SOURCE: Oracle Corporation
September 16, 2010 16:00 ET
Oracle Reports Q1 GAAP EPS Up 20% to 27 Cents; Non-GAAP EPS Up 38% to 42 Cents
Software New License Sales Up 25%, Total GAAP Revenue Up 48%
REDWOOD SHORES, CA--(Marketwire - September 16, 2010) - Oracle Corporation (NASDAQ: ORCL) today
announced fiscal 2011 Q1 GAAP total revenues were up 48% to $7.5 billion,
while non-GAAP total revenues were up 50% to $7.6 billion. GAAP new
software license revenues were up 25% to $1.3 billion. Both the GAAP and
non-GAAP software license updates and product support revenues were up 11%
to $3.5 billion. GAAP operating income was up 10% to $1.9 billion, and GAAP
operating margin was 26%. Non-GAAP operating income was up 27% to $2.9
billion, and non-GAAP operating margin was 39%. GAAP net income was up 20%
to $1.4 billion, while non-GAAP net income was up 38% to $2.1 billion.
GAAP earnings per share were $0.27, up 20% compared to last year while
non-GAAP earnings per share were up 38% to $0.42. GAAP operating cash flow
on a trailing twelve-month basis was $8.8 billion.
"We executed better than expected on both the top and bottom line for the
quarter," said Oracle CFO, Jeff Epstein. "Strong revenue performance plus
disciplined business management enabled a 38% increase in non-GAAP earnings
per share to $0.42."
"Our software business grew strongly in all regions with new license sales
up 25%," said Oracle President, Safra Catz. "Our hardware business also
grew faster than we expected with Sun Solaris servers and Exadata leading
the way."
"Next week at Oracle OpenWorld we will announce two new high-end systems
that combine Sun hardware with Oracle software," said Oracle President,
Mark Hurd. "We will invest over $4 billion in research and development
this year, so our already robust product portfolio is only going to get
stronger."
"Our Exadata database machine continued to win new customers in Q1," said
Oracle CEO, Larry Ellison. "The worldwide Exadata pipeline now exceeds
$1.5 billion for the full fiscal year."
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 6, 2010, with a payment date of
November 3, 2010. 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.
Q1 Earnings Conference Call and Webcast
Oracle will hold a conference call and webcast today to discuss these
results at 2:00 p.m. Pacific. You may listen to the call by dialing (800)
214-0745 or (913) 643-0950, Passcode: 804992. To access the live webcast
of this event, please visit the Oracle Investor Relations website at
http://www.oracle.com/investor.
About Oracle
Oracle (NASDAQ: ORCL) is the world's most complete, open, and integrated
business software and hardware systems company. For more information about
Oracle, please visit our website at http://www.oracle.com or call Investor
Relations at (650) 506-4073.
Trademarks
Oracle and Java are registered trademarks of Oracle 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, expectations, beliefs,
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 recession and global economic crisis, can adversely affect our
business, results of operations and financial condition, including our
revenue growth and profitability, which in turn could adversely affect our
stock price. (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) Our entrance into the hardware systems business may not be
successful, and we may fail to achieve our financial forecasts with respect
to this new business. (4) We have an active acquisition program and our
acquisitions, including our acquisition of Sun Microsystems, 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. (7) If
we are unable to develop new or sufficiently differentiated products and
services, or to enhance and improve our products and support services in a
timely manner or to position and/or price our products and services to meet
market demand, customers may not buy new software licenses or hardware
systems products or purchase or renew support contracts. 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 press
release is current as of September 16, 2010. Oracle undertakes no duty to
update any statement in light of new information or future events.
