | 7,475 | | | $ | 6,989 | | | | | 7 | % |
| Diluted earnings per share | $ | 15.51 | | | $ | 14.20 | | | | | 9 | % |
| Other Financial Data (b) | | | | | | | |
| EBITDA | $ | 12,585 | | | $ | 12,007 | | | | | 5 | % |
| As percent of sales | 38.1 | % | | 36.5 | % | | | | |
| Adjusted EBITDA | $ | 12,819 | | | $ | 12,133 | | | | | 6 | % |
| As percent of sales | 38.8 | % | | 36.9 | % | | | | |
|
{
"ticker": "LIN",
"year": "2024",
"source": "LIN_10K_2024-12-31.html"
}
| 1,204
| 3
|
The discussion that follows includes a comparison of our results of operations and liquidity and capital resources for the years ended December 31, 2024 and 2023. For the discussion comparing the years ended December 31, 2023 and 2022, refer to Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, of our Form 10-K for the year ended December 31, 2023.
The following table provides summary information for 2024 and 2023. The reported amounts are GAAP amounts from the Consolidated Statements of Income. The adjusted amounts are intended to supplement investors' understanding of the company's financial information and are not a substitute for GAAP measures.
| (Millions of dollars, except per share data) Year Ended December 31, | 2024 | | 2023 | | | | Variance |
| Reported Amounts | | | | | | | |
| Sales | $ | 33,005 | | | $ | 32,854 | | | | | — | % |
| Cost of sales, exclusive of depreciation and amortization | $ | 17,143 | | | $ | 17,492 | | | | | (2) | % |
| As a percent of sales | 51.9 | % | | 53.2 | % | | | | |
| Selling, general and administrative | $ | 3,337 | | | $ | 3,295 | | | | | 1 | % |
| As a percent of sales | 10.1 | % | | 10.0 | % | | | | |
| Depreciation and amortization | $ | 3,780 | | | $ | 3,816 | | | | | (1) | % |
| Cost reduction program and other charges (a) | $ | 145 | | | $ | 40 | | | | | 263 | % |
| Other income (expense) - net | $ | 185 | | | $ | (41) | | | | | 551 | % |
| Operating profit | $ | 8,635 | | | $ | 8,024 | | | | | 8 | % |
| Operating margin | 26.2 | % | | 24.4 | % | | | | |
| Interest expense - net | $ | 256 | | | $ | 200 | | | | | 28 | % |
| Net pension and OPEB cost (benefit), excluding service cost | $ | (190) | | | $ | (164) | | | | | 16 | % |
| Effective tax rate | 23.4 | % | | 22.7 | % | | | | |
| Income from equity investments | $ | 170 | | | $ | 167 | | | | | 2 | % |
| Noncontrolling interests | $ | (172) | | | $ | (142) | | | | | 21 | % |
| Net Income – Linde plc | $ | 6,565 | | | $ | 6,199 | | | | | 6 | % |
| Diluted earnings per share | $ | 13.62 | | | $ | 12.59 | | | | | 8 | % |
| Diluted shares outstanding | 482,092 | | | 492,290 | | | | | (2) | % |
| Number of employees | 65,289 | | | 66,323 | | | | | (2) | % |
| Adjusted Amounts (b) | | | | | | | |
| Operating profit | $ | 9,720 | | | $ | 9,070 | | | | | 7 | % |
| Operating margin | 29.5 | % | | 27.6 | % | | | | |
| Net Income – Linde plc | $ | 7,475 | | | $ | 6,989 | | | | | 7 | % |
| Diluted earnings per share | $ | 15.51 | | | $ | 14.20 | | | | | 9 | % |
| Other Financial Data (b) | | | | | | | |
| EBITDA | $ | 12,585 | | | $ | 12,007 | | | | | 5 | % |
| As percent of sales | 38.1 | % | | 36.5 | % | | | | |
| Adjusted EBITDA | $ | 12,819 | | | $ | 12,133 | | | | | 6 | % |
| As percent of sales | 38.8 | % | | 36.9 | % | | | | |
________________________
|
{
"ticker": "LIN",
"year": "2024",
"source": "LIN_10K_2024-12-31.html"
}
| 1,197
| 3
|
The policies discussed below are considered by management to be critical to understanding Linde's financial statements and accompanying notes prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). Their application places significant importance on management's judgment as a result of the need to make estimates of matters that are inherently uncertain. Linde's financial position, results of operations and cash flows could be materially affected if actual results differ from estimates made. These policies are determined by management and have been reviewed by Linde's Audit Committee.
Revenue Recognition
Long-Term Construction Contracts
The company designs and manufactures equipment for air separation and other varied gas production and processing plants manufactured specifically for end customers. Revenues for sale of equipment contracts are generally recognized over time as Linde has an enforceable right to payment for performance completed to date and performance does not create an asset with alternative use. For contracts recognized over time, revenue is recognized primarily using a cost incurred input method. Costs incurred to date relative to total estimated costs at completion are used to measure progress toward satisfying performance obligations. The result is applied to total expected revenue and results in financial statement recognition of revenue in addition to costs incurred to date. Any expected loss on a contract is recognized as an expense immediately. Contract modifications are typically accounted for as part of the existing contract and are recognized as a cumulative adjustment for the inception-to-date effect of such change. We assess performance as progress towards completion is achieved on specific projects, earnings will be impacted by changes to our forecast of revenues and costs on these projects.
