⚠ Three Billion Shares and RisingModerate threat

Oracle (ORCL) — threat to the moat

Oracle's share count has risen about 6% since fiscal 2024, and a convertible preferred will add more.

Oracle's share count has turned upward. Diluted shares were 2,823 million in fiscal 2024, 2,866 million in fiscal 2025 and 2,914 million in fiscal 20261, and 3,000 million in the first quarter of fiscal 20272. The 141 million shares sold through the at-the-market programme3 were most of the most recent step.

Diluted shares (millions)2,823FY20242,866FY20252,914FY20263,000Q1 FY27Oracle Form 10-K FY2026; Q1 FY2027 results release
Up about 177 million shares.

The preferred stock adds more. The 6.50% Series D mandatory convertible preferred4 converts into common stock, so its $5.0 billion of liquidation value will become additional shares.

Earnings per share still grew because profits grew faster. Diluted earnings per share were $1.56 in the first quarter of fiscal 2027 against $1.015. The test of the dilution is whether that continues when the cloud margin is lower and the interest bill higher.

Larry Ellison, the largest shareholder, is diluted along with everyone else. He owned 40.6% of the shares in September 20256; on the September 2026 share count the same holding would be about 38.3%7.

The warning sign is a quarter in which the share count rises while diluted earnings per share falls year on year. Oracle's own guidance for the second quarter of fiscal 2027 expects non-GAAP earnings per share to decline between 15% and 19% including last year's investment gain8, so the test may come soon.