ORACLE CORPORATION
Q1 FISCAL 2011 FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ in millions, except per share data)
%
Three Months Ended August 31, Increase
------------------------------------ % Constant
% of % of Increase Currency
2010 Revenues 2009 Revenues in US $ (1)
------- -------- ------- -------- ------- --------
REVENUES
New software
licenses $ 1,286 17% $ 1,028 20% 25% 25%
Software
license
updates and
product
support 3,450 46% 3,117 62% 11% 12%
------- -------- ------- --------
Software
Revenues 4,736 63% 4,145 82% 14% 15%
------- -------- ------- --------
Hardware
systems
products 1,079 15% - 0% * *
Hardware
systems
support 619 8% - 0% * *
------- -------- ------- --------
Hardware
Systems
Revenues 1,698 23% - 0% * *
------- -------- ------- --------
Services 1,068 14% 909 18% 18% 18%
------- -------- ------- --------
Total
Revenues 7,502 100% 5,054 100% 48% 49%
------- -------- ------- --------
OPERATING EXPENSES
Sales and
marketing 1,333 18% 960 19% 39% 40%
Software
license
updates and
product
support 308 4% 226 4% 36% 37%
Hardware
systems
products 557 7% - 0% * *
Hardware
systems
support 301 4% - 0% * *
Services 896 12% 782 16% 15% 16%
Research and
development 1,103 15% 660 13% 67% 67%
General and
administra-
tive 272 4% 201 4% 36% 36%
Amortization
of
intangible
assets 603 8% 431 9% 40% 40%
Acquisition
related and
other 83 1% 6 0% 1,356% 1,095%
Restructuring 129 1% 48 1% 168% 176%
------- -------- ------- --------
Total
Operating
Expenses 5,585 74% 3,314 66% 69% 69%
------- -------- ------- --------
OPERATING INCOME 1,917 26% 1,740 34% 10% 11%
Interest
expense (196) (3%) (179) (3%) 9% 9%
Non-operating
income, net 74 1% 1 0% * *
------- -------- ------- --------
INCOME BEFORE
PROVISION FOR
INCOME TAXES 1,795 24% 1,562 31% 15% 16%
------- -------- ------- --------
Provision
for income
taxes 443 6% 438 9% 1% 2%
------- -------- ------- --------
NET INCOME $ 1,352 18% $ 1,124 22% 20% 21%
======= ======== ======= ========
EARNINGS PER
SHARE:
Basic $ 0.27 $ 0.22
Diluted $ 0.27 $ 0.22
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING:
Basic 5,026 5,009
Diluted 5,083 5,063
(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 rates in effect on May 31, 2010, which was the last day of our
prior fiscal year, rather than the actual exchange rates in effect
during the respective periods. Movements in international currencies
relative to the United States dollar during the three months ended
August 31, 2010 compared with the corresponding prior year period
decreased our revenues and operating income, each by 1 percentage
point.
* Not meaningful
ORACLE CORPORATION
Q1 FISCAL 2011 FINANCIAL RESULTS
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)
($ in millions, except per share data)
Three Months Ended August 31,
------------------------------------------------------
2010 2010 2009 2009
GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP
------- ------- -------- ------- ------- --------
TOTAL REVENUES
(3) (4) $ 7,502 $ 86 $ 7,588 $ 5,054 $ 9 $ 5,063
TOTAL SOFTWARE
REVENUES (3) $ 4,736 $ 25 $ 4,761 $ 4,145 $ 9 $ 4,154
New software
licenses 1,286 - 1,286 1,028 - 1,028
Software license
updates and
product
support (3) 3,450 25 3,475 3,117 9 3,126
TOTAL HARDWARE
SYSTEMS REVENUES
(4) $ 1,698 $ 61 $ 1,759 $ - $ - $ -
Hardware
systems
products 1,079 - 1,079 - - -
Hardware
systems
support (4) 619 61 680 - - -
TOTAL OPERATING
EXPENSES $ 5,585 $ (944) $ 4,641 $ 3,314 $ (569) $ 2,745
Stock-based
compensation (5) 129 (129) - 84 (84) -
Amortization
of intangible
assets (6) 603 (603) - 431 (431) -
Acquisition
related and other 83 (83) - 6 (6) -
Restructuring 129 (129) - 48 (48) -
OPERATING INCOME $ 1,917 $ 1,030 $ 2,947 $ 1,740 $ 578 $ 2,318
OPERATING MARGIN % 26% 39% 34% 46%
INCOME TAX EFFECTS
(7) $ 443 $ 253 $ 696 $ 438 $ 162 $ 600
NET INCOME $ 1,352 $ 777 $ 2,129 $ 1,124 $ 416 $ 1,540
DILUTED EARNINGS
PER SHARE $ 0.27 $ 0.42 $ 0.22 $ 0.30
DILUTED WEIGHTED
AVERAGE COMMON
SHARES OUTSTANDING 5,083 - 5,083 5,063 - 5,063
% Increase
% Increase (Decrease)
(Decrease) in US in Constant
$ Currency (2)
---------------- ----------------
Non- Non-
GAAP GAAP GAAP GAAP
------- ------- ------- -------
TOTAL REVENUES
(3)(4) 48% 50% 49% 51%
TOTAL SOFTWARE
REVENUES (3) 14% 15% 15% 16%
New software
licenses 25% 25% 25% 25%
Software
license
updates and
product
support (3) 11% 11% 12% 12%
TOTAL HARDWARE
SYSTEMS REVENUES
(4) * * * *
Hardware
systems
products * * * *
Hardware
systems
support (4) * * * *
TOTAL OPERATING
EXPENSES 69% 69% 69% 70%
Stock-based
compensation (5) 54% * 54% *
Amortization
of intangible
assets (6) 40% * 40% *
Acquisition
related and
other 1,356% * 1,095% *
Restructuring 168% * 176% *
OPERATING INCOME 10% 27% 11% 28%
OPERATING MARGIN % (888) bp (694) bp (881) bp (693) bp
INCOME TAX EFFECTS
(7) 1% 16% 2% 17%
NET INCOME 20% 38% 21% 39%
DILUTED EARNINGS
PER SHARE 20% 38% 21% 39%
DILUTED WEIGHTED
AVERAGE COMMON
SHARES OUTSTANDING 0% 0% 0% 0%
(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 rates in effect on May 31, 2010, 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, 2010, approximately $46 million, $19 million and
$7 million in estimated revenues related to assumed software support
contracts will not be recognized for the remainder of fiscal 2011,
fiscal 2012 and fiscal 2013, respectively, due to business combination
accounting rules.
