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Oracle Reports Q2 GAAP EPS of 25 Cents, Non-GAAP EPS of 34 Cents
Oracle Reports Q2 GAAP EPS of 25 Cents, Non-GAAP EPS of 34 Cents
Strengthening Dollar Reduces GAAP EPS by 4 Cents and Reduces Non-GAAP EPS by 3
Cents
PR Newswire
REDWOOD SHORES, Calif., Dec. 18
REDWOOD SHORES, Calif., Dec. 18 /PRNewswire-FirstCall/ -- Oracle Corporation
(Nasdaq: ORCL) today announced fiscal 2009 Q2 GAAP earnings per share were
$0.25, in line with GAAP earnings per share in Q2 of last year. Second quarter
GAAP total revenues were up 6% to $5.6 billion, while quarterly GAAP net
income was down 1% to $1.3 billion. GAAP software revenues were up 8% to $4.5
billion with new software license revenues down 3% to $1.6 billion. GAAP
software license updates and product support revenues were up 14% to $2.9
billion. GAAP services revenues were down 2% to $1.1 billion. GAAP operating
income was up 11% to $2.0 billion and GAAP operating margin was up 166 basis
points to 35%. GAAP operating cash flow on a trailing twelve month basis was
$8.1 billion, up 16%.
(Logo: http://www.newscom.com/cgi-bin/prnh/20020718/ORCLLOGO)
Without the $0.04 per share impact of the US dollar strengthening compared to
foreign currencies, Oracle's reported Q2 GAAP earnings per share would have
been up 11% to $0.29, with total GAAP revenues up 12%, quarterly GAAP net
income up 10%, GAAP software revenues up 14%, GAAP new software license
revenues up 5%, GAAP software license updates and product support revenues up
20%, GAAP services revenues up 5%, and GAAP operating income up 20%.
Second quarter non-GAAP earnings per share were up 9% to $0.34, and non- GAAP
net income was up 8% to $1.7 billion, compared to the same quarter last year.
Non-GAAP total revenues were up 6% to $5.7 billion. Non-GAAP software revenues
were up 8% to $4.6 billion and non-GAAP software license updates and product
support revenues were up 15% to $2.9 billion.
Without the $0.03 per share impact of the US dollar strengthening compared to
foreign currencies, Oracle's reported Q2 non-GAAP earnings per share would
have been up 18% to $0.37, with non-GAAP net income up 17%, non-GAAP total
revenues up 13%, non-GAAP total software revenues up 15%, and non-GAAP
software license updates and product support revenues up 21%.
"Our non-GAAP operating income grew 25% in constant currency to $2.6 billion
in Q2, resulting in operating margins of 46%," said Oracle Executive Vice
President and CFO, Jeff Epstein. "In addition, Oracle generated $7.6 billion
in free cash flow in the past twelve months, up 15% over the same period last
year."
"We signed our largest on-demand sales force automation contract this
quarter," said Oracle CEO, Larry Ellison. "This was just one of several recent
wins over salesforce.com. We also sold our first database machine, launching
an all new and important business for Oracle."
Q2 Earnings Conference Call and Webcast
Oracle will hold a conference call and web broadcast today to discuss these
results at 2:00 p.m. (PST) / 5:00 p.m. (EST). To access the live web broadcast
of this event, please visit the Oracle Investor Relations website at
http://www.oracle.com/investor. Please hold down your control key while
pressing refresh to ensure that the web link is visible.
Supplemental Financial Tables
Supplemental financial materials regarding these results are available on our
Investor Relations website at: http://www.oracle.com/investor. To receive
these supplemental financial tables and other Investor Relations alerts
directly, please subscribe to Oracle's RSS feeds via the RSS link on our
website.
About Oracle
Oracle Corporation 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
future plans 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
global economic crisis) could adversely affect our revenue growth and
profitability through reductions in IT budgets and expenditures. (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) Periodic changes to our
pricing model and sales organization could temporarily disrupt operations and
cause a decline or delay in sales. (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 December 18, 2008. Oracle undertakes no duty to update any
statement in light of new information or future events.