References
  1. ReportedDiluted shares were 2,823 million in fiscal 2024, 2,866 million in fiscal 2025 and 2,914 million in fiscal 2026, and 3,000 million in the first quarter of fiscal 2027.
    Oracle Corporation Form 10-K for fiscal 2026 (year ended 31 May 2026) - financial statements and notes: income statement, cash flow, borrowings, leases, equity and commitments. — FY2026 · publ. 22 June 2026 · source ↗
  2. ReportedDiluted shares were 2,823 million in fiscal 2024, 2,866 million in fiscal 2025 and 2,914 million in fiscal 2026, and 3,000 million in the first quarter of fiscal 2027.
    Oracle first-quarter fiscal 2027 results release, Form 8-K exhibit 99.1, with supplemental tables - income statement, cash flow statement and balance sheet. — Q1 FY2027 · publ. 10 September 2026 · source ↗
  3. ReportedThe 141 million shares sold through the at-the-market programme were most of the most recent step.
    Oracle Form 10-Q for the quarter ended 31 August 2026 - segments, leases not yet commenced, the ATM share programme, RPO timing and shares outstanding. — Q1 FY2027 · publ. 11 September 2026 · source ↗
  4. ReportedThe 6.50% Series D mandatory convertible preferred converts into common stock, so its $5.0 billion of liquidation value will become additional shares.
    Oracle Form 8-K - 100,000,000 depositary shares of 6.50% Series D mandatory convertible preferred stock. — February 2026 · publ. 5 February 2026 · source ↗
  5. ReportedDiluted earnings per share were $1.56 in the first quarter of fiscal 2027 against $1.01.
    Oracle first-quarter fiscal 2027 results release, Form 8-K exhibit 99.1, with supplemental tables - income statement, cash flow statement and balance sheet. — Q1 FY2027 · publ. 10 September 2026 · source ↗
  6. ReportedHe owned 40.6% of the shares in September 2025; on the September 2026 share count the same holding would be about 38.3%.
    Oracle definitive proxy statement 2025 - beneficial ownership (Ellison 1,158,232,353 shares, 40.6%) and pledged shares. — September 2025 · publ. September 2025 · source ↗
  7. Moat Explorer calcHe owned 40.6% of the shares in September 2025; on the September 2026 share count the same holding would be about 38.3%.
    Moat Explorer calculation from Oracle's reported figures ($ millions unless stated; fiscal years end 31 May). Revenue lines: software support 19,804 / 19,365 - 1 = 2.3% (FY2022-FY2026); support share 19,804 / 67,357 = 29.4%; support Q1 FY2027 4,895 / 4,955 - 1 = -1.2%; licences FY2026 4,737 / 5,201 - 1 = -8.9%; licences Q1 FY2027 655 / 766 - 1 = -14.5%; licences FY2017 to FY2026 4,737 / 6,523 - 1 = -27.4%; fourth-quarter licences 1,881 / 4,737 = 39.7%. Software (licence plus support) FY2022 5,878 + 19,365 = 25,243; FY2023 5,779 + 19,426 = 25,205; FY2026 24,541 / 24,724 - 1 = -0.7%; software share 24,541 / 67,357 = 36.4%. Cloud infrastructure FY2026 18,101 / 10,234 - 1 = 76.9%; FY2024 to FY2026 18,101 / 6,840 = 2.6 times; share 18,101 / 67,357 = 26.9%; Q1 FY2027 share 7,388 / 19,345 = 38.2%; annual run rate 7,388 x 4 = 29,552. Cloud applications FY2025 14,272 / 12,934 - 1 = 10.3%; FY2026 15,888 / 14,272 - 1 = 11.3%; share 15,888 / 67,357 = 23.6%; trailing twelve months 15,888 - 3,839 + 4,219 = 16,268. Applications ecosystem revenue 18,172 / 16,651 - 1 = 9.1%; 19,383 / 18,172 - 1 = 6.7%. Hardware segment margin 2,017 / 3,084 = 65.4% (FY2026); 1,709 / 4,152 = 41.2% (FY2017); 1,903 / 3,443 = 55.3% (FY2020); 1,932 / 3,274 = 59.0% (FY2023); 452 / 774 = 58.4% (Q1 FY2027); hardware revenue 3,084 / 4,152 - 1 = -25.7%; 3,084 / 5,205 - 1 = -40.7%; share 3,084 / 67,357 = 4.6%. Services margin 1,533 / 5,743 = 26.7% (FY2026); 993 / 5,233 = 19.0% (FY2025); 698 / 3,359 = 20.8% (FY2017); 450 / 3,106 = 14.5% (FY2020); 1,104 / 5,594 = 19.7% (FY2023); 445 / 1,414 = 31.5% (Q1 FY2027); services growth 5,743 / 5,233 - 1 = 9.7%; share 5,743 / 67,357 = 8.5%; revenue per services employee 5,743 / 34,000 = about $169,000. Cloud and software segment margin 20,801 / 30,452 = 68.3% (FY2017); 23,169 / 34,101 = 67.9% (FY2021); 26,126 / 41,086 = 63.6% (FY2023); 28,514 / 44,464 = 64.1% (FY2024); 30,930 / 49,230 = 62.8% (FY2025); 34,468 / 58,530 = 58.9% (FY2026); 7,691 / 12,907 = 59.6% (Q1 FY2026); 9,358 / 17,157 = 54.5% (Q1 FY2027); segment expenses 16,850 / 8,783 - 1 = 91.8%; segment revenue 58,530 / 44,464 - 1 = 31.6%; Q1 segment revenue 17,157 / 12,907 - 1 = 32.9%. Revenue growth 67,357 / 57,399 - 1 = 17.3%; FY2022 to FY2026 67,357 / 42,440 - 1 = 58.7%; Cerner share of FY2023 revenue 5,900 / 49,954 = 11.8%. Research and development 10,272 / 5,524 = 1.9 times; 10,272 / 67,357 = 15.3%. Sales and marketing 8,274 / 52,961 = 15.6% (FY2024); 8,651 / 57,399 = 15.1% (FY2025); 8,331 / 67,357 = 12.4% (FY2026); 8,331 / 8,651 - 1 = -3.7%; revenue per dollar of selling 52,961 / 8,274 = 6.4 and 67,357 / 8,331 = 8.1. Operating margin 15,353 / 52,961 = 29.0%; 17,678 / 57,399 = 30.8%; 20,606 / 67,357 = 30.6%; before amortisation (15,353 + 3,010) / 52,961 = 34.7%, (17,678 + 2,307) / 57,399 = 34.8%, (20,606 + 1,671) / 67,357 = 33.1%; amortisation 1,671 / 67,357 = 2.5%; non-GAAP less GAAP operating income 28.9 - 20.6 = 8.3 bn. Headcount 162,000 - 141,000 = 21,000, 21,000 / 162,000 = 13%. Headcount against the fiscal 2023 peak 164,000 - 141,000 = 23,000. Hardware FY2015 to FY2026 3,084 / 5,205 - 1 = -40.7%. Amortisation Q1 420 - 202 = 218. Stock compensation plus restructuring FY2026 4,811 + 1,838 = 6,649. Americas 44,478 / 36,339 - 1 = 22.4%; Americas share 23,679 / 42,440 = 55.8% (FY2022), 33,122 / 52,961 = 62.5% (FY2024), 44,478 / 67,357 = 66.0% (FY2026), 13,711 / 19,345 = 70.9% (Q1 FY2027); Asia Pacific 7,582 / 6,750 - 1 = 12.3%; EMEA plus Asia Pacific Q1 FY2027 3,726 + 1,908 = 5,634. US long-lived assets 102,717 / 45,439 = 2.3 times. Free cash flow FY2025 20,821 - 21,215 = -394; FY2024 18,673 - 6,866 = 11,807. Capital expenditure share of revenue 6,866 / 52,961 = 13%; 21,215 / 57,399 = 37%; 55,663 / 67,357 = 83%; 28,499 / 19,345 = 147%. Property added 127,845 - 99,957 = 27,888. Q1 FY2027 operating cash flow excluding prepayments 23,103 - 11,363 = 11,740; prepayments share 11,363 / 23,103 = 49%; free cash flow excluding prepayments -5,396 - 11,363 = -16,759. Borrowings 130,105 / 87,202 - 1 = 49%; net debt May 2025 92,568 - 10,786 - 417 = 81,365; May 2026 129,541 - 31,289 - 605 = 97,647; August 2026 7,625 + 117,712 - 36,369 - 708 = 88,260. Interest 1,428 / 923 - 1 = 55%; interest over operating income 1,428 / 6,728 = 21%. Leases not yet commenced over borrowings 288 / 125.3 = 2.3 times; over total assets 288 / 303.3 = 95%. Depreciation 3,156 / 1,351 = 2.3 times. Diluted shares 3,000 / 2,823 - 1 = 6.3%, 3,000 - 2,823 = 177 million; Ellison 1,158.2 / 3,023.7 = 38.3%; pledged 346 / 1,158 = 30%. Remaining performance obligations: 664 / 138 = 4.8 times; 664 / 455 - 1 = 46%; next twelve months 12% x 638 = 77 bn and 13% x 664 = 86 bn; beyond 36 months 100% - 13% - 37% = 50%; quarterly increases 455 - 138 = 317, 523 - 455 = 68, 553 - 523 = 30, 638 - 553 = 85, 664 - 638 = 26. Targets: 225 / 67.357 = 3.3 times; 225 - 24.5 = about 200 bn; 144 / 18 = 8 times; 20 / 2.4 = 8.3 times; Q1 FY2027 revenue 19,345 / 90,000 = 21.5% of guidance. Other: total assets 303,259 - 261,759 = 41,500 in one quarter; revenue FY2026 against FY2023 67,357 / 49,954 - 1 = 34.8%; cloud infrastructure Q1 FY2027 over Q4 FY2026 7,388 - 5,787 = 1,601; quarterly steps 4,079 - 3,347 = 732, 4,888 - 4,079 = 809, 5,787 - 4,888 = 899; cloud applications share 3,839 / 14,926 = 25.7% (Q1 FY2026) and 4,219 / 19,345 = 21.8% (Q1 FY2027); dividends over support 5,787 / 19,804 = 29.2%; interest, research and dividends 4,599 + 10,272 + 5,787 = 20,658; support FY2015 to FY2026 19,804 - 18,847 = 957; US revenue share 39,835 / 67,357 = 59.1%. Trailing twelve months to August 2026: revenue 67,357 - 14,926 + 19,345 = 71,776; net income 17,087 - 2,927 + 4,760 = 18,920; diluted EPS 5.83 - 1.01 + 1.56 = 6.38; P/E 421,930 / 18,920 = 22.3; P/S 421,930 / 71,776 = 5.88 - revenue mix, regional shares and concentration. — FY2015-Q1 FY2027 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Oracle's Forms 10-K and 10-Q, results releases and market data; operands shown in the source line.
  8. ReportedOracle's own guidance for the second quarter of fiscal 2027 expects non-GAAP earnings per share to decline between 15% and 19% including last year's investment gain, so the test may come soon.
    Oracle first-quarter fiscal 2027 results release, Form 8-K exhibit 99.1, with supplemental tables - commentary, bookings, capacity delivered and guidance. — Q1 FY2027 · publ. 10 September 2026 · source ↗
Sources
Generated September 25, 2026