(4) As of August 31, 2010, approximately $87 million, $35 million and
$11 million in estimated revenues related to hardware systems support
contracts will not be recognized for the remainder of fiscal 2011,
fiscal 2012 and fiscal 2013, respectively, due to business combination
accounting rules.
(5) Stock-based compensation is included in the following GAAP operating
expense categories:
Three Months Ended Three Months Ended
August 31, 2010 August 31, 2009
-------------------------- --------------------------
GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP
-------- ------- -------- -------- ------- --------
Sales and
marketing $ 23 $ (23) $ - $ 16 $ (16) $ -
Software license
updates and
product support 5 (5) - 4 (4) -
Hardware systems
products 1 (1) - - - -
Hardware systems
support 1 (1) - - - -
Services 4 (4) - 3 (3) -
Research and
development 59 (59) - 32 (32) -
General and
administrative 36 (36) - 29 (29) -
-------- ------- -------- -------- ------- --------
Subtotal 129 (129) - 84 (84) -
-------- ------- -------- -------- ------- --------
Acquisition
related and
other 1 (1) - - - -
-------- ------- -------- -------- ------- --------
Total
stock-based
comp-
ensation $ 130 $ (130) $ - $ 84 $ (84) $ -
======== ======= ======== ======== ======= ========
(6) Estimated future annual amortization expense related to intangible
assets as of August 31, 2010 is as follows:
Remainder of
Fiscal 2011 $ 1,740
Fiscal 2012 2,074
Fiscal 2013 1,705
Fiscal 2014 1,408
Fiscal 2015 1,058
Fiscal 2016 575
Thereafter 190
--------
Total intangible
assets subject
to amortization 8,750
In-process
research and
development 374
--------
Total intangible
assets, net $ 9,124
========
(7) Income tax effects were calculated reflecting an effective GAAP and
non-GAAP tax rate of 24.7% and 28.0% in the first quarter of fiscal
2011 and 2010, respectively.
* Not meaningful
ORACLE CORPORATION
Q1 FISCAL 2011 FINANCIAL RESULTS
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in millions)
August 31, May 31,
2010 2010
---------- ----------
ASSETS
Current Assets:
Cash and cash equivalents $ 12,018 $ 9,914
Marketable securities 11,619 8,555
Trade receivables, net 3,721 5,585
Inventories 235 259
Deferred tax assets 1,142 1,159
Prepaid expenses and other current assets 1,529 1,532
---------- ----------
Total Current Assets 30,264 27,004
Non-Current Assets:
Property, plant and equipment, net 2,835 2,763
Intangible assets, net 9,124 9,321
Goodwill 20,901 20,425
Deferred tax assets 1,119 1,267
Other assets 1,012 798
---------- ----------
Total Non-Current Assets 34,991 34,574
---------- ----------
TOTAL ASSETS $ 65,255 $ 61,578
========== ==========
LIABILITIES AND EQUITY
Current Liabilities:
Notes payable, current and other current
borrowings $ 2,260 $ 3,145
Accounts payable 706 775
Accrued compensation and related benefits 1,438 1,895
Deferred revenues 6,903 5,900
Other current liabilities 2,493 2,976
---------- ----------
Total Current Liabilities 13,800 14,691
Non-Current Liabilities:
Notes payable and other non-current borrowings 14,778 11,510
Income taxes payable 2,679 2,695
Deferred tax liabilities 349 424
Other non-current liabilities 1,137 1,059
---------- ----------
Total Non-Current Liabilities 18,943 15,688
Equity 32,512 31,199
---------- ----------
TOTAL LIABILITIES AND EQUITY $ 65,255 $ 61,578
========== ==========
ORACLE CORPORATION
Q1 FISCAL 2011 FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in millions)
Three Months Ended August 31,
------------------------------
2010 2009
-------------- --------------
Cash Flows From Operating Activities:
Net income $ 1,352 $ 1,124
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation 99 61
Amortization of intangible assets 603 431
Deferred income taxes (15) (75)
Stock-based compensation 130 84
Tax benefits on the exercise of stock
options and vesting of restricted