ORACLE CORPORATION
Q2 FISCAL 2009 FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ in millions, except per share data)
Three Months Ended November 30,
----------------------------------- % Increase
% Increase (Decrease)
% of % of (Decrease) in Constant
2008 Revenues 2007 Revenues in US $ Currency (1)
---------------------------------------------------------
REVENUES
New software
licenses $1,626 29% $1,668 31% (3%) 5%
Software
license
updates and
product
support 2,850 51% 2,491 47% 14% 20%
--------------------------------
Software
Revenues 4,476 80% 4,159 78% 8% 14%
--------------------------------
Services 1,131 20% 1,154 22% (2%) 5%
--------------------------------
Total
Revenues 5,607 100% 5,313 100% 6% 12%
--------------------------------
OPERATING
EXPENSES
Sales and
marketing 1,146 20% 1,095 21% 5% 11%
Software license
updates and
product support 257 5% 246 5% 4% 11%
Cost of services 939 17% 992 19% (5%) 2%
Research and
development 651 12% 674 12% (3%) 0%
General and
administrative 174 3% 206 4% (16%) (11%)
Amortization of
intangible
assets 427 8% 290 5% 47% 47%
Acquisition
related and
other 21 0% 22 0% 0% 1%
Restructuring 17 0% 6 0% 196% 260%
--------------------------------
Total
Operating
Expenses 3,632 65% 3,531 66% 3% 8%
--------------------------------
OPERATING INCOME 1,975 35% 1,782 34% 11% 20%
Interest
expense (157) (3%) (89) (2%) 76% 76%
Non-operating
income, net 8 0% 122 2% (94%) (78%)
--------------------------------
INCOME BEFORE
PROVISION FOR
INCOME TAXES 1,826 32% 1,815 34% 1% 11%
--------------------------------
Provision for
income taxes 530 9% 512 9% 3% 14%
--------------------------------
NET INCOME $1,296 23% $1,303 25% (1%) 10%
================================
EARNINGS PER
SHARE:
Basic $0.25 $0.25
Diluted $0.25 $0.25
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING:
Basic 5,127 5,125
Diluted 5,187 5,232
(1) We compare the percent change in the results from one period to
another period using constant currency disclosure. We present constant
currency information to provide a framework for assessing how our
underlying businesses performed excluding the effect of foreign
currency rate fluctuations. To present this information, current and
comparative prior period results for entities reporting in currencies
other than United States dollars are converted into United States
dollars at the exchange rate in effect on May 31, 2008, which was the
last day of our prior fiscal year, rather than the actual exchange
rates in effect during the respective periods. The United States
dollar strengthened relative to most major international currencies in
the three months ended November 30, 2008 compared with the
corresponding prior year period, reducing 6 percentage points of
revenue, 5 percentage points of operating expense and 9 percentage
points of operating income growth.
ORACLE CORPORATION
Q2 FISCAL 2009 FINANCIAL RESULTS
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)
($ in millions, except per share data)
Three Months Ended November 30,
-------------------------------------------------------
2008 2008 2007 2007
GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP
-------------------------------------------------------
TOTAL
REVENUES (3) $5,607 $80 $5,687 $5,313 $51 $5,364
TOTAL SOFTWARE
REVENUES (3) $4,476 $80 $4,556 $4,159 $51 $4,210
New software
licenses 1,626 - 1,626 1,668 - 1,668
Software
license
updates and
product
support (3) 2,850 $80 2,930 2,491 51 2,542
TOTAL OPERATING
EXPENSES $3,632 $(554) $3,078 $3,531 $(381) $3,150
Stock-based
compensation (4) 89 (89) - 63 (63) -
Amortization of
intangible
assets (5) 427 (427) - 290 (290) -
Acquisition
related and
other 21 (21) - 22 (22) -
Restructuring 17 (17) - 6 (6) -
OPERATING
INCOME $1,975 $634 $2,609 $1,782 $432 $2,214
OPERATING
MARGIN % 35% 46% 34% 41%
INCOME TAX
EFFECTS (6) $530 $184 $714 $512 $122 $634
NET INCOME $1,296 $450 $1,746 $1,303 $310 $1,613
DILUTED EARNINGS
PER SHARE $0.25 $0.34 $0.25 $0.31
DILUTED WEIGHTED
AVERAGE COMMON
SHARES
OUTSTANDING 5,187 - 5,187 5,232 1 5,233
% Increase
% Increase (Decrease) in
(Decrease) in US $ Constant Currency (2)
------------------------------------------------
GAAP Non-GAAP GAAP Non-GAAP
------------------------------------------------
TOTAL REVENUES (3) 6% 6% 12% 13%
TOTAL SOFTWARE
REVENUES (3) 8% 8% 14% 15%
New software licenses (3%) (3%) 5% 5%
Software license updates
and product support (3) 14% 15% 20% 21%
TOTAL OPERATING EXPENSES 3% (2%) 8% 4%
Stock-based
compensation (4) 42% * 42% *
Amortization of
intangible assets (5) 47% * 47% *
Acquisition related
and other 0% * 1% *
Restructuring 196% * 260% *
OPERATING INCOME 11% 18% 20% 25%
