Oracle Reports Q1 GAAP EPS of 22 Cents Up 8%, Non-GAAP EPS of 30 Cents Up 3%
Operating Margins Up Over 500 Basis Points
- Press Release
- Source: Oracle Corporation
- On 4:00 pm EDT, Wednesday September 16, 2009
REDWOOD SHORES, CA--(Marketwire - 09/16/09) - Oracle Corporation (NASDAQ:ORCL - News) today announced fiscal 2010 Q1 GAAP earnings per share were $0.22 up 8% compared to last year. First quarter GAAP total revenues were down 5% to $5.1 billion, while quarterly GAAP net income was up 4% to $1.1 billion. GAAP new software license revenues were down 17% to $1.0 billion. GAAP software license updates and product support revenues were up 6% to $3.1 billion. GAAP operating income was up 14% to $1.7 billion and GAAP operating margin was up 590 basis points to 34%. GAAP operating cash flow on a trailing twelve-month basis was $8.8 billion, up 10%.
First quarter non-GAAP earnings per share were up 3% to $0.30. Non-GAAP total revenues were down 7% to $5.1 billion, while non-GAAP net income was flat at $1.5 billion, compared to the same quarter last year. Non-GAAP operating income was up 7% to $2.3 billion and non-GAAP operating margin was up 570 basis points to 46%.
Oracle's results were impacted by the reduced value of foreign currencies when compared to US dollars, reducing Q1 GAAP earnings by $0.02 per share. Without this impact, Oracle's Q1 GAAP and non-GAAP earnings per share would have been $0.24 and $0.32, respectively. GAAP and non-GAAP new software license revenues would have been down 14%, and our software license updates and product support revenues would have been up 11% on a GAAP basis and up 8% on a non-GAAP basis. GAAP and non-GAAP operating income would have been up 21% and 11%, respectively.
In addition, Oracle's Board of Directors declared a cash dividend of $0.05 per share of outstanding common stock to be paid to stockholders of record as of the close of business on October 14, 2009, with a payment date of November 4, 2009. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to the final determination of Oracle's Board of Directors.
"Yesterday, Sun and Oracle announced Exadata Version 2, which is twice as fast as Exadata Version 1 for data warehousing, and the first and only database machine that runs online transaction processing -- OLTP -- applications," said Oracle CEO Larry Ellison. "This new combination of Sun hardware and Oracle software is now the world's fastest computer system for both OLTP and data warehousing."
"By substantially improving operating margins we were able to increase Q1 earnings per share even though revenues decreased slightly," said Safra Catz, Oracle's President. "We grew non-GAAP operating margins by 570 basis points to 46 percent in our seasonally smallest quarter. Our operating model continues to drive earnings for our stockholders."
"Software license updates and product support revenues grew 11%, to $3.1 billion, for the quarter when adjusted for the change in the US dollar since last year," said Oracle Executive Vice President and CFO, Jeff Epstein. "This growth, coupled with our disciplined expense management, was key to our ability to generate a record $8.5 billion in free cash flow over the last twelve months."
"We grew faster than SAP in every region around the world, including Europe, where our applications business grew 3 percent in constant currency versus negative 39 percent for SAP's most recent quarter," said Oracle President Charles Phillips. "Our applications team also executed especially well in North America, where our applications business grew 8 percent in constant currency versus negative 50 percent for SAP."
Q1 Earnings Conference Call and Webcast
Oracle will hold a conference call and web broadcast today to discuss these results at 2:00 p.m. (PDT) / 5:00 p.m. (EDT). You may listen to the call by dialing (866) 423-8620 or (719) 387-4093, Passcode: 745867. To access the live web broadcast of this event, please visit the Oracle Investor Relations website at http://www.oracle.com/investor.
About Oracle
Oracle is the world's largest enterprise software company. For more information about Oracle, please visit our web site at oracle.com or call Investor Relations at (650) 506-4073.
Trademarks
Oracle is a registered trademark of Oracle Corporation and/or its affiliates. Other names may be trademarks of their respective owners.