stock-based awards 24 51
Excess tax benefits on the exercise
of stock options and vesting of
restricted stock-based awards (10) (30)
Other, net 26 40
Changes in operating assets and
liabilities, net of effects from
acquisitions:
Decrease in trade receivables, net 1,942 1,870
Decrease in inventories 11 -
Decrease in prepaid expenses and
other assets 348 251
Decrease in accounts payable and
other liabilities (898) (642)
Decrease in income taxes payable (529) (9)
Increase in deferred revenues 734 582
-------------- --------------
Net cash provided by
operating activities 3,817 3,738
-------------- --------------
Cash Flows From Investing Activities:
Purchases of marketable securities and
other investments (7,650) (2,760)
Proceeds from maturities and sales of
marketable securities and other
investments 4,684 1,947
Acquisitions, net of cash acquired (832) (79)
Capital expenditures (118) (55)
-------------- --------------
Net cash used for investing
activities (3,916) (947)
-------------- --------------
Cash Flows From Financing Activities:
Payments for repurchases of common stock (249) (244)
Proceeds from issuances of common stock 169 247
Payment of dividends to stockholders (251) (251)
Proceeds from borrowings, net of issuance
costs 3,204 4,461
Repayments of borrowings (885) -
Excess tax benefits on the exercise of
stock options and vesting of restricted
stock-based awards 10 30
Distributions to noncontrolling interests (38) (34)
-------------- --------------
Net cash provided by
financing activities 1,960 4,209
-------------- --------------
Effect of exchange rate changes on cash
and cash equivalents 243 103
-------------- --------------
Net increase in cash and cash equivalents 2,104 7,103
-------------- --------------
Cash and cash equivalents at beginning
of period 9,914 8,995
-------------- --------------
Cash and cash equivalents at end of period $ 12,018 $ 16,098
============== ==============
ORACLE CORPORATION
Q1 FISCAL 2011 FINANCIAL RESULTS
FREE CASH FLOW - TRAILING 4-QUARTERS (1)
($ in millions)
Fiscal 2010
----------------------------------
Q1 Q2 Q3 Q4
------- ------- ------- -------
GAAP Operating Cash Flow $ 8,753 $ 8,654 $ 8,178 $ 8,681
Capital Expenditures (2) (261) (230) (199) (230)
------- ------- ------- -------
Free Cash Flow $ 8,492 $ 8,424 $ 7,979 $ 8,451
======= ======= ======= =======
% Growth over prior year 14% 11% 0% 9%
------- ------- ------- -------
GAAP Net Income $ 5,640 $ 5,802 $ 5,663 $ 6,135
Free Cash Flow as a % of Net Income 151% 145% 141% 138%
------- ------- ------- -------
Fiscal 2011
----------------------------------
Q1 Q2 Q3 Q4
------- ------- ------- -------
GAAP Operating Cash Flow $ 8,760
Capital Expenditures (2) (293)
------- ------- ------- -------
Free Cash Flow $ 8,467
======= ======= ======= =======
% Growth over prior year 0%
------- ------- ------- -------
GAAP Net Income $ 6,363
Free Cash Flow as a % of Net Income 133%
------- ------- ------- -------
(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 2011 FINANCIAL RESULTS
SUPPLEMENTAL ANALYSIS OF GAAP REVENUES AND HEADCOUNT (1)
($ in millions)
Fiscal 2010
------------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
-------- -------- -------- -------- --------
REVENUES
New software licenses $ 1,028 $ 1,653 $ 1,718 $ 3,135 $ 7,533
Software license
updates and product
support 3,117 3,247 3,297 3,431 13,092
-------- -------- -------- -------- --------
Software Revenues 4,145 4,900 5,015 6,566 20,625
Hardware systems
products - - 273 1,233 1,506
Hardware systems
support - - 185 598 784
-------- -------- -------- -------- --------
Hardware Systems
Revenues - - 458 1,831 2,290
Consulting 663 692 651 713 2,720
On Demand 180 188 211 295 874
Education 66 78 69 100 311
-------- -------- -------- -------- --------
Services Revenues 909 958 931 1,108 3,905
-------- -------- -------- -------- --------