The cost incurred input method places considerable importance on accurate estimates of the extent of progress towards completion and may involve estimates on the scope of deliveries and services required to fulfill the contractually defined obligations. The key source of estimation uncertainty is the total estimated costs at completion including material, labor and overhead costs and the resultant state of completion of the contracts. There are inherent uncertainties associated with the estimation process, including technical complexity, duration of construction cycle, potential cost inflation (whether equipment or manpower), and scope considerations all of which may affect the total estimation process. Changes in these estimates may lead to a significant impact on future financial statements.
Pension Benefits
Pension benefits represent financial obligations that will be ultimately settled in the future with employees who meet eligibility requirements. Because of the uncertainties involved in estimating the timing and amount of future payments, significant estimates are required to calculate pension expense and liabilities related to the company's plans. The company utilizes the services of independent actuaries, whose models are used to facilitate these calculations.
Several key assumptions are used in actuarial models to calculate pension expense and liability amounts recorded in the financial statements. Management believes the three most significant variables in the models are the expected long-term rate of return on plan assets, the discount rate, and the expected rate of compensation increase. The actuarial models also use assumptions for various other factors, including long-term inflation rates, employee turnover, retirement age, and mortality. Linde management believes the assumptions used in the actuarial calculations are reasonable, reflect the company's experience and expectations for the future and are within accepted practices in each of the respective geographic locations in which it operates. Actual results in any given year will often differ from actuarial assumptions because of economic and other factors. The sensitivities to each of the key assumptions presented below exclude the impact of special items that occurred during the year.
The weighted-average expected long-term rates of return on pension plan assets were 7.00% for U.S. plans and 6.02% for non-U.S. plans at December 31, 2024 (7.00% and 5.64%, respectively at December 31, 2023). The expected long-term rate of return on the U.S. and Non-U.S. plan assets is estimated based on the plans' investment strategy and asset allocation, historical capita
|
{
"ticker": "LIN",
"year": "2024",
"source": "LIN_10K_2024-12-31.html"
}
| 773
| 3
|
Long-lived assets, including property, plant and equipment and finite-lived other intangible assets, are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an individual asset or asset group may not be recoverable. For purposes of this test, asset groups are determined based upon the lowest level for which there are independent and identifiable cash flows. Based upon Linde's business model an asset group may be a single plant and related assets used to support on-site, merchant and packaged gas customers. Alternatively, the asset group may be a collection of distribution related assets (cylinders, distribution centers, and stores) or be a pipeline complex which includes multiple interdependent plants and related assets connected by pipelines within a geographic area used to support the same distribution methods. As a result of the Russia-Ukraine conflict, Linde deconsolidated its Russian gas and engineering business entities as of June 30, 2022. See Note 3 to the consolidated financial statements.
Income Taxes
At December 31, 2024, Linde had deferred tax assets of $1,289 million (net of valuation allowances of $146 million), and deferred tax liabilities of $6,520 million. At December 31, 2024, uncertain tax positions totaled $292 million (see Note 1 and Note 5 to the consolidated financial statements). Income tax expense was $2,002 million for the year ended December 31, 2024, or about 23.4% of pre-tax income (see Note 5 to the consolidated financial statements for additional information related to taxes).
In the preparation of consolidated financial statements, Linde estimates income taxes based on diverse legislative and regulatory structures that exist in various jurisdictions where the company conducts business. Deferred income tax assets and liabilities represent tax benefits or obligations that arise from temporary differences due to differing treatment of certain items for accounting and income tax purposes. Linde evaluates deferred tax assets each period to ensure that estimated future taxable income will be sufficient in character (e.g. capital gain versus ordinary income treatment), amount and timing to result in their recovery. A valuation allowance is established when management determines that it is more likely than not that a deferred tax asset will not be realized to reduce the assets to their realizable value. Considerable judgments are required in establishing deferred tax valuation allowances and in assessing exposures related to tax matters. As events and circumstances change, related reserves and valuation allowances are adjusted to income at that time. Linde's tax returns are subject to audit and local taxing authorities could challenge the company's tax positions. The company's practice is to review tax filing positions by jurisdiction and to record provisions for uncertain income tax positions, including interest and penalties when applicable. Linde believes it records and/or discloses such potential tax liabilities as appropriate and has reasonably estimated its income tax liabilities and recoverable tax assets. If new information becomes available, adjustments are charged or credited against income at that time. Management does not anticipate that such adjustments would have a material adverse effect on the company's consolidated financial position or liquidity; however, it is possible that the final outcomes could have a material impact on the company's reported results of operations.
Contingencies
The company accrues liabilities for non-income tax contingencies when management believes that a loss is probable and the amounts can be reasonably estimated, while contingent gains are recognized only when realized or realizable. If new information becomes available or losses are sustained in excess of recorded amounts, adjustments are charged against income at that time. Management does not anticipate that in the aggregate such losses would have a material adverse effect on the company's consolidated financial position or liquidity; however, it is possible that the final outcomes could have a material impact on the company's reported results of operations.
|
{
"ticker": "LIN",
"year": "2024",
"source": "LIN_10K_2024-12-31.html"
}
| 750
| 3
|
To manage these risks, Linde uses various derivative financial instruments, including interest-rate swaps, treasury rate locks, currency swaps, forward contracts, and commodity contracts. Linde only uses commonly traded and non-leveraged instruments. These contracts are entered into primarily with major banking institutions thereby minimizing the risk of credit loss. Also, see Note 1 and Note 12 to the consolidated financial statements for a more complete description of Linde's accounting policies and use of such instruments.