OPERATING MARGIN % 166 bp 460 bp 234 bp 465 bp
INCOME TAX EFFECTS (6) 3% 13% 14% 21%
NET INCOME (1%) 8% 10% 17%
DILUTED EARNINGS PER
SHARE 0% 9% 11% 18%
DILUTED WEIGHTED
AVERAGE COMMON
SHARES OUTSTANDING (1%) (1%) (1%) (1%)
(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, 2008, 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 November 30, 2008, approximately $71 million and $20 million in
estimated revenues related to assumed support contracts will not be
recognized during the remainder of fiscal 2009 and 2010, respectively,
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
November 30, 2008 November 30, 2007
------------------------- --------------------------
GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP
------------------------- --------------------------
Sales and marketing $16 $(16) $- $13 $(13) $-
Software license
updates and product
support 3 (3) - 3 (3) -
Cost of services 3 (3) - 3 (3) -
Research and
development 45 (45) - 25 (25) -
General and
administrative 22 (22) - 19 (19) -
---- ----- ----- ---- ------ -----
Subtotal 89 (89) - 63 (63) -
---- ----- ----- ---- ------ -----
Acquisition related
and other 6 (6) - 4 (4) -
---- ----- ----- ---- ------ -----
Total stock-based
compensation $95 $(95) $- $67 $(67) $-
==== ===== ===== ==== ====== =====
(5) Estimated future annual amortization expense related to intangible
assets as of November 30, 2008 is as follows:
Remainder of Fiscal 2009 $886
Fiscal 2010 1,645
Fiscal 2011 1,356
Fiscal 2012 1,209
Fiscal 2013 1,077
Fiscal 2014 876
Thereafter 1,052
------
Total $8,101
======
(6) Income tax effects were calculated reflecting an effective GAAP and
non-GAAP tax rate of 29.0% in the second quarter of fiscal 2009 and
28.2% in the second quarter of fiscal 2008.
* Not meaningful
ORACLE CORPORATION
Q2 FISCAL 2009 YEAR TO DATE FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ in millions, except per share data)
Six Months Ended November 30,
-----------------------------------
% Increase
% Increase (Decrease)
% of % of (Decrease) in Constant
2008 Revenues 2007 Revenues in US $ Currency (1)
---------------------------------------------------------
REVENUES
New software
licenses $2,863 26% $2,756 28% 4% 7%
Software
license
updates and
product
support 5,785 53% 4,873 50% 19% 19%
---------------------------------
Software
Revenues 8,648 79% 7,629 78% 13% 15%
---------------------------------
Services 2,290 21% 2,213 22% 3% 6%
---------------------------------
Total
Revenues 10,938 100% 9,842 100% 11% 13%
---------------------------------
OPERATING
EXPENSES
Sales and
marketing 2,258 21% 2,070 21% 9% 10%
Software
license
updates and
product
support 539 5% 474 5% 14% 15%
Cost of
services 1,965 18% 1,922 20% 2% 4%
Research and
development 1,360 12% 1,326 13% 3% 4%
General and
administrative 379 3% 402 4% (6%) (4%)
Amortization of
intangible
assets 839 8% 575 6% 46% 46%
Acquisition
related and
other 71 1% 68 0% 4% 6%
Restructuring 31 0% 6 0% 429% 495%
---------------------------------
Total
Operating
Expenses 7,442 68% 6,843 69% 9% 10%
---------------------------------
OPERATING
INCOME 3,496 32% 2,999 31% 17% 19%
Interest
expense (317) (3%) (183) (2%) 74% 74%
Non-operating
income, net 90 1% 199 2% (55%) (45%)
---------------------------------
INCOME BEFORE
PROVISION FOR
INCOME TAXES 3,269 30% 3,015 31% 8% 12%
---------------------------------
Provision for
income taxes 896 8% 871 9% 3% 6%
---------------------------------
NET INCOME $2,373 22% $2,144 22% 11% 14%
=================================
EARNINGS PER
SHARE:
Basic $0.46 $0.42
Diluted $0.46 $0.41
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING:
Basic 5,140 5,117
Diluted 5,211 5,224
(1) We compare the percent change in the results from one period to
another period using constant currency disclosure. We present constant
currency information to provide a framework for assessing how our
underlying businesses performed excluding the effect of foreign
currency rate fluctuations. To present this information, current and
comparative prior period results for entities reporting in currencies
other than United States dollars are converted into United States
dollars at the exchange rate in effect on May 31, 2008, which was the
last day of our prior fiscal year, rather than the actual exchange
rates in effect during the respective periods. The United States
dollar strengthened relative to most major international currencies in
the six months ended November 30, 2008 compared with the corresponding
prior year period, reducing 2 percentage points of revenue, 1
percentage point of operating expense and 2 percentage points of
operating income growth.