"Safe Harbor" Statement: Statements in this press release relating to Oracle's or its Board of Directors' future plans, intentions and prospects are "forward-looking statements" and are subject to material risks and uncertainties. Many factors could affect our current expectations and our actual results, and could cause actual results to differ materially. We presently consider the following to be among the important factors that could cause actual results to differ materially from expectations: (1) Economic, political and market conditions, including the recent global economic and financial crisis, could adversely affect our business, operating results or financial condition, including our revenue growth and profitability, through reductions in customer IT budgets and expenditures and through the general tightening of access to credit. (2) We may fail to achieve our financial forecasts due to such factors as delays or size reductions in transactions, fewer large transactions in a particular quarter, unanticipated fluctuations in currency exchange rates, delays in delivery of new products or releases or a decline in our renewal rates for software license updates and product support. (3) We cannot assure market acceptance of new products or services or new versions of existing or acquired products or services. (4) We have an active acquisition program and our acquisitions may not be successful, may involve unanticipated costs or other integration issues or may disrupt our existing operations. (5) Our international sales and operations subject us to additional risks that can adversely affect our operating results, including risks relating to foreign currency gains and losses and risks relating to compliance with international and U.S. laws that apply to our international operations. (6) Intense competitive forces demand rapid technological advances and frequent new product introductions and could require us to reduce prices or cause us to lose customers. A detailed discussion of these factors and other risks that affect our business is contained in our SEC filings, including our most recent reports on Form 10-K and Form 10-Q, particularly under the heading "Risk Factors." Copies of these filings are available online from the SEC or by contacting Oracle Corporation's Investor Relations Department at (650) 506-4073 or by clicking on SEC Filings on Oracle's Investor Relations website at http://www.oracle.com/investor. All information set forth in this release is current as of September 16, 2009. Oracle undertakes no duty to update any statement in light of new information or future events.
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ORACLE CORPORATION
Q1 FISCAL 2010 FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ in millions, except per share data)
%
Increase
(Decrease)
Three Months Ended August 31, % in
-------------------------------------- Increase Constant
% of % of (Decrease) Currency
2009 Revenues 2008 Revenues in US $ (1)
-------- -------- -------- -------- -------- --------
REVENUES
New software
licenses $ 1,028 20% $ 1,237 23% (17%) (14%)
Software
license
updates and
product
support 3,117 62% 2,935 55% 6% 11%
-------- -------- -------- --------
Software
Revenues 4,145 82% 4,172 78% (1%) 4%
-------- -------- -------- --------
Services 909 18% 1,159 22% (22%) (18%)
-------- -------- -------- --------
Total
Revenues 5,054 100% 5,331 100% (5%) (1%)
-------- -------- -------- --------
OPERATING
EXPENSES
Sales and
marketing 960 19% 1,112 21% (14%) (10%)
Software
license
updates and
product
support 226 4% 282 5% (20%) (16%)
Cost of
services 782 16% 1,026 19% (24%) (19%)
Research and
development 660 13% 708 13% (7%) (5%)
General and
administ-
rative 201 4% 206 4% (3%) 1%
Amortization
of
intangible
assets 431 9% 413 8% 4% 4%
Acquisition
related and
other 6 0% 49 1% (88%) (87%)
Restructuring 48 1% 14 0% 255% 284%
-------- -------- -------- --------
Total
Operating
Expenses 3,314 66% 3,810 71% (13%) (9%)
-------- -------- -------- --------
OPERATING
INCOME 1,740 34% 1,521 29% 14% 21%
Interest
expense (179) (3%) (159) (3%) 12% 12%
Non-operating
income, net 1 0% 82 1% (98%) (99%)
-------- -------- -------- --------
INCOME BEFORE
PROVISION FOR
INCOME TAXES 1,562 31% 1,444 27% 8% 15%
-------- -------- -------- --------
Provision
for income
taxes 438 9% 367 7% 19% 27%
-------- -------- -------- --------
NET INCOME $ 1,124 22% $ 1,077 20% 4% 11%
======== ======== ======== ========
EARNINGS PER
SHARE:
Basic $ 0.22 $ 0.21
Diluted $ 0.22 $ 0.21
WEIGHTED
AVERAGE
COMMON SHARES
OUTSTANDING:
Basic 5,009 5,152
Diluted 5,063 5,235
(1) We compare the percent change in the results from one period to another
period using constant currency disclosure. We present constant currency
information to provide a framework for assessing how our underlying
businesses performed excluding the effect of foreign currency rate
fluctuations. To present this information, current and comparative
prior period results for entities reporting in currencies other than
United States dollars are converted into United States dollars at the
exchange rate in effect on May 31, 2009, which was the last day of our
prior fiscal year, rather than the actual exchange rates in effect
during the respective periods. The United States dollar strengthened
relative to most major international currencies in the three months
ended August 31, 2009 compared with the corresponding prior year
period, reducing revenues by 4 percentage points, operating expenses by
4 percentage points and operating income by 7 percentage points.