The following discussion presents the sensitivity of the market value, earnings and cash flows of Linde's financial instruments to hypothetical changes in interest and exchange rates assuming these changes occurred at December 31, 2024. The range of changes chosen for these discussions reflects Linde's view of changes which are reasonably possible over a one-year period. Market values represent the present values of projected future cash flows based on interest rate and exchange rate assumptions.
Interest Rate Risk
At December 31, 2024, Linde had debt totaling $21,623 million ($19,373 million at December 31, 2023). For fixed-rate instruments, interest rate changes affect the fair market value but do not impact earnings or cash flows. Conversely, for floating-rate instruments, interest rate changes generally do not affect the fair market value of the instrument but impact future earnings and cash flows, assuming that other factors are held constant. At December 31, 2024, including the impact of derivatives, Linde had fixed-rate debt of $17,584 million and floating-rate debt of $4,039 million, representing 81% and 19%, respectively, of total debt. At December 31, 2023, including the impact of derivatives, Linde had fixed-rate debt of $14,345 million and floating-rate debt of $5,028 million, representing 74% and 26%, respectively, of total debt.
Fixed Rate Debt
This sensitivity analysis assumes that, holding all other variables constant (such as foreign exchange rates, swaps and debt levels), a one hundred basis point increase in interest rates would decrease the unrealized fair market value of the fixed-rate debt portfolio by approximately $918 million ($742 million in 2023). Linde has historically used interest rate swaps and as a result carried derivative assets subject to interest rate risk. All active swaps have been unwound or matured as of December 31, 2024; therefore, the effect of a one hundred basis point increase in interest rates would be $0 as of December 31, 2024 ($65 million increase to derivative assets recorded as of December 31, 2023).
Variable Rate Debt
At December 31, 2024, the after-tax earnings and cash flows impact of a one hundred basis point increase in interest rates, including offsetting impact of derivatives, on the variable-rate debt portfolio would be approximately $40 million ($50 million in 2023). Any such increase would be partially mitigated by higher interest earned on deposits of cash.
Foreign Currency Risk
Linde's exchange-rate exposures result primarily from its investments and ongoing operations in Latin America (primarily Brazil and Mexico), Europe (primarily Germany, Scandinavia, and the U.K.), Canada, Asia Pacific (primarily Australia and China) and other business transactions such as the procurement of equipment from foreign sources. Linde frequently utilizes currency contracts to hedge these exposures. At December 31, 2024, Linde had a notional amount outstanding of $11,942 million ($5,651 million at December 31, 2023) related to foreign exchange contracts. The majority of these were to hedge recorded balance sheet exposures, primarily intercompany loans denominated in non-functional currencies. See Note 12 to the consolidated financial statements.
|
{
"ticker": "LIN",
"year": "2024",
"source": "LIN_10K_2024-12-31.html"
}
| 756
| 3
|
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Linde plc and its subsidiaries (the "Company") as of December 31, 2024 and 2023, and the related consolidated statements of income, of comprehensive income, of equity and of cash flows for each of the three years in the period ended December 31, 2024, including the related notes (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in
Internal Control - Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in
Internal Control - Integrated Framework
(2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Company's consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
|
{
"ticker": "LIN",
"year": "2024",
"source": "LIN_10K_2024-12-31.html"
}
| 664
| 2
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
LINDE PLC AND SUBSIDIARIES
(Millions of dollars)
| Year Ended December 31, | 2024 | | 2023 | | 2022 |
| Increase (Decrease) in Cash and Cash Equivalents | | | | | |
| Operations | | | | | |
| Net income – Linde plc | $ | 6,565 | | | $ | 6,199 | | | $ | 4,147 | |
| Add: Noncontrolling interests | 172 | | | 142 | | | 134 | |
| Net Income (including noncontrolling interests) | $ | 6,737 | | | $ | 6,341 | | | $ | 4,281 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | |
| Cost reduction program and other charges | 31 | | | ( 118 ) | | | 902 | |
| Depreciation and amortization | 3,780 | | | 3,816 | | | 4,204 | |
| Deferred income taxes | ( 142 ) | | | ( 84 ) | | | ( 383 ) | |
| Share-based compensation | 160 | | | 141 | | | 107 | |
| Non-cash charges and other | ( 72 ) | | | 43 | | | ( 49 ) | |
| Working capital | | | | | |
| Accounts receivable | ( 160 ) | | | ( 86 ) | | | ( 423 ) | |
| Contract assets and liabilities, net | ( 409 ) | | | ( 168 ) | | | 310 | |
| Inventory | 56 | | | ( 127 ) | | | ( 347 ) | |
| Prepaid and other current assets | ( 55 ) | | | 66 | | | ( 157 ) | |
| Payables and accruals | ( 277 ) | | | ( 168 ) | | | 307 | |
| Pension contributions | ( 35 ) | | | ( 46 ) | | | ( 51 ) | |