Total Revenues $ 5,054 $ 5,858 $ 6,404 $ 9,505 $ 26,820
======== ======== ======== ======== ========
AS REPORTED REVENUE
GROWTH RATES
New software licenses (17%) 2% 13% 14% 6%
Software license
updates and product
support 6% 14% 13% 12% 11%
Software Revenues (1%) 9% 13% 13% 9%
Hardware systems
products * * * * *
Hardware systems
support * * * * *
Hardware Systems
Revenues * * * * *
Consulting (23%) (18%) (14%) (9%) (16%)
On Demand (8%) (1%) 10% 45% 12%
Education (34%) (22%) (4%) 26% (11%)
Services Revenues (22%) (15%) (9%) 4% (11%)
Total Revenues (5%) 4% 17% 39% 15%
CONSTANT CURRENCY GROWTH
RATES (2)
New software licenses (14%) (5%) 8% 15% 4%
Software license
updates and product
support 11% 9% 8% 11% 10%
Software Revenues 4% 4% 8% 13% 8%
Hardware systems
products * * * * *
Hardware systems
support * * * * *
Hardware Systems
Revenues * * * * *
Consulting (19%) (22%) (18%) (10%) (17%)
On Demand (3%) (4%) 6% 44% 11%
Education (30%) (26%) (8%) 24% (12%)
Services Revenues (18%) (19%) (13%) 3% (12%)
Total Revenues (1%) 0% 12% 38% 14%
-------- -------- -------- -------- --------
GEOGRAPHIC REVENUES
REVENUES
Americas $ 2,671 $ 2,979 $ 3,284 $ 4,886 $ 13,819
Europe, Middle East &
Africa 1,642 1,976 2,167 3,153 8,938
Asia Pacific 741 903 953 1,466 4,063
-------- -------- -------- -------- --------
Total Revenues $ 5,054 $ 5,858 $ 6,404 $ 9,505 $ 26,820
======== ======== ======== ======== ========
HEADCOUNT
GEOGRAPHIC AREA
Americas 32,034 31,849 44,554 43,968
Europe, Middle East &
Africa 16,839 16,491 23,566 23,040
Asia Pacific 35,766 35,026 38,372 37,561
-------- -------- -------- -------- --------
Total Company 84,639 83,366 106,492 104,569
======== ======== ======== ======== ========
Fiscal 2011
------------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
-------- -------- -------- -------- --------
REVENUES
New software licenses $ 1,286 $ 1,286
Software license
updates and product
support 3,450 3,450
-------- -------- -------- -------- --------
Software Revenues 4,736 4,736
Hardware systems
products 1,079 1,079
Hardware systems
support 619 619
-------- -------- -------- -------- --------
Hardware Systems
Revenues 1,698 1,698
Consulting 666 666
On Demand 321 321
Education 81 81
-------- -------- -------- -------- --------
Services Revenues 1,068 1,068
-------- -------- -------- -------- --------
Total Revenues $ 7,502 $ 7,502
======== ======== ======== ======== ========
AS REPORTED REVENUE
GROWTH RATES
New software licenses 25% 25%
Software license
updates and product
support 11% 11%
Software Revenues 14% 14%
Hardware systems
products * *
Hardware systems
support * *
Hardware Systems
Revenues * *
Consulting 0% 0%
On Demand 78% 78%
Education 24% 24%
Services Revenues 18% 18%
Total Revenues 48% 48%
CONSTANT CURRENCY GROWTH
RATES (2)
New software licenses 25% 25%
Software license
updates and product
support 12% 12%
Software Revenues 15% 15%
Hardware systems
products * *
Hardware systems
support * *
Hardware Systems
Revenues * *
Consulting 1% 1%
On Demand 80% 80%
Education 24% 24%
Services Revenues 18% 18%
Total Revenues 49% 49%
-------- -------- -------- -------- --------
GEOGRAPHIC REVENUES
REVENUES
Americas $ 3,904 $ 3,904
Europe, Middle East &
Africa 2,381 2,381
Asia Pacific 1,217 1,217
-------- -------- -------- -------- --------
Total Revenues $ 7,502 $ 7,502
======== ======== ======== ======== ========
HEADCOUNT
GEOGRAPHIC AREA
Americas 44,494 44,494
Europe, Middle East &
Africa 22,886 22,886
Asia Pacific 37,856 37,856
-------- -------- -------- -------- --------
Total Company 105,236 105,236
======== ======== ======== ======== ========
(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, 2010 and 2009 for the fiscal 2011
and fiscal 2010 constant currency growth rate calculations presented,
respectively, rather than the actual exchange rates in effect during
the respective periods.