ORACLE CORPORATION
Q1 FISCAL 2010 FINANCIAL RESULTS
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)
($ in millions, except per share data)
Three Months Ended August 31,
----------------------------------------------------------
2009 2009 2008 2008
GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP
-------- -------- -------- -------- -------- --------
TOTAL REVENUES
(3) $ 5,054 $ 9 $ 5,063 $ 5,331 $ 91 $ 5,422
TOTAL SOFTWARE
REVENUES (3) $ 4,145 $ 9 $ 4,154 $ 4,172 $ 91 $ 4,263
New software
licenses 1,028 - 1,028 1,237 - 1,237
Software
license
updates and
product
support (3) 3,117 9 3,126 2,935 91 3,026
TOTAL
OPERATING
EXPENSES $ 3,314 $ (569) $ 2,745 $ 3,810 $ (562) $ 3,248
Stock-based
compensation
(4) 84 (84) - 86 (86) -
Amortization
of intangible
assets (5) 431 (431) - 413 (413) -
Acquisition
related and
other 6 (6) - 49 (49) -
Restructuring 48 (48) - 14 (14) -
OPERATING
INCOME $ 1,740 $ 578 $ 2,318 $ 1,521 $ 653 $ 2,174
OPERATING
MARGIN % 34% 46% 29% 40%
INCOME TAX
EFFECTS (6) $ 438 $ 162 $ 600 $ 367 $ 186 $ 553
NET INCOME $ 1,124 $ 416 $ 1,540 $ 1,077 $ 467 $ 1,544
DILUTED
EARNINGS
PER SHARE $ 0.22 $ 0.30 $ 0.21 $ 0.29
DILUTED
WEIGHTED
AVERAGE
COMMON
SHARES
OUTSTANDING 5,063 - 5,063 5,235 - 5,235
% Increase
% Increase (Decrease) in
(Decrease) in US $ Constant Currency (2)
--------------------- ---------------------
GAAP Non-GAAP GAAP Non-GAAP
-------- -------- -------- --------
TOTAL REVENUES
(3) (5%) (7%) (1%) (2%)
TOTAL SOFTWARE
REVENUES (3) (1%) (3%) 4% 2%
New software
licenses (17%) (17%) (14%) (14%)
Software
license
updates and
product
support (3) 6% 3% 11% 8%
TOTAL
OPERATING
EXPENSES (13%) (15%) (9%) (12%)
Stock-based
compensation
(4) (3%) * (3%) *
Amortization
of intangible
assets (5) 4% * 4% *
Acquisition
related and
other (88%) * (87%) *
Restructuring 255% * 284% *
OPERATING
INCOME 14% 7% 21% 11%
OPERATING
MARGIN % 590 bp 568 bp 623 bp 558 bp
INCOME TAX
EFFECTS (6) 19% 8% 27% 13%
NET INCOME 4% 0% 11% 4%
DILUTED
EARNINGS
PER SHARE 8% 3% 15% 8%
DILUTED
WEIGHTED
AVERAGE
COMMON
SHARES
OUTSTANDING (3%) (3%) (3%) (3%)
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are
not meant to be considered in isolation or as a substitute for
comparable GAAP measures, and should be read only in conjunction with
our consolidated financial statements prepared in accordance with GAAP.
For a detailed explanation of the adjustments made to comparable GAAP
measures, the reasons why management uses these measures, the
usefulness of these measures and the material limitations on the
usefulness of these measures, please see Appendix A.
(2) We compare the percent change in the results from one period to another
period using constant currency disclosure. We present constant currency
information to provide a framework for assessing how our underlying
businesses performed excluding the effect of foreign currency rate
fluctuations. To present this information, current and comparative
prior period results for entities reporting in currencies other than
United States dollars are converted into United States dollars at the
exchange rate in effect on May 31, 2009, which was the last day of our
prior fiscal year, rather than the actual exchange rates in effect
during the respective periods.
(3) As of August 31, 2009, approximately $15 million in estimated revenues
related to assumed support contracts will not be recognized for fiscal
2010 due to business combination accounting rules.
(4) Stock-based compensation is included in the following GAAP operating
expense categories:
Three Months Ended Three Months Ended
August 31, 2009 August 31, 2008
---------------------------- ----------------------------
GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP
-------- -------- -------- -------- -------- --------
Sales and
marketing $ 16 $ (16) $ - $ 19 $ (19) $ -
Software
license
updates
and
product
support 4 (4) - 3 (3) -
Cost of
services 3 (3) - 3 (3) -
Research
and
development 32 (32) - 37 (37) -
General
and
administ-
rative 29 (29) - 24 (24) -
-------- -------- -------- -------- -------- --------
Subtotal 84 (84) - 86 (86) -
-------- -------- -------- -------- -------- --------
Acquisition
related
and other - - - 5 (5) -
-------- -------- -------- -------- -------- --------
Total
stock-
based
compen-
sation $ 84 $ (84) $ - $ 91 $ (91) $ -
======== ======== ======== ======== ======== ========
(5) Estimated future annual amortization expense related to intangible
assets as of August 31, 2009 is as follows:
Remainder of Fiscal 2010 $ 1,204
Fiscal 2011 1,388
Fiscal 2012 1,239
Fiscal 2013 1,090
Fiscal 2014 890
Fiscal 2015 703
Thereafter 372
-----------
Total $ 6,886
===========
(6) Income tax effects were calculated reflecting an effective GAAP tax
rate of 28.0% and 25.4% in the first quarter of fiscal 2010 and 2009,
respectively, and an effective non-GAAP tax rate of 28.0% and 26.4% in
the first quarter of fiscal 2010 and 2009, respectively. Our non-GAAP
tax rate in the first quarter of fiscal 2009 excludes the effect of an
adjustment to our non-current deferred tax liability associated with
acquired intangible assets.