| Long-term assets, liabilities and other | ( 191 ) | | | ( 305 ) | | | 163 | |
| Net cash provided by operating activities | 9,423 | | | 9,305 | | | 8,864 | |
| Investing | | | | | |
| Capital expenditures | ( 4,497 ) | | | ( 3,787 ) | | | ( 3,173 ) | |
| Acquisitions, net of cash acquired | ( 317 ) | | | ( 953 ) | | | ( 110 ) | |
| Divestitures, net of cash divested and asset sales | 170 | | | 70 | | | 195 | |
| Net cash used for investing activities | ( 4,644 ) | | | ( 4,670 ) | | | ( 3,088 ) | |
| Financing | | | | | |
| Short-term debt borrowings (repayments) – net | ( 372 ) | | | 554 | | | 3,050 | |
| Long-term debt borrowings | 4,844 | | | 2,188 | | | 3,210 | |
| Long-term debt repayments | ( 1,305 ) | | | ( 1,682 ) | | | ( 1,785 ) | |
| Issuances of ordinary shares | 31 | | | 33 | | | 36 | |
| Purchases of ordinary shares | ( 4,482 ) | | | ( 3,958 ) | | | ( 5,168 ) | |
| Cash dividends - Linde plc shareholders | ( 2,655 ) | | | ( 2,482 ) | | | ( 2,344 ) | |
| Noncontrolling interest transactions and other | ( 420 ) | | | ( 53 ) | | | ( 88 ) | |
| Net cash used for financing activities | ( 4,359 ) | | | ( 5,400 ) | | | ( 3,089 ) | |
| Effect of exchange rate changes on cash and cash equivalents | ( 234 ) | | | ( 7 ) | | | ( 74 ) | |
| Change in cash and cash equivalents | 186 | | | ( 772 ) | | | 2,613 | |
| Cash and cash equivalents, beginning-of-period | 4,664 | | | 5,436 | | | 2,823 | |
| Cash and cash equivalents, end-of-period | $ | 4,850 | | | $ | 4,664 | | | $ | 5,436 | |
| Supplemental Data | | | | | |
| Income taxes paid | $ | 2,216 | | | $ | 1,955 | | | $ | 1,735 | |
| Interest paid, net of capitalized interest | $ | 443 | | | $ | 451 | | | $ | 170 | |
|
{
"ticker": "LIN",
"year": "2024",
"source": "LIN_10K_2024-12-31.html"
}
| 1,307
| 2
|
The following table summarizes the impact of the company's derivatives on the consolidated statements of income:
| (Millions of dollars) | Amount of Pre-Tax Gain (Loss) Recognized in Earnings * |
| Year Ended December 31, | 2024 | | 2023 | | 2022 |
| Derivatives Not Designated as Hedging Instruments | | | | | |
| Currency contracts: | | | | | |
| Balance sheet items: | | | | | |
| Debt-related | $ | 88 | | | $ | 91 | | | $ | 12 | |
| Other balance sheet items | — | | | ( 1 ) | | | 8 | |
| Total | $ | 88 | | | $ | 90 | | | $ | 20 | |
* The gains (losses) on balance sheet items are offset by gains (losses) recorded on the underlying hedged assets and liabilities. Accordingly, the gains (losses) for the derivatives and the underlying hedged assets and liabilities related to debt items are recorded in the consolidated statements of income as interest expense-net. Other balance sheet items and anticipated net income gains (losses) are recorded in the consolidated statements of income as other income (expenses)-net.
The amounts of gain or loss recognized in accumulated other comprehensive income (loss) and reclassified to the consolidated statements of income were not material for the years ended December 31, 2024, 2023, and 2022. Net impacts expected to be reclassified to earnings during the next twelve months are also not material.
NOTE 13.
FAIR VALUE DISCLOSURES
The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels as follows:
Level 1 – quoted prices in active markets for identical assets or liabilities
Level 2 – quoted prices for similar assets and liabilities in active markets or inputs that are observable
Level 3 – inputs that are unobservable (for example, cash flow modeling inputs based on assumptions)
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table summarizes assets and liabilities measured at fair value on a recurring basis at December 31, 2024 and 2023:
|
{
"ticker": "LIN",
"year": "2024",
"source": "LIN_10K_2024-12-31.html"
}
| 489
| 3
|
Red Zone plans, deemed
to be in "critical" or "critical and declining" status that
have implemented financial improvement or rehabilitation plans. Linde does not currently anticipate significant future obligations due to the funding status of these plans and any such obligation would be immaterial. If Li
nde determined it was probable that it would withdraw from an MEP, the company would record a liability for its portion of the MEP's unfunded pension obligations, as calculated at that time. Historically, such withdrawal payments have not been significant.
Defined Contribution Plans
Linde's U.S. employees are eligible to participate in defined contribution savings plans offered by their applicable business. Employee contribution percentages vary by plan and are subject to the maximum allowable by IRS regulations. The cost for these defined contribution plans was $
69
million in
2024
, $
59
million in
2023
and $
56
million in
2022
(these costs are not included in the tables that follow).
The defined contribution plans include a non-leveraged employee stock ownership plan ("ESOP") which covers all employees participating in this plan. The collective number of shares of Linde ordinary shares in the ESOP totaled
1,578,863
at
December 31, 2024
.
Certain non-U.S. subsidiaries of the company also sponsor defined contribution plans where contributions are determined under various formulas. The expense for these plans was $
62
million in
2024
, $
60
million in
2023
and $
80
million in
2022
(these expenses are not included in the tables that follow).