* Not meaningful
ORACLE CORPORATION
Q1 FISCAL 2011 FINANCIAL RESULTS
SUPPLEMENTAL TOTAL SOFTWARE PRODUCT REVENUE ANALYSIS (1)
($ in millions)
Fiscal 2010
------------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
-------- -------- -------- -------- --------
SOFTWARE REVENUES
DATABASE & MIDDLEWARE
REVENUES
New software licenses $ 711 $ 1,175 $ 1,241 $ 2,280 $ 5,406
Software license
updates and product
support 2,065 2,131 2,191 2,309 8,696
-------- -------- -------- -------- --------
Database and
Middleware
Revenues $ 2,776 $ 3,306 $ 3,432 $ 4,589 $ 14,102
======== ======== ======== ======== ========
AS REPORTED GROWTH RATES
New software licenses (22%) 1% 11% 18% 6%
Software license
updates and product
support 9% 16% 14% 15% 14%
Database and
Middleware
Revenues (1%) 10% 13% 16% 10%
CONSTANT CURRENCY GROWTH
RATES (2)
New software licenses (19%) (5%) 5% 18% 4%
Software license
updates and product
support 14% 12% 9% 13% 12%
Database and
Middleware
Revenues 4% 5% 8% 16% 9%
-------- -------- -------- -------- --------
APPLICATIONS REVENUES
New software licenses $ 317 $ 478 $ 477 $ 855 $ 2,127
Software license
updates and product
support 1,052 1,116 1,106 1,122 4,396
-------- -------- -------- -------- --------
Applications
Revenues $ 1,369 $ 1,594 $ 1,583 $ 1,977 $ 6,523
======== ======== ======== ======== ========
AS REPORTED GROWTH RATES
New software licenses (4%) 2% 21% 6% 6%
Software license
updates and product
support 1% 10% 10% 8% 7%
Applications
Revenues 0% 7% 13% 7% 7%
CONSTANT CURRENCY GROWTH
RATES (2)
New software licenses 0% (3%) 15% 7% 5%
Software license
updates and product
support 6% 6% 5% 6% 6%
Applications
Revenues 4% 3% 8% 6% 5%
-------- -------- -------- -------- --------
Fiscal 2011
------------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
-------- -------- -------- -------- --------
SOFTWARE REVENUES
DATABASE & MIDDLEWARE
REVENUES
New software licenses $ 937 $ 937
Software license
updates and product
support 2,316 2,316
-------- -------- -------- -------- --------
Database and
Middleware
Revenues $ 3,253 $ 3,253
======== ======== ======== ======== ========
AS REPORTED GROWTH RATES
New software licenses 32% 32%
Software license
updates and product
support 12% 12%
Database and
Middleware
Revenues 17% 17%
CONSTANT CURRENCY GROWTH
RATES (2)
New software licenses 32% 32%
Software license
updates and product
support 13% 13%
Database and
Middleware
Revenues 18% 18%
-------- -------- -------- -------- --------
APPLICATIONS REVENUES
New software licenses $ 349 $ 349
Software license
updates and product
support 1,134 1,134
-------- -------- -------- -------- --------
Applications
Revenues $ 1,483 $ 1,483
======== ======== ======== ======== ========
AS REPORTED GROWTH RATES
New software licenses 10% 10%
Software license
updates and product
support 8% 8%
Applications
Revenues 8% 8%
CONSTANT CURRENCY GROWTH
RATES (2)
New software licenses 10% 10%
Software license
updates and product
support 9% 9%
Applications
Revenues 9% 9%
-------- -------- -------- -------- --------
(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, 2010 and 2009 for the fiscal 2011
and fiscal 2010 constant currency growth rate calculations presented,
respectively, rather than the actual exchange rates in effect during
the respective periods.