* Not meaningful
ORACLE CORPORATION
Q1 FISCAL 2010 FINANCIAL RESULTS
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in millions)
August 31, May 31,
2009 2009
---------- ----------
ASSETS
Current Assets:
Cash and cash equivalents $ 16,098 $ 8,995
Marketable securities 4,467 3,629
Trade receivables, net 2,584 4,430
Deferred tax assets 710 661
Prepaid expenses and other current assets 586 866
---------- ----------
Total Current Assets 24,445 18,581
Non-Current Assets:
Property, net 1,924 1,922
Intangible assets, net 6,886 7,269
Goodwill 18,867 18,842
Other assets 876 802
---------- ----------
Total Non-Current Assets 28,553 28,835
---------- ----------
TOTAL ASSETS $ 52,998 $ 47,416
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable, current and other current
borrowings $ 1,001 $ 1,001
Accounts payable 260 271
Accrued compensation and related benefits 1,033 1,409
Deferred revenues 5,283 4,592
Other current liabilities 1,583 1,876
---------- ----------
Total Current Liabilities 9,160 9,149
Non-Current Liabilities:
Notes payable and other non-current borrowings 13,723 9,237
Income taxes payable 2,485 2,423
Deferred tax liabilities 465 480
Other non-current liabilities 678 682
---------- ----------
Total Non-Current Liabilities 17,351 12,822
Stockholders' Equity 26,487 25,445
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 52,998 $ 47,416
========== ==========
ORACLE CORPORATION
Q1 FISCAL 2010 FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in millions)
Three Months Ended
August 31,
----------------------
2009 2008
---------- ----------
Cash Flows From Operating Activities:
Net income $ 1,124 $ 1,077
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 61 64
Amortization of intangible assets 431 413
Deferred income taxes (75) (53)
Stock-based compensation 84 91
Tax benefits on the exercise of stock options 51 101
Excess tax benefits on the exercise of stock
options (30) (65)
Other, net 40 19
Changes in operating assets and liabilities,
net of effects from acquisitions:
Decrease in trade receivables, net 1,870 1,812
Decrease in prepaid expenses and other
assets 251 397
Decrease in accounts payable and other
liabilities (642) (906)
Decrease in income taxes payable (9) (361)
Increase in deferred revenues 582 651
---------- ----------
Net cash provided by operating activities 3,738 3,240
---------- ----------
Cash Flows From Investing Activities:
Purchases of marketable securities and other
investments (2,760) (3,188)
Proceeds from maturities and sales of
marketable securities and other investments 1,947 1,420
Acquisitions, net of cash acquired (79) (395)
Capital expenditures (55) (323)
---------- ----------
Net cash used for investing activities (947) (2,486)
---------- ----------
Cash Flows From Financing Activities:
Payments for repurchases of common stock (244) (500)
Proceeds from issuances of common stock 247 280
Payment of dividends to stockholders (251) -
Proceeds from borrowings, net of issuance costs 4,461 -
Repayments of borrowings - (4)
Excess tax benefits on the exercise of stock
options 30 65
Distributions to noncontrolling interests (34) (30)
---------- ----------
Net cash provided by (used for)
financing activities 4,209 (189)
---------- ----------
Effect of exchange rate changes on cash
and cash equivalents 103 (274)
---------- ----------
Net increase in cash and cash equivalents 7,103 291
---------- ----------
Cash and cash equivalents at beginning of period 8,995 8,262
---------- ----------
Cash and cash equivalents at end of period $ 16,098 $ 8,553
========== ==========
ORACLE CORPORATION
Q1 FISCAL 2010 FINANCIAL RESULTS
FREE CASH FLOW - TRAILING 4-QUARTERS (1)
($ in millions)
Fiscal 2009 Fiscal 2010
------------------------------ ------------------------------
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
------ ------ ------ ------ ------ ------ ------ ------
GAAP
Operating
Cash Flow $7,941 $8,089 $8,542 $8,255 $8,753
Capital
Expenditures
(2) (479) (486) (539) (529) (261)
------ ------ ------ ------ ------ ------ ------ ------
Free Cash
Flow $7,462 $7,603 $8,003 $7,726 $8,492
====== ====== ====== ====== ====== ====== ====== ======
% Growth
over prior
year 20% 15% 14% 8% 14%
------ ------ ------ ------ ------ ------ ------ ------
GAAP Net
Income $5,758 $5,750 $5,739 $5,593 $5,640
Free Cash
Flow as
a % of
Net Income 130% 132% 139% 138% 151%
(1) To supplement our statements of cash flows presented on a GAAP basis,
we use non-GAAP measures of cash flows on a trailing 4-quarter basis to
analyze cash flow generated from operations. We believe free cash flow
is also useful as one of the bases for comparing our performance with
our competitors. The presentation of non-GAAP free cash flow is not
meant to be considered in isolation or as an alternative to net income
as an indicator of our performance, or as an alternative to cash flows
from operating activities as a measure of liquidity.