Postretirement Benefits Other Than Pensions (OPEB)
Linde provides health care and life insurance benefits to certain eligible retired employees. These benefits are provided through various insurance companies and healthcare providers. The company does not currently fund its postretirement benefits obligations. Linde's retiree plans may be changed or terminated by Linde at any time for any reason with no liability to current or future retirees.
Linde uses a measurement date of December 31 for its pension and other post-retirement benefit plans.
Pension and Postretirement Benefit Costs
The components of net pension and postretirement benefits other than pension ("OPEB") costs for 2024, 2023 and 2022 are shown in the table below:
| (Millions of dollars) | Year Ended December 31, |
| 2024 | | 2023 | | 2022 |
| Amount recognized in Operating Profit | | | | | |
| Service cost | $ | 84 | | | $ | 84 | | | $ | 127 | |
| Amount recognized in Net pension and OPEB cost (benefit), excluding service cost | | | | | |
| Interest cost | 362 | | | 373 | | | 201 | |
| Expected return on plan assets | ( 552 ) | | | ( 523 ) | | | ( 518 ) | |
| Net amortization and deferral | ( 10 ) | | | ( 30 ) | | | 74 | |
| Settlement charges (a) | 10 | | | 16 | | | 6 | |
| | $ | ( 190 ) | | | $ | ( 164 ) | | | $ | ( 237 ) | |
| Net periodic benefit cost (benefit) | $ | ( 106 ) | | | $ | ( 80 ) | | | $ | ( 110 ) | |
(a) Settlement charges were triggered by lump sum benefit payments.
Funded Status
|
{
"ticker": "LIN",
"year": "2024",
"source": "LIN_10K_2024-12-31.html"
}
| 763
| 2
|
IT systems play a crucial role in conducting our business. These systems are utilized to process a very high volume of transactions, conduct payment transactions, track and value our inventory and produce reports critical for making business decisions. Failure or disruption of these systems could have an adverse impact on our ability to buy products and services from our suppliers, produce goods in our manufacturing plants, move the products in an efficient manner to our warehouses and sell products to our members. Given the high volume of transactions we process, it is important that we build strong digital resiliency to prevent disruption from events such as power outages, computer and telecommunications failures, viruses, internal or external security breaches and other cybersecurity incidents, errors by employees, extreme weather, and catastrophic events. Any debilitating failure of our critical IT systems, data centers and backup systems would require significant investments in resources to restore IT services and may cause serious impairment in our business operations including loss of business services, increased cost of moving merchandise and failure to provide service to our members. We are currently making substantial investments in technology and IT transformation projects, including maintaining and enhancing our digital resiliency, and failure or delay in these projects could be costly and harmful to our business. Failure to deliver IT transformation efforts efficiently and effectively could result in the loss of our competitive position and adversely impact our financial condition and results of operations. Insufficient IT capacity could also impact our capacity for timely, complete and accurate financial and non-financial reporting required by law.
We are required to maintain the privacy and security of personal and business information amidst multiplying threat landscapes and in compliance with increasing privacy and data protection regulations globally. Failure to do so could damage our business, including our reputation with members, suppliers and employees, cause us to incur substantial additional costs, and become subject to litigation and regulatory action.
Increased security threats and more sophisticated cyber misconduct pose a risk to our systems, networks, products and services. We rely upon IT systems and networks, some of which are managed by or belong to third parties, including suppliers, partners, vendors, and service providers. Additionally, we collect, store and process sensitive information relating to our business, members, employees, and other third parties. Operating these IT systems and networks, and processing and maintaining this data, in a secure manner, is critical to our business operations and strategy. Remote work has also expanded the possible attack surfaces. Attempts to gain unauthorized access to systems, networks and data, both ours and third parties with whom we work, are increasing in frequency and sophistication, and in some cases, these attempts are successful. Cybersecurity attacks may range from random attempts to coordinated and targeted attacks, including sophisticated computer crimes and advanced persistent threats. Phishing attacks have emerged as particularly prominent, including as vectors for ransomware attacks, which have increased in breadth and frequency. While we train our employees as part of our security efforts, that training cannot be completely effective. These threats pose a risk to the security of our systems and networks and the confidentiality, integrity, and availability of our data. Our IT systems and networks, or those managed by third parties such as cloud providers or suppliers that otherwise host or have access to confidential information, periodically have vulnerabilities, which may go unnoticed for a period of time. Our logging capabilities, or the logging capabilities of third parties, are also not always complete or sufficiently detailed, affecting our ability to fully investigate and understand the scope of security events. While our cybersecurity and compliance efforts seek to mitigate such risks, there can be no guarantee that the actions and controls we and our third-party service providers have implemented and are implementing, will be sufficient to protect our systems, information or other property.
The potential impacts of a cybersecurity attack include reputational damage, litigation, government enforcement actions, penalties, disruption to systems and operations, unauthorized release of confidential or otherwise protected information, corruption of data, diminution in the value of our investment in IT systems and increased cybersecurity protection and remediation costs. This could adversely affect our competitiveness, results of operations and financial condition and, critically in light of our business model, loss of member confidence. Further, the insurance coverage we maintain and indemnification arrangements with third parties may be inadequate to cover claims, costs, and liabilities relating to
|
{
"ticker": "COST",
"year": "2024",
"source": "COST_10K_2024-09-01.html"
}
| 839
| 4
|
13
Table of Contents
General economic factors, domestically and internationally, may adversely affect our business, financial condition, and results of operations.