ORACLE CORPORATION
Q2 FISCAL 2009 YEAR TO DATE FINANCIAL RESULTS
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)
($ in millions, except per share data)
Six Months Ended November 30,
-------------------------------------------------------
2008 2008 2007 2007
GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP
-------------------------------------------------------
TOTAL
REVENUES (3) $10,938 $171 $11,109 $9,842 $115 $9,957
TOTAL SOFTWARE
REVENUES (3) $8,648 $171 $8,819 $7,629 $115 $7,744
New software
licenses 2,863 - 2,863 2,756 - 2,756
Software
license updates
and product
support (3) 5,785 171 5,956 4,873 115 4,988
TOTAL OPERATING
EXPENSES $7,442 $(1,116) $6,326 $6,843 $(780) $6,063
Stock-based
compensation (4) 175 (175) - 131 (131) -
Amortization of
intangible
assets (5) 839 (839) - 575 (575) -
Acquisition
related and
other 71 (71) - 68 (68) -
Restructuring 31 (31) - 6 (6) -
OPERATING
INCOME $3,496 $1,287 $4,783 $2,999 $895 $3,894
OPERATING
MARGIN % 32% 43% 31% 39%
INCOME TAX
EFFECTS (6) $896 $353 $1,249 $871 $259 $1,130
NET INCOME $2,373 $934 $3,307 $2,144 $636 $2,780
DILUTED EARNINGS
PER SHARE $0.46 $0.63 $0.41 $0.53
DILUTED WEIGHTED
AVERAGE COMMON
SHARES
OUTSTANDING 5,211 - 5,211 5,224 3 5,227
% Increase in
% Increase in US $ Constant Currency (2)
--------------------------------------------
GAAP Non-GAAP GAAP Non-GAAP
--------------------------------------------
TOTAL REVENUES (3) 11% 12% 13% 13%
TOTAL SOFTWARE
REVENUES (3) 13% 14% 15% 16%
New software licenses 4% 4% 7% 7%
Software license updates
and product support (3) 19% 19% 19% 20%
TOTAL OPERATING EXPENSES 9% 4% 10% 6%
Stock-based compensation (4) 33% * 33% *
Amortization of
intangible assets (5) 46% * 46% *
Acquisition related
and other 4% * 6% *
Restructuring 429% * 495% *
OPERATING INCOME 17% 23% 19% 25%
OPERATING MARGIN % 149 bp 394 bp 167 bp 392 bp
INCOME TAX EFFECTS (6) 3% 10% 6% 13%
NET INCOME 11% 19% 14% 21%
DILUTED EARNINGS PER
SHARE 11% 19% 14% 22%
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 rate in effect on May 31, 2008, 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 November 30, 2008, approximately $71 million and $20 million in
estimated revenues related to assumed support contracts will not be
recognized during the remainder of fiscal 2009 and 2010, respectively,
due to business combination accounting rules.