(2) Represents capital expenditures as reported in cash flows from
investing activities on our cash flow statements presented in
accordance with GAAP.
ORACLE CORPORATION
Q1 FISCAL 2010 FINANCIAL RESULTS
SUPPLEMENTAL ANALYSIS OF GAAP REVENUES AND HEADCOUNT (1)
($ in millions)
Fiscal 2009
-------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
------- ------- ------- ------- -------
REVENUES
New software licenses $ 1,237 $ 1,626 $ 1,516 $ 2,744 $ 7,123
Software license updates
and product support 2,935 2,850 2,917 3,052 11,754
------- ------- ------- ------- -------
Software Revenues 4,172 4,476 4,433 5,796 18,877
Consulting 865 842 758 782 3,247
On Demand 195 189 191 204 779
Education 99 100 71 79 349
------- ------- ------- ------- -------
Services Revenues 1,159 1,131 1,020 1,065 4,375
------- ------- ------- ------- -------
Total Revenues $ 5,331 $ 5,607 $ 5,453 $ 6,861 $23,252
======= ======= ======= ======= =======
AS REPORTED REVENUE GROWTH
RATES
New software licenses 14% (3%) (6%) (13%) (5%)
Software license updates
and product support 23% 14% 11% 8% 14%
Software Revenues 20% 8% 5% (3%) 6%
Consulting 8% (4%) (10%) (18%) (7%)
On Demand 23% 13% 10% 5% 12%
Education (2%) (9%) (23%) (30%) (16%)
Services Revenues 9% (2%) (8%) (16%) (5%)
Total Revenues 18% 6% 2% (5%) 4%
CONSTANT CURRENCY GROWTH
RATES (2)
New software licenses 10% 5% 3% (4%) 1%
Software license updates
and product support 18% 20% 20% 18% 19%
Software Revenues 16% 14% 14% 6% 12%
Consulting 5% 4% 0% (10%) (1%)
On Demand 19% 19% 19% 15% 18%
Education (6%) (3%) (16%) (23%) (12%)
Services Revenues 6% 5% 2% (7%) 1%
Total Revenues 14% 12% 11% 4% 10%
GEOGRAPHIC REVENUES
REVENUES
Americas $ 2,687 $ 2,904 $ 2,846 $ 3,463 $11,900
Europe, Middle East
& Africa 1,830 1,881 1,824 2,413 7,948
Asia Pacific 814 822 783 985 3,404
------- ------- ------- ------- -------
Total Revenues $ 5,331 $ 5,607 $ 5,453 $ 6,861 $23,252
======= ======= ======= ======= =======
HEADCOUNT
GEOGRAPHIC AREA
Americas 32,993 33,526 32,919 32,347
Europe, Middle East
& Africa 17,096 17,184 17,348 17,129
Asia Pacific 35,099 35,947 36,321 36,086
------- ------- ------- ------- -------
Total Company 85,188 86,657 86,588 85,562
======= ======= ======= ======= =======
Fiscal 2010
-------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
------- ------- ------- ------- -------
REVENUES
New software licenses $ 1,028 $ 1,028
Software license updates
and product support 3,117 3,117
------- ------- ------- ------- -------
Software Revenues 4,145 4,145
Consulting 663 663
On Demand 180 180
Education 66 66
------- ------- ------- ------- -------
Services Revenues 909 909
------- ------- ------- ------- -------
Total Revenues $ 5,054 $ 5,054
======= ======= ======= ======= =======
AS REPORTED REVENUE GROWTH
RATES
New software licenses (17%) (17%)
Software license updates
and product support 6% 6%
Software Revenues (1%) (1%)
Consulting (23%) (23%)
On Demand (8%) (8%)
Education (34%) (34%)
Services Revenues (22%) (22%)
Total Revenues (5%) (5%)
CONSTANT CURRENCY GROWTH
RATES (2)
New software licenses (14%) (14%)
Software license updates
and product support 11% 11%
Software Revenues 4% 4%
Consulting (19%) (19%)
On Demand (3%) (3%)
Education (30%) (30%)
Services Revenues (18%) (18%)
Total Revenues (1%) (1%)
GEOGRAPHIC REVENUES
REVENUES
Americas $ 2,671 $ 2,671
Europe, Middle East
& Africa 1,642 1,642
Asia Pacific 741 741
------- ------- ------- ------- -------
Total Revenues $ 5,054 $ 5,054
======= ======= ======= ======= =======
HEADCOUNT
GEOGRAPHIC AREA
Americas 32,034 32,034
Europe, Middle East
& Africa 16,839 16,839
Asia Pacific 35,766 35,766
------- ------- ------- ------- -------
Total Company 84,639 84,639
======= ======= ======= ======= =======
(1) The sum of the quarterly financial information may vary from
year-to-date financial information due to rounding.