Higher energy and gasoline costs, inflation, levels of unemployment, healthcare costs, consumer debt levels, foreign-currency exchange rates, unsettled financial markets, weaknesses in housing and real estate markets, reduced consumer confidence, changes and uncertainties related to government fiscal, monetary and tax policies including changes in interest rates, tax rates, duties, tariffs, or other restrictions, sovereign debt crises, pandemics and other health crises, and other economic factors could adversely affect demand for our products and services, require a change in product mix, or impact the cost of or ability to purchase inventory. Additionally, trade-related actions in various countries, particularly China and the United States, have affected the costs of some of our merchandise. The degree of our exposure is dependent on (among other things) the type of goods, rates imposed, and timing of the tariffs. The impact to our net sales and gross margin is influenced in part by our merchandising and pricing strategies in response to potential cost increases. Higher tariffs could adversely impact our results.
Prices of certain commodities, including gasoline and consumable goods used in manufacturing and our warehouse retail operations, are historically volatile and are subject to fluctuations arising from changes in domestic and international supply and demand, inflationary pressures, labor costs, competition, market speculation, government regulations, taxes and periodic delays in delivery. Rapid and significant changes in commodity prices and our ability and desire to pass them through to our members may affect our sales and profit margins. These factors could also increase our merchandise costs and selling, general and administrative expenses, and otherwise adversely affect our operations and financial results. General economic conditions can also be affected by events like the outbreak of hostilities or acts of terrorism.
Inflationary factors such as increases in merchandise costs may adversely affect our business, financial condition and results of operations. We may not be able to adjust prices to sufficiently offset the effect of cost increases without negatively impacting consumer demand.
Suppliers may be unable to timely supply us with quality merchandise at competitive prices or may fail to adhere to our high standards, resulting in adverse effects on our business, merchandise inventories, sales, and profit margins.
We depend heavily on our ability to purchase quality merchandise in sufficient quantities at competitive prices. As the quantities we require continue to grow, we have no assurances of continued supply, appropriate pricing or access to new products, and any supplier has the ability to change the terms upon which they sell to us or discontinue selling to us. Member demands may lead to out-of-stock positions causing a loss of sales and profits.
We buy from numerous domestic and foreign suppliers and importers. Our inability to acquire suitable merchandise on acceptable terms or the loss of key suppliers could negatively affect us. We may not be able to develop relationships with new suppliers, and products from alternative sources, if any, may be of a lesser quality or more expensive. Because of our efforts to adhere to high-quality standards for which available supply may be limited, particularly for certain food items, the large volumes we demand may not be consistently available. Our efforts to secure supply could lead to commitments that prove to be unsuccessful in the short and long-term.
Our suppliers (and those they depend upon for materials and services) are subject to risks, including labor disputes, union organizing activities, human and animal rights violations, financial liquidity, climate change, natural disasters, extreme weather conditions, environmental degradation, public health emergencies, supply constraints and general economic and political conditions and other risks similar to those we face that could limit their ability to timely provide us with acceptable merchandise. One or more of our suppliers might not adhere to our quality control, packaging, legal, regulatory, labor, human rights, environmental or animal welfare standards. These deficiencies may delay or preclude delivery of merchandise to us and might not be identified before we sell such merchandise to our members. This
14
Table of Contents
|
{
"ticker": "COST",
"year": "2024",
"source": "COST_10K_2024-09-01.html"
}
| 794
| 3
|
COSTCO WHOLESALE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in millions)
| | 52 Weeks Ended | | 53 Weeks Ended | | 52 Weeks Ended |
| | September 1, 2024 | | September 3, 2023 | | August 28, 2022 |
| CASH FLOWS FROM OPERATING ACTIVITIES | | | | | |
| Net income including noncontrolling interests | $ | 7,367 | | | $ | 6,292 | | | $ | 5,915 | |
| Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities: | | | | | |
| Depreciation and amortization | 2,237 | | | 2,077 | | | 1,900 | |
| Non-cash lease expense | 315 | | | 412 | | | 377 | |
| Stock-based compensation | 818 | | | 774 | | | 724 | |
| Impairment of assets and other non-cash operating activities, net | ( 9 ) | | | 495 | | | 39 | |
| Changes in operating assets and liabilities: | | | | | |
| Merchandise inventories | ( 2,068 ) | | | 1,228 | | | ( 4,003 ) | |
| Accounts payable | 1,938 | | | ( 382 ) | | | 1,891 | |
| Other operating assets and liabilities, net | 741 | | | 172 | | | 549 | |
| Net cash provided by operating activities | 11,339 | | | 11,068 | | | 7,392 | |