ORACLE CORPORATION
Q1 FISCAL 2011 FINANCIAL RESULTS
SUPPLEMENTAL GEOGRAPHIC NEW SOFTWARE LICENSE AND HARDWARE SYSTEMS
PRODUCTS REVENUES ANALYSIS (1)
($ in millions)
Fiscal 2010
------------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
-------- -------- -------- -------- --------
AMERICAS
Database & Middleware $ 310 $ 492 $ 540 $ 1,123 $ 2,465
Applications 185 286 283 485 1,239
-------- -------- -------- -------- --------
New Software License
Revenues $ 495 $ 778 $ 823 $ 1,608 $ 3,704
-------- -------- -------- -------- --------
Hardware Systems
Products Revenues $ - $ - $ 131 $ 617 $ 747
======== ======== ======== ======== ========
AS REPORTED GROWTH RATES
Database & Middleware (12%) 4% 20% 34% 17%
Applications 2% 2% 26% 16% 12%
New Software License
Revenues (7%) 4% 22% 28% 15%
Hardware Systems
Products Revenues * * * * *
CONSTANT CURRENCY GROWTH
RATES (2)
Database & Middleware (11%) 2% 16% 32% 15%
Applications 6% 1% 23% 15% 11%
New Software License
Revenues (5%) 1% 18% 26% 14%
Hardware Systems
Products Revenues * * * * *
-------- -------- -------- -------- --------
EUROPE / MIDDLE EAST /
AFRICA
Database & Middleware $ 224 $ 429 $ 456 $ 751 $ 1,859
Applications 90 119 134 261 604
-------- -------- -------- -------- --------
New Software License
Revenues $ 314 $ 548 $ 590 $ 1,012 $ 2,463
-------- -------- -------- -------- --------
Hardware Systems
Products Revenues $ - $ - $ 95 $ 390 $ 485
======== ======== ======== ======== ========
AS REPORTED GROWTH RATES
Database & Middleware (31%) (1%) 2% (1%) (5%)
Applications (5%) (6%) 7% (7%) (4%)
New Software License
Revenues (25%) (2%) 3% (3%) (5%)
Hardware Systems
Products Revenues * * * * *
CONSTANT CURRENCY GROWTH
RATES (2)
Database & Middleware (26%) (10%) (3%) 6% (5%)
Applications 3% (14%) 1% (2%) (3%)
New Software License
Revenues (20%) (11%) (2%) 4% (4%)
Hardware Systems
Products Revenues * * * * *
-------- -------- -------- -------- --------
ASIA PACIFIC
Database & Middleware $ 177 $ 254 $ 245 $ 406 $ 1,082
Applications 42 73 60 109 284
-------- -------- -------- -------- --------
New Software License
Revenues $ 219 $ 327 $ 305 $ 515 $ 1,366
-------- -------- -------- -------- --------
Hardware Systems
Products Revenues $ - $ - $ 47 $ 226 $ 274
======== ======== ======== ======== ========
AS REPORTED GROWTH RATES
Database & Middleware (22%) 0% 9% 19% 3%
Applications (24%) 17% 29% 2% 5%
New Software License
Revenues (22%) 3% 12% 15% 4%
Hardware Systems
Products Revenues * * * * *
CONSTANT CURRENCY GROWTH
RATES (2)
Database & Middleware (22%) (10%) 1% 14% (3%)
Applications (23%) 2% 16% (3%) (2%)
New Software License
Revenues (22%) (8%) 4% 10% (3%)
Hardware Systems
Products Revenues * * * * *
-------- -------- -------- -------- --------
TOTAL COMPANY
Database & Middleware $ 711 $ 1,175 $ 1,241 $ 2,280 $ 5,406
Applications 317 478 477 855 2,127
-------- -------- -------- -------- --------
New Software License
Revenues $ 1,028 $ 1,653 $ 1,718 $ 3,135 $ 7,533
-------- -------- -------- -------- --------
Hardware Systems
Products Revenues $ - $ - $ 273 $ 1,233 $ 1,506
======== ======== ======== ======== ========
AS REPORTED GROWTH RATES
Database & Middleware (22%) 1% 11% 18% 6%
Applications (4%) 2% 21% 6% 6%
New Software License
Revenues (17%) 2% 13% 14% 6%
Hardware Systems
Products Revenues * * * * *
CONSTANT CURRENCY GROWTH
RATES (2)
Database & Middleware (19%) (5%) 5% 18% 4%
Applications 0% (3%) 15% 7% 5%
New Software License
Revenues (14%) (5%) 8% 15% 4%
Hardware Systems
Products Revenues * * * * *
-------- -------- -------- -------- --------
Fiscal 2011
------------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
-------- -------- -------- -------- --------
AMERICAS
Database & Middleware $ 446 $ 446
Applications 212 212
-------- -------- -------- -------- --------
New Software License
Revenues $ 658 $ 658
-------- -------- -------- -------- --------
Hardware Systems
Products Revenues $ 543 $ 543
======== ======== ======== ======== ========
AS REPORTED GROWTH RATES
Database & Middleware 44% 44%
Applications 14% 14%
New Software License
Revenues 33% 33%
Hardware Systems
Products Revenues * *
CONSTANT CURRENCY GROWTH
RATES (2)
Database & Middleware 43% 43%
Applications 14% 14%
New Software License
Revenues 32% 32%
Hardware Systems
Products Revenues * *
-------- -------- -------- -------- --------
EUROPE / MIDDLE EAST /
AFRICA