(2) We compare the percent change in the results from one period to another
period using constant currency disclosure. We present constant currency
information to provide a framework for assessing how our underlying
businesses performed excluding the effect of foreign currency rate
fluctuations. To present this information, current and comparative
prior period results for entities reporting in currencies other than
United States dollars are converted into United States dollars at the
exchange rates in effect on May 31, 2009 and 2008 for the fiscal 2010
and fiscal 2009 constant currency growth rate calculations presented,
respectively, rather than the actual exchange rates in effect during
the respective periods.
ORACLE CORPORATION
Q1 FISCAL 2010 FINANCIAL RESULTS
SUPPLEMENTAL TOTAL SOFTWARE PRODUCT REVENUE ANALYSIS (1)
($ in millions)
Fiscal 2009
-------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
------- ------- ------- ------- -------
APPLICATIONS REVENUES
New software licenses $ 331 $ 469 $ 396 $ 805 $ 2,000
Software license updates
and product support 1,043 1,015 1,003 1,044 4,105
------- ------- ------- ------- -------
Software Revenues $ 1,374 $ 1,484 $ 1,399 $ 1,849 $ 6,105
======= ======= ======= ======= =======
AS REPORTED GROWTH RATES
New software licenses (12%) (15%) (12%) (19%) (16%)
Software license updates
and product support 18% 9% 3% 0% 7%
Software Revenues 9% 0% (2%) (9%) (2%)
CONSTANT CURRENCY GROWTH
RATES (2)
New software licenses (14%) (9%) (4%) (11%) (10%)
Software license updates
and product support 13% 15% 11% 9% 12%
Software Revenues 5% 6% 7% (1%) 4%
DATABASE & MIDDLEWARE
REVENUES
New software licenses $ 906 $ 1,157 $ 1,120 $ 1,939 $ 5,123
Software license updates
and product support 1,892 1,835 1,914 2,008 7,649
------- ------- ------- ------- -------
Software Revenues $ 2,798 $ 2,992 $ 3,034 $ 3,947 $12,772
======= ======= ======= ======= =======
AS REPORTED GROWTH RATES
New software licenses 27% 4% (4%) (10%) 0%
Software license updates
and product support 26% 17% 16% 12% 18%
Software Revenues 27% 12% 8% 0% 10%
CONSTANT CURRENCY GROWTH
RATES (2)
New software licenses 23% 12% 6% (1%) 7%
Software license updates
and product support 22% 24% 25% 23% 23%
Software Revenues 22% 19% 17% 10% 16%
Fiscal 2010
-------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
------- ------- ------- ------- -------
APPLICATIONS REVENUES
New software licenses $ 317 $ 317
Software license updates
and product support 1,052 1,052
------- ------- ------- ------- -------
Software Revenues $ 1,369 $ 1,369
======= ======= ======= ======= =======
AS REPORTED GROWTH RATES
New software licenses (4%) (4%)
Software license updates
and product support 1% 1%
Software Revenues 0% 0%
CONSTANT CURRENCY GROWTH
RATES (2)
New software licenses 0% 0%
Software license updates
and product support 6% 6%
Software Revenues 4% 4%
DATABASE & MIDDLEWARE
REVENUES
New software licenses $ 711 $ 711
Software license updates
and product support 2,065 2,065
------- ------- ------- ------- -------
Software Revenues $ 2,776 $ 2,776
======= ======= ======= ======= =======
AS REPORTED GROWTH RATES
New software licenses (22%) (22%)
Software license updates
and product support 9% 9%
Software Revenues (1%) (1%)
CONSTANT CURRENCY GROWTH
RATES (2)
New software licenses (19%) (19%)
Software license updates
and product support 14% 14%
Software Revenues 4% 4%
(1) The sum of the quarterly financial information may vary from
year-to-date financial information due to rounding.
(2) We compare the percent change in the results from one period to another
period using constant currency disclosure. We present constant currency
information to provide a framework for assessing how our underlying
businesses performed excluding the effect of foreign currency rate
fluctuations. To present this information, current and comparative
prior period results for entities reporting in currencies other than
United States dollars are converted into United States dollars at the
exchange rates in effect on May 31, 2009 and 2008 for the fiscal 2010
and fiscal 2009 constant currency growth rate calculations presented,
respectively, rather than the actual exchange rates in effect during
the respective periods.
