What Oracle’s Second Quarter Earnings Report Means for the Java Licensee

If history teaches us anything, it is that when a legacy tech giant like Oracle misses the mark, it is unlikely to just roll over and accept defeat. As such, Oracle’s recent second quarter earnings report — posting sales that missed analysts’ estimates — should be cause for some concern to those who must deal with Oracle. While Oracle continues to fall back on its comeback story around the Cloud and AI, the reality is that Oracle likely needs revenue. Historically, that has meant one thing for customer licensees: more aggressive software licensing enforcement and audits.

That said, now is an especially good time to revisit Oracle’s software licensing and auditing playbook – particularly its playbook regarding Java. With no massive market windfalls on the horizon, it is all too likely that Oracle will continue to push the monetization of its existing customer base. And while we have seen a downturn in Oracle audits in general, Oracle Java licensees remain squarely in the crosshairs.

Oracle’s Comeback Story

Recent analyst commentary reflects Oracle’s attempt to reposition itself as a modern cloud and AI player rather than a somewhat washed-up legacy vendor. As noted in a recent Seeking Alpha analysis:

Oracle (ORCL) is trying to execute a genuine comeback. In 2025, its revenue grew 8% to $57.4 billion, with cloud services and license support rising 12%. Cloud revenue surged by 20%, and backlog climbed to $97 billion, signaling strong multiyear demand. Sentiment has shifted from Oracle being viewed as a dying legacy player to a potentially relevant — but highly leveraged — cloud and AI contender.

While Oracle has shown growth, its growth has been debt-funded after over-investing in AI and with investors advised to be patient, all leading to some uncertainty. It is only reasonable to anticipate a continued uptick in Java licensing scrutiny.

Java: From Free Platform to Monetizing Monster

Since 2019, Oracle has repeatedly revised its Java licensing model. With each change, it has increased in complexity and added risks and costs that had previously been unimaginable. What was once thought to be safe, free, or low risk is now anything but that. One thing is certain: Oracle’s Java strategy ensures that many organizations could or will be (unknowingly) non-compliant. Whether through employee-based metrics or unmanaged downloads, Java users need to be on top of their game.

While there is no substitute for tailored legal advice, every Java user should at least consider the following:

• Know which Java license governs which installation.
• Set realistic licensing goals and negotiate strategically.
• Do not ignore Oracle’s Java emails.
• Know when and how employees download Java.
• Have a plan to discontinue Java — if that is the goal.
• Make no assumptions about audit immunity.
• Know that pride goeth before a fall.

What Now?

As we approach the three-year mark since Oracle’s last major overhaul of its Java licensing policy, we share our insights into how these changes continue to impact organizations. With that, several realities bear repeating:

• Oracle is not slowing down its Java enforcement efforts. If anything, activity is increasing.
• Contractual audits may be down, but soft audits are up. These informal inquiries have become Oracle’s preferred tool for enforcement.
• Every Java inquiry must be taken seriously. Initial contact from an Oracle Java representative should be treated as the beginning of an audit.
• Creative licensing solutions are harder to find. Alternatives to employee-based metrics exist, but they are complex.
• Counsel should be involved early – before disclosures are made or agreements signed.

Final Thought

Oracle audits — Java or otherwise — can be managed and controlled. There is no one-size-fits-all solution, but preparation makes all the difference.

In the current environment where Oracle is under pressure to perform, the smartest move a Java user can make is simple: assume scrutiny is coming — and be ready before it arrives. We are here to help!

Published on February 6, 2026