(4) Stock-based compensation is included in the following GAAP operating
expense categories:
Six Months Ended Six Months Ended
November 30, 2008 November 30, 2007
-------------------------- --------------------------
GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP
-------------------------- --------------------------
Sales and marketing $35 $(35) $- $26 $(26) $-
Software license
updates and product
support 6 (6) - 7 (7) -
Cost of services 6 (6) - 8 (8) -
Research and
development 82 (82) - 52 (52) -
General and
administrative 46 (46) - 38 (38) -
----- ------ ----- ----- ------ ------
Subtotal 175 (175) - 131 (131) -
----- ------ ----- ----- ------ ------
Acquisition related
and other 11 (11) - 37 (37) -
----- ------ ----- ----- ------ ------
Total stock-based
compensation $186 $(186) $- $168 $(168) $-
===== ====== ===== ===== ------ ------
(5) Estimated future annual amortization expense related to intangible
assets as of November 30, 2008 is as follows:
Remainder of Fiscal 2009 $886
Fiscal 2010 1,645
Fiscal 2011 1,356
Fiscal 2012 1,209
Fiscal 2013 1,077
Fiscal 2014 876
Thereafter 1,052
------
Total $8,101
======
(6) Income tax effects were calculated reflecting an effective GAAP and
non-GAAP tax rate of 27.4% in the first half of fiscal 2009 and 28.9%
in the first half of fiscal 2008.
* Not meaningful
ORACLE CORPORATION
Q2 FISCAL 2009 FINANCIAL RESULTS
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in millions)
November 30, May 31,
2008 2008
-------------------------
ASSETS
Current Assets:
Cash and cash equivalents $7,353 $8,262
Marketable securities 3,293 2,781
Trade receivables, net 3,253 5,127
Deferred tax assets 634 853
Prepaid expenses and other current assets 605 1,080
-------------------------
Total Current Assets 15,138 18,103
Non-Current Assets:
Property, net 1,907 1,688
Intangible assets, net 8,101 8,395
Goodwill 18,587 17,991
Other assets 1,069 1,091
-------------------------
Total Non-Current Assets 29,664 29,165
-------------------------
TOTAL ASSETS $44,802 $47,268
=========================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable, current and other current
borrowings $1,002 $1,001
Accounts payable 346 383
Accrued compensation and related benefits 1,062 1,770
Deferred revenues 3,881 4,492
Other current liabilities 1,672 2,383
-------------------------
Total Current Liabilities 7,963 10,029
Non-Current Liabilities:
Notes payable and other non-current
borrowings 10,236 10,235
Income taxes payable 1,680 1,566
Deferred tax liabilities 1,062 1,218
Other non-current liabilities 1,040 1,195
-------------------------
Total Non-Current Liabilities 14,018 14,214
Stockholders' Equity 22,821 23,025
-------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $44,802 $47,268
=========================
ORACLE CORPORATION
Q2 FISCAL 2009 YEAR TO DATE FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in millions)
Six Months Ended November 30,
-----------------------------
2008 2007
-----------------------------
Cash Flows From Operating Activities:
Net income $2,373 $2,144
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 134 137
Amortization of intangible assets 839 575
Deferred income taxes (151) (72)
Minority interests in income 35 29
Stock-based compensation 186 168
Tax benefit on the exercise of stock options 121 262
Excess tax benefits on the exercise of stock
options (79) (187)
In-process research and development 6 7
Other gains, net (2) (2)
Changes in operating assets and liabilities,
net of effects from acquisitions:
Decrease in trade receivables, net 1,642 937
Decrease in prepaid expenses and other
assets 388 27
Decrease in accounts payable and other
liabilities (1,022) (551)
Decrease in income taxes payable (273) (241)
(Decrease) increase in deferred
revenues (207) 70
-----------------------------
Net cash provided by operating
activities 3,990 3,303
-----------------------------
Cash Flows From Investing Activities:
Purchases of marketable securities and other
investments (5,105) (1,953)
Proceeds from maturities and sales of
marketable securities and other investments 4,362 1,273
Acquisitions, net of cash acquired (1,065) (651)
Capital expenditures (399) (156)
-----------------------------