ORACLE CORPORATION
Q1 FISCAL 2010 FINANCIAL RESULTS
SUPPLEMENTAL GEOGRAPHIC NEW SOFTWARE LICENSE REVENUE ANALYSIS (1)
($ in millions)
Fiscal 2009
-------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
------- ------- ------- ------- -------
AMERICAS
Database & Middleware $ 354 $ 471 $ 449 $ 840 $ 2,114
Applications 182 280 224 416 1,102
------- ------- ------- ------- -------
New Software License
Revenues $ 536 $ 751 $ 673 $ 1,256 $ 3,216
======= ======= ======= ======= =======
AS REPORTED GROWTH RATES
Database & Middleware 18% 5% (7%) (9%) (2%)
Applications (9%) (9%) (11%) (25%) (16%)
New Software License
Revenues 7% 0% (9%) (15%) (7%)
CONSTANT CURRENCY GROWTH
RATES (2)
Database & Middleware 17% 10% (1%) (6%) 2%
Applications (10%) (6%) (8%) (22%) (14%)
New Software License
Revenues 6% 3% (4%) (12%) (4%)
EUROPE / MIDDLE EAST / AFRICA
Database & Middleware $ 326 $ 431 $ 446 $ 759 $ 1,962
Applications 94 126 125 282 627
------- ------- ------- ------- -------
New Software License
Revenues $ 420 $ 557 $ 571 $ 1,041 $ 2,589
======= ======= ======= ======= =======
AS REPORTED GROWTH RATES
Database & Middleware 28% 2% 0% (14%) (2%)
Applications (23%) (28%) (12%) (11%) (17%)
New Software License
Revenues 11% (7%) (3%) (13%) (6%)
CONSTANT CURRENCY GROWTH
RATES (2)
Database & Middleware 20% 16% 15% 1% 10%
Applications (26%) (16%) 2% 5% (6%)
New Software License
Revenues 5% 7% 12% 2% 6%
ASIA PACIFIC
Database & Middleware $ 226 $ 255 $ 225 $ 340 $ 1,047
Applications 55 63 47 107 271
------- ------- ------- ------- -------
New Software License
Revenues $ 281 $ 318 $ 272 $ 447 $ 1,318
======= ======= ======= ======= =======
AS REPORTED GROWTH RATES
Database & Middleware 45% 4% (3%) (1%) 7%
Applications 1% (13%) (18%) (11%) (11%)
New Software License
Revenues 34% 0% (6%) (3%) 3%
CONSTANT CURRENCY GROWTH
RATES (2)
Database & Middleware 38% 8% 1% 5% 11%
Applications (1%) (2%) (2%) (4%) (3%)
New Software License
Revenues 28% 5% 1% 3% 7%
TOTAL COMPANY
Database & Middleware $ 906 $ 1,157 $ 1,120 $ 1,939 $ 5,123
Applications 331 469 396 805 2,000
------- ------- ------- ------- -------
New Software License
Revenues $ 1,237 $ 1,626 $ 1,516 $ 2,744 $ 7,123
======= ======= ======= ======= =======
AS REPORTED GROWTH RATES
Database & Middleware 27% 4% (4%) (10%) 0%
Applications (12%) (15%) (12%) (19%) (16%)
New Software License
Revenues 14% (3%) (6%) (13%) (5%)
CONSTANT CURRENCY GROWTH
RATES (2)
Database & Middleware 23% 12% 6% (1%) 7%
Applications (14%) (9%) (4%) (11%) (10%)
New Software License
Revenues 10% 5% 3% (4%) 1%
Fiscal 2010
-------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
------- ------- ------- ------- -------
AMERICAS
Database & Middleware $ 310 $ 310
Applications 185 185
------- ------- ------- ------- -------
New Software License
Revenues $ 495 $ 495
======= ======= ======= ======= =======
AS REPORTED GROWTH RATES
Database & Middleware (12%) (12%)
Applications 2% 2%
New Software License
Revenues (7%) (7%)
CONSTANT CURRENCY GROWTH
RATES (2)
Database & Middleware (11%) (11%)
Applications 6% 6%
New Software License
Revenues (5%) (5%)
EUROPE / MIDDLE EAST / AFRICA
Database & Middleware $ 224 $ 224
Applications 90 90
------- ------- ------- ------- -------
New Software License
Revenues $ 314 $ 314
======= ======= ======= ======= =======
AS REPORTED GROWTH RATES
Database & Middleware (31%) (31%)
Applications (5%) (5%)
New Software License
Revenues (25%) (25%)
CONSTANT CURRENCY GROWTH
RATES (2)
Database & Middleware (26%) (26%)
Applications 3% 3%
New Software License
Revenues (20%) (20%)
ASIA PACIFIC
Database & Middleware $ 177 $ 177
Applications 42 42
------- ------- ------- ------- -------
New Software License
Revenues $ 219 $ 219
======= ======= ======= ======= =======
AS REPORTED GROWTH RATES
Database & Middleware (22%) (22%)
Applications (24%) (24%)
New Software License
Revenues (22%) (22%)
CONSTANT CURRENCY GROWTH
RATES (2)
Database & Middleware (22%) (22%)
Applications (23%) (23%)
New Software License
Revenues (22%) (22%)
TOTAL COMPANY
Database & Middleware $ 711 $ 711
Applications 317 317
------- ------- ------- ------- -------
New Software License
Revenues $ 1,028 $ 1,028
======= ======= ======= ======= =======
AS REPORTED GROWTH RATES
Database & Middleware (22%) (22%)
Applications (4%) (4%)
New Software License
Revenues (17%) (17%)
CONSTANT CURRENCY GROWTH
RATES (2)
Database & Middleware (19%) (19%)
Applications 0% 0%
New Software License
Revenues (14%) (14%)
(1) The sum of the quarterly financial information may vary from
year-to-date financial information due to rounding.