| CASH FLOWS FROM INVESTING ACTIVITIES | | | | | |
| Purchases of short-term investments | ( 1,470 ) | | | ( 1,622 ) | | | ( 1,121 ) | |
| Maturities and sales of short-term investments | 1,790 | | | 937 | | | 1,145 | |
| Additions to property and equipment | ( 4,710 ) | | | ( 4,323 ) | | | ( 3,891 ) | |
| Other investing activities, net | ( 19 ) | | | 36 | | | ( 48 ) | |
| Net cash used in investing activities | ( 4,409 ) | | | ( 4,972 ) | | | ( 3,915 ) | |
| CASH FLOWS FROM FINANCING ACTIVITIES | | | | | |
| Repayments of short-term borrowings | ( 920 ) | | | ( 935 ) | | | ( 6 ) | |
| Proceeds from short-term borrowings | 928 | | | 917 | | | 53 | |
| Repayments of long-term debt | ( 1,077 ) | | | ( 75 ) | | | ( 800 ) | |
| Proceeds from issuance of long-term debt | 498 | | | — | | | — | |
| Tax withholdings on stock-based awards | ( 315 ) | | | ( 303 ) | | | ( 363 ) | |
| Repurchases of common stock | ( 700 ) | | | ( 676 ) | | | ( 439 ) | |
| Cash dividend payments | ( 9,041 ) | | | ( 1,251 ) | | | ( 1,498 ) | |
| Financing lease payments and other financing activities, net | ( 137 ) | | | ( 291 ) | | | ( 180 ) | |
| Dividend to noncontrolling interest | — | | | — | | | ( 208 ) | |
| Acquisition of noncontrolling interest | — | | | — | | | ( 842 ) | |
| Net cash used in financing activities | ( 10,764 ) | | | ( 2,614 ) | | | ( 4,283 ) | |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 40 | | | 15 | | | ( 249 ) | |
| Net change in cash and cash equivalents | ( 3,794 ) | | | 3,497 | | | ( 1,055 ) | |
| CASH AND CASH EQUIVALENTS BEGINNING OF YEAR | 13,700 | | | 10,203 | | | 11,258 | |
| CASH AND CASH EQUIVALENTS END OF YEAR | $ | 9,906 | | | $ | 13,700 | | | $ | 10,203 | |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | | | | | |
| Cash paid during the year for: | | | | | |
| Interest | $ | 129 | | | $ | 125 | | | $ | 145 | |
| Income taxes, net | $ | 2,319 | | | $ | 2,234 | | | $ | 1,940 | |
| SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: | | | | | |
| Cash dividend declared, but not yet paid | $ | — | | | $ | 452 | | | $ | — | |
| Capital expenditures included in liabilities | $ | 203 | | | $ | 170 | | | $ | 156 | |
|
{
"ticker": "COST",
"year": "2024",
"source": "COST_10K_2024-09-01.html"
}
| 1,368
| 2
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in millions)
| | 52 Weeks Ended | | 53 Weeks Ended | | 52 Weeks Ended |
| | September 1, 2024 | | September 3, 2023 | | August 28, 2022 |
| CASH FLOWS FROM OPERATING ACTIVITIES | | | | | |
| Net income including noncontrolling interests | $ | 7,367 | | | $ | 6,292 | | | $ | 5,915 | |
| Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities: | | | | | |
| Depreciation and amortization | 2,237 | | | 2,077 | | | 1,900 | |
| Non-cash lease expense | 315 | | | 412 | | | 377 | |
| Stock-based compensation | 818 | | | 774 | | | 724 | |
| Impairment of assets and other non-cash operating activities, net | ( 9 ) | | | 495 | | | 39 | |
| Changes in operating assets and liabilities: | | | | | |
| Merchandise inventories | ( 2,068 ) | | | 1,228 | | | ( 4,003 ) | |
| Accounts payable | 1,938 | | | ( 382 ) | | | 1,891 | |
| Other operating assets and liabilities, net | 741 | | | 172 | | | 549 | |
| Net cash provided by operating activities | 11,339 | | | 11,068 | | | 7,392 | |
| CASH FLOWS FROM INVESTING ACTIVITIES | | | | | |
| Purchases of short-term investments | ( 1,470 ) | | | ( 1,622 ) | | | ( 1,121 ) | |
| Maturities and sales of short-term investments | 1,790 | | | 937 | | | 1,145 | |
| Additions to property and equipment | ( 4,710 ) | | | ( 4,323 ) | | | ( 3,891 ) | |
| Other investing activities, net | ( 19 ) | | | 36 | | | ( 48 ) | |
| Net cash used in investing activities | ( 4,409 ) | | | ( 4,972 ) | | | ( 3,915 ) | |
| CASH FLOWS FROM FINANCING ACTIVITIES | | | | | |
| Repayments of short-term borrowings | ( 920 ) | | | ( 935 ) | | | ( 6 ) | |
| Proceeds from short-term borrowings | 928 | | | 917 | | | 53 | |
| Repayments of long-term debt | ( 1,077 ) | | | ( 75 ) | | | ( 800 ) | |
| Proceeds from issuance of long-term debt | 498 | | | — | | | — | |
| Tax withholdings on stock-based awards | ( 315 ) | | | ( 303 ) | | | ( 363 ) | |
| Repurchases of common stock | ( 700 ) | | | ( 676 ) | | | ( 439 ) | |
| Cash dividend payments | ( 9,041 ) | | | ( 1,251 ) | | | ( 1,498 ) | |
| Financing lease payments and other financing activities, net | ( 137 ) | | | ( 291 ) | | | ( 180 ) | |
| Dividend to noncontrolling interest | — | | | — | | | ( 208 ) | |
| Acquisition of noncontrolling interest | — | | | — | | | ( 842 ) | |
| Net cash used in financing activities | ( 10,764 ) | | | ( 2,614 ) | | | ( 4,283 ) | |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 40 | | | 15 | | | ( 249 ) | |
| Net change in cash and cash equivalents | ( 3,794 ) | | | 3,497 | | | ( 1,055 ) | |
| CASH AND CASH EQUIVALENTS BEGINNING OF YEAR | 13,700 | | | 10,203 | | | 11,258 | |
| CASH AND CASH EQUIVALENTS END OF YEAR | $ | 9,906 | | | $ | 13,700 | | | $ | 10,203 | |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | | | | | |
| Cash paid during the year for: | | | | | |
| Interest | $ | 129 | | | $ | 125 | | | $ | 145 | |
| Income taxes, net | $ | 2,319 | | | $ | 2,234 | | | $ | 1,940 | |
| SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: | | | | | |
| Cash dividend declared, but not yet paid | $ | — | | | $ | 452 | | | $ | — | |
| Capital expenditures included in liabilities | $ | 203 | | | $ | 170 | | | $ | 156 | |
The accompanying notes are an integral part of these consolidated financial statements.