Net cash used for investing activities (2,207) (1,487)
-----------------------------
Cash Flows From Financing Activities:
Payments for repurchases of common stock (2,344) (1,023)
Proceeds from issuances of common stock 371 682
Repayments of borrowings (4) (1,362)
Excess tax benefits on the exercise of stock
options 79 187
Distributions to minority interests (30) (28)
-----------------------------
Net cash used for financing
activities (1,928) (1,544)
-----------------------------
Effect of exchange rate changes on cash and
cash equivalents (764) 243
-----------------------------
Net (decrease) increase in cash and cash
equivalents (909) 515
-----------------------------
Cash and cash equivalents at beginning of
period 8,262 6,218
-----------------------------
Cash and cash equivalents at end of period $7,353 $6,733
=============================
ORACLE CORPORATION
Q2 FISCAL 2009 FINANCIAL RESULTS
FREE CASH FLOW - TRAILING 4-QUARTERS (1)
($ in millions)
Fiscal 2008 Fiscal 2009
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
GAAP Operating
Cash Flow $6,598 $6,957 $7,322 $7,402 $7,941 $8,089
Capital
Expenditures (2) (357) (369) (331) (243) (479) (486)
Free Cash Flow $6,241 $6,588 $6,991 $7,159 $7,462 $7,603
% Growth over
prior year 40% 50% 48% 38% 20% 15%
GAAP Net Income $4,444 $4,781 $5,088 $5,521 $5,758 $5,750
Free Cash Flow as
a % of Net Income 140% 138% 137% 130% 130% 132%
(1) To supplement our statements of cash flows presented on a GAAP basis,
we use non-GAAP measures of cash flows on a trailing 4-quarter basis
to analyze cash flow generated from operations. We believe free cash
flow is also useful as one of the bases for comparing our performance
with our competitors. The presentation of non-GAAP free cash flow is
not meant to be considered in isolation or as an alternative to net
income as an indicator of our performance, or as an alternative to
cash flows from operating activities as a measure of liquidity.
(2) Represents capital expenditures as reported in cash flows from
investing activities on our cash flow statements presented in
accordance with GAAP.
ORACLE CORPORATION
Q2 FISCAL 2009 FINANCIAL RESULTS
SUPPLEMENTAL ANALYSIS OF GAAP REVENUES AND HEADCOUNT (1)
($ in millions)
Fiscal 2008
--------------------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
--------------------------------------------------------
REVENUES
New software
licenses $1,087 $1,668 $1,616 $3,144 $7,515
Software
license
updates and
product
support 2,383 2,491 2,624 2,830 10,328
--------------------------------------------------------
Software
Revenues 3,470 4,159 4,240 5,974 17,843
Consulting 801 877 843 957 3,477
On Demand 158 167 174 194 694
Education 100 110 92 114 416
--------------------------------------------------------
Services
Revenues 1,059 1,154 1,109 1,265 4,587
--------------------------------------------------------
Total
Revenues $4,529 $5,313 $5,349 $7,239 $22,430
========================================================
AS REPORTED REVENUE
GROWTH RATES
New software
licenses 35% 38% 16% 27% 28%
Software license
updates and
product support 23% 24% 25% 25% 24%
Software
Revenues 26% 29% 21% 26% 26%
Consulting 25% 23% 21% 17% 21%
On Demand 27% 20% 23% 29% 25%
Education 24% 17% 16% 9% 16%
Services
Revenues 25% 22% 21% 18% 21%
Total
Revenues 26% 28% 21% 24% 25%
CONSTANT CURRENCY
GROWTH RATES
New software
licenses 32% 31% 9% 20% 21%
Software license
updates and
product
support 19% 18% 18% 18% 18%
Software
Revenues 23% 23% 15% 19% 19%
Consulting 20% 15% 14% 11% 15%
On Demand 23% 15% 17% 23% 19%
Education 20% 10% 9% 2% 10%
Services
Revenues 21% 15% 14% 12% 15%
Total
Revenues 22% 21% 15% 18% 19%
--------------------------------------------------------
GEOGRAPHIC REVENUES
REVENUES
Americas $2,375 $2,674 $2,707 $3,574 $11,330
Europe,
Middle
East &
Africa 1,530 1,865 1,871 2,679 7,945
Asia Pacific 624 774 771 986 3,155
--------------------------------------------------------
Total
Revenues $4,529 $5,313 $5,349 $7,239 $22,430
========================================================
HEADCOUNT (2)
GEOGRAPHIC AREA
Americas 30,455 30,654 30,624 32,608
Europe,
Middle
East &
Africa 15,985 16,140 16,383 17,110