(2) We compare the percent change in the results from one period to another
period using constant currency disclosure. We present constant currency
information to provide a framework for assessing how our underlying
businesses performed excluding the effect of foreign currency rate
fluctuations. To present this information, current and comparative
prior period results for entities reporting in currencies other than
United States dollars are converted into United States dollars at the
exchange rates in effect on May 31, 2009 and 2008 for the fiscal 2010
and fiscal 2009 constant currency growth rate calculations presented,
respectively, rather than the actual exchange rates in effect during
the respective periods.
APPENDIX A
ORACLE CORPORATION
Q1 FISCAL 2010 FINANCIAL RESULTS
EXPLANATION OF NON-GAAP MEASURES
To supplement our financial results presented on a GAAP basis, we use the
non-GAAP measures indicated in the tables, which exclude certain business
combination accounting entries and expenses related to acquisitions, as
well as other significant expenses including stock-based compensation, that
we believe are helpful in understanding our past financial performance and
our future results. Our non-GAAP financial measures are not meant to be
considered in isolation or as a substitute for comparable GAAP measures and
should be read only in conjunction with our consolidated financial
statements prepared in accordance with GAAP. Our management regularly uses
our supplemental non-GAAP financial measures internally to understand,
manage and evaluate our business and make operating decisions. These
non-GAAP measures are among the primary factors management uses in planning
for and forecasting future periods. Compensation of our executives is based
in part on the performance of our business based on these non-GAAP
measures. Our non-GAAP financial measures reflect adjustments based on the
following items, as well as the related income tax effects:
-- Support deferred revenue: Business combination accounting rules
require us to account for the fair value of support contracts assumed
in connection with our acquisitions. Because these are typically
one-year contracts, our GAAP revenues for the one year period
subsequent to our acquisition of a business do not reflect the full
amount of software license updates and product support revenues on
assumed support contracts that would have otherwise been recorded by
the acquired entity. The non-GAAP adjustment is intended to reflect the
full amount of such revenues. We believe this adjustment is useful to
investors as a measure of the ongoing performance of our business
because we have historically experienced high renewal rates on support
contracts, although we cannot be certain that customers will renew
these contracts.
-- Stock-based compensation expenses: We have excluded the effect
of stock-based compensation expenses from our non-GAAP operating
expenses and net income measures. Although stock-based compensation is
a key incentive offered to our employees, and we believe such
compensation contributed to the revenues earned during the periods
presented and also believe it will contribute to the generation of
future period revenues, we continue to evaluate our business
performance excluding stock-based compensation expenses. Stock-based
compensation expenses will recur in future periods.
-- Amortization of intangible assets: We have excluded the effect
of amortization of intangible assets from our non-GAAP operating
expenses and net income measures. Amortization of intangible assets is
inconsistent in amount and frequency and is significantly affected by
the timing and size of our acquisitions. Investors should note that the
use of intangible assets contributed to revenues earned during the
periods presented and will contribute to future period revenues as
well. Amortization of intangible assets will recur in future periods.
-- Acquisition related and other expenses, and restructuring
expenses: We incurred significant expenses in connection with
our acquisitions and also incurred certain other operating expenses or
income, which we generally would not have otherwise incurred in the
periods presented as a part of our continuing operations. Acquisition
related and other expenses consist of personnel related costs for
transitional employees, other acquired employee related costs,
stock-based compensation expenses (in addition to the stock-based
compensation expenses described above), integration related
professional services, certain business combination adjustments after
the measurement period or purchase price allocation period has ended
and certain other operating expenses, net. Substantially all of the
stock-based compensation expenses included in acquisition related and
other expenses resulted from unvested options assumed in acquisitions
whose vesting was fully accelerated upon termination of the employees
pursuant to the original terms of those options. Restructuring expenses
consist of employee severance and other exit costs. We believe it is
useful for investors to understand the effects of these items on our
total operating expenses. Although acquisition related expenses and
restructuring expenses are not recurring with respect to past
acquisitions, we generally will incur these expenses in connection
with any future acquisitions.
Contact:
Contact:
Ken Bond
Oracle Investor Relations
1.650.607.0349
Email Contact
Karen Tillman
Oracle Corporate Communications
1.650.607.0326
Email Contact
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