Database & Middleware $ 279 $ 279
Applications 73 73
-------- -------- -------- -------- --------
New Software License
Revenues $ 352 $ 352
-------- -------- -------- -------- --------
Hardware Systems
Products Revenues $ 338 $ 338
======== ======== ======== ======== ========
AS REPORTED GROWTH RATES
Database & Middleware 25% 25%
Applications (19%) (19%)
New Software License
Revenues 12% 12%
Hardware Systems
Products Revenues * *
CONSTANT CURRENCY GROWTH
RATES (2)
Database & Middleware 32% 32%
Applications (16%) (16%)
New Software License
Revenues 18% 18%
Hardware Systems
Products Revenues * *
-------- -------- -------- -------- --------
ASIA PACIFIC
Database & Middleware $ 212 $ 212
Applications 64 64
-------- -------- -------- -------- --------
New Software License
Revenues $ 276 $ 276
-------- -------- -------- -------- --------
Hardware Systems
Products Revenues $ 198 $ 198
======== ======== ======== ======== ========
AS REPORTED GROWTH RATES
Database & Middleware 19% 19%
Applications 54% 54%
New Software License
Revenues 26% 26%
Hardware Systems
Products Revenues * *
CONSTANT CURRENCY GROWTH
RATES (2)
Database & Middleware 13% 13%
Applications 47% 47%
New Software License
Revenues 19% 19%
Hardware Systems
Products Revenues * *
-------- -------- -------- -------- --------
TOTAL COMPANY
Database & Middleware $ 937 $ 937
Applications 349 349
-------- -------- -------- -------- --------
New Software License
Revenues $ 1,286 $ 1,286
-------- -------- -------- -------- --------
Hardware Systems
Products Revenues $ 1,079 $ 1,079
======== ======== ======== ======== ========
AS REPORTED GROWTH RATES
Database & Middleware 32% 32%
Applications 10% 10%
New Software License
Revenues 25% 25%
Hardware Systems
Products Revenues * *
CONSTANT CURRENCY GROWTH
RATES (2)
Database & Middleware 32% 32%
Applications 10% 10%
New Software License
Revenues 25% 25%
Hardware Systems
Products Revenues * *
-------- -------- -------- -------- --------
(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, 2010 and 2009 for the fiscal 2011
and fiscal 2010 constant currency growth rate calculations presented,
respectively, rather than the actual exchange rates in effect during
the respective periods.
* Not meaningful
APPENDIX A
ORACLE CORPORATION
Q1 FISCAL 2011 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:
- Software license updates and product support and hardware
systems support deferred revenues: Business combination accounting
rules require us to account for the fair values of software license updates
and product support contracts and hardware systems support contracts
assumed in connection with our acquisitions. Because these support
contracts are typically one year in duration, our GAAP revenues for the one
year period subsequent to our acquisition of a business do not reflect the
full amount of support revenues on these assumed support contracts that
would have otherwise been recorded by the acquired entity. The non-GAAP
adjustment to our software license updates and product support revenues and
hardware systems support revenues is intended to include, and thus reflect,
the full amount of such revenues. We believe the adjustment to these
support revenues is useful to investors as a measure of the ongoing
performance of our business. We have historically experienced high renewal
rates on our software license updates and product support contracts and our
objective is to increase the renewal rates on acquired and new hardware
systems support contracts; however, we cannot be certain that our customers
will renew our software license updates and product support contracts or
our hardware systems support 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 our revenues earned during the periods presented and
will contribute to our future period revenues as well. Amortization of
intangible assets will recur in future periods.
- Acquisition related and other expenses; and restructuring
expenses: We have excluded the effect of acquisition related and other
expenses and the effect of restructuring expenses from our non-GAAP
operating expenses and net income measures. 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 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 generally diminish over time with respect to past
acquisitions, we generally will incur these expenses in connection with any
future acquisitions.