|
{
"ticker": "COST",
"year": "2024",
"source": "COST_10K_2024-09-01.html"
}
| 1,372
| 2
|
(amounts in millions)
| | 52 Weeks Ended | | 53 Weeks Ended | | 52 Weeks Ended |
| | September 1, 2024 | | September 3, 2023 | | August 28, 2022 |
| CASH FLOWS FROM OPERATING ACTIVITIES | | | | | |
| Net income including noncontrolling interests | $ | 7,367 | | | $ | 6,292 | | | $ | 5,915 | |
| Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities: | | | | | |
| Depreciation and amortization | 2,237 | | | 2,077 | | | 1,900 | |
| Non-cash lease expense | 315 | | | 412 | | | 377 | |
| Stock-based compensation | 818 | | | 774 | | | 724 | |
| Impairment of assets and other non-cash operating activities, net | ( 9 ) | | | 495 | | | 39 | |
| Changes in operating assets and liabilities: | | | | | |
| Merchandise inventories | ( 2,068 ) | | | 1,228 | | | ( 4,003 ) | |
| Accounts payable | 1,938 | | | ( 382 ) | | | 1,891 | |
| Other operating assets and liabilities, net | 741 | | | 172 | | | 549 | |
| Net cash provided by operating activities | 11,339 | | | 11,068 | | | 7,392 | |
| CASH FLOWS FROM INVESTING ACTIVITIES | | | | | |
| Purchases of short-term investments | ( 1,470 ) | | | ( 1,622 ) | | | ( 1,121 ) | |
| Maturities and sales of short-term investments | 1,790 | | | 937 | | | 1,145 | |
| Additions to property and equipment | ( 4,710 ) | | | ( 4,323 ) | | | ( 3,891 ) | |
| Other investing activities, net | ( 19 ) | | | 36 | | | ( 48 ) | |
| Net cash used in investing activities | ( 4,409 ) | | | ( 4,972 ) | | | ( 3,915 ) | |
| CASH FLOWS FROM FINANCING ACTIVITIES | | | | | |
| Repayments of short-term borrowings | ( 920 ) | | | ( 935 ) | | | ( 6 ) | |
| Proceeds from short-term borrowings | 928 | | | 917 | | | 53 | |
| Repayments of long-term debt | ( 1,077 ) | | | ( 75 ) | | | ( 800 ) | |
| Proceeds from issuance of long-term debt | 498 | | | — | | | — | |
| Tax withholdings on stock-based awards | ( 315 ) | | | ( 303 ) | | | ( 363 ) | |
| Repurchases of common stock | ( 700 ) | | | ( 676 ) | | | ( 439 ) | |
| Cash dividend payments | ( 9,041 ) | | | ( 1,251 ) | | | ( 1,498 ) | |
| Financing lease payments and other financing activities, net | ( 137 ) | | | ( 291 ) | | | ( 180 ) | |
| Dividend to noncontrolling interest | — | | | — | | | ( 208 ) | |
| Acquisition of noncontrolling interest | — | | | — | | | ( 842 ) | |
| Net cash used in financing activities | ( 10,764 ) | | | ( 2,614 ) | | | ( 4,283 ) | |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 40 | | | 15 | | | ( 249 ) | |
| Net change in cash and cash equivalents | ( 3,794 ) | | | 3,497 | | | ( 1,055 ) | |
| CASH AND CASH EQUIVALENTS BEGINNING OF YEAR | 13,700 | | | 10,203 | | | 11,258 | |
| CASH AND CASH EQUIVALENTS END OF YEAR | $ | 9,906 | | | $ | 13,700 | | | $ | 10,203 | |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | | | | | |
| Cash paid during the year for: | | | | | |
| Interest | $ | 129 | | | $ | 125 | | | $ | 145 | |
| Income taxes, net | $ | 2,319 | | | $ | 2,234 | | | $ | 1,940 | |
| SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: | | | | | |
| Cash dividend declared, but not yet paid | $ | — | | | $ | 452 | | | $ | — | |
| Capital expenditures included in liabilities | $ | 203 | | | $ | 170 | | | $ | 156 | |
The accompanying notes are an integral part of these consolidated financial statements.
40
|
{
"ticker": "COST",
"year": "2024",
"source": "COST_10K_2024-09-01.html"
}
| 1,362
| 2
|
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