Asia Pacific 31,212 32,855 33,212 34,515
----------------------------------------------
Total
Company 77,652 79,649 80,219 84,233
==============================================
Fiscal 2009
--------------------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
REVENUES
New software
licenses $1,237 $1,626 $2,863
Software
license
updates and
product
support 2,935 2,850 5,785
Software
Revenues 4,172 4,476 8,648
Consulting 865 842 1,708
On Demand 195 189 384
Education 99 100 198
--------------------------------------------------------
Services
Revenues 1,159 1,131 2,290
--------------------------------------------------------
Total
Revenues $5,331 $5,607 $10,938
========================================================
AS REPORTED
REVENUE GROWTH
RATES
New software
licenses 14% (3%) 4%
Software license
updates and
product support 23% 14% 19%
Software
Revenues 20% 8% 13%
Consulting 8% (4%) 2%
On Demand 23% 13% 18%
Education (2%) (9%) (6%)
Services
Revenues 9% (2%) 3%
Total
Revenues 18% 6% 11%
CONSTANT CURRENCY
GROWTH RATES
New software
licenses 10% 5% 7%
Software license
updates and
product support 18% 20% 19%
Software
Revenues 16% 14% 15%
Consulting 5% 4% 5%
On Demand 19% 19% 19%
Education (6%) (3%) (4%)
Services
Revenues 6% 5% 6%
Total
Revenues 14% 12% 13%
GEOGRAPHIC REVENUES
REVENUES
Americas $2,687 $2,904 $5,591
Europe, Middle
East & Africa 1,830 1,881 3,711
Asia Pacific 814 822 1,636
--------------------------------------------------------
Total
Revenues $5,331 $5,607 $10,938
========================================================
HEADCOUNT (2)
GEOGRAPHIC AREA
Americas 32,993 33,526
Europe,
Middle
East &
Africa 17,096 17,184
Asia Pacific 35,099 35,947
--------------------------------------------------------
Total
Company 85,188 86,657
========================================================
(1) The sum of the quarterly financial information may vary from year-to-
date financial information due to rounding.
(2) Headcount has increased primarily due to our acquisitions.
ORACLE CORPORATION
Q2 FISCAL 2009 FINANCIAL RESULTS
SUPPLEMENTAL TOTAL SOFTWARE PRODUCT REVENUE ANALYSIS (1)
($ in millions)
Fiscal 2008
---------------------------------------
Q1 Q2 Q3 Q4 TOTAL
---------------------------------------
APPLICATIONS REVENUES
New software licenses $376 $553 $451 $989 $2,369
Software license updates
and product support 886 929 974 1,044 3,833
---------------------------------------
Software Revenues $1,262 $1,482 $1,425 $2,033 $6,202
=======================================
AS REPORTED GROWTH RATES
New software licenses 65% 63% 7% 36% 38%
Software license updates
and product support 26% 28% 27% 25% 26%
Software Revenues 36% 39% 20% 30% 31%
CONSTANT CURRENCY GROWTH
RATES
New software licenses 61% 56% 2% 31% 33%
Software license updates
and product support 22% 21% 20% 19% 20%
Software Revenues 32% 32% 14% 24% 25%
DATABASE & MIDDLEWARE REVENUES
New software licenses $711 $1,115 $1,165 $2,155 $5,146
Software license updates
and product support 1,497 1,562 1,650 1,786 6,495
---------------------------------------
Software Revenues $2,208 $2,677 $2,815 $3,941 $11,641
=======================================
AS REPORTED GROWTH RATES
New software licenses 23% 29% 20% 23% 24%
Software license updates
and product support 21% 22% 23% 24% 23%
Software Revenues 22% 25% 22% 23% 23%
CONSTANT CURRENCY GROWTH RATES
New software licenses 20% 22% 13% 15% 17%
Software license updates
and product support 17% 16% 17% 17% 17%
Software Revenues 18% 18% 15% 16% 17%
Fiscal 2009
---------------------------------------
Q1 Q2 Q3 Q4 TOTAL
---------------------------------------
APPLICATIONS REVENUES
New software licenses $331 $469 $799
Software license updates and
product support 1,043 1,015 2,059
---------------------------------------
Software Revenues $1,374 $1,484 $2,858
=======================================
AS REPORTED GROWTH RATES
New software licenses (12%) (15%) (14%)
Software license updates and
product support 18% 9% 13%
Software Revenues 9% 0% 4%
CONSTANT CURRENCY GROWTH RATES
New software licenses (14%) (9%) (11%)
Software license updates and
product support 13% 15% 14%
Software Revenues 5% 6% 6%
DATABASE & MIDDLEWARE REVENUES
New software licenses $906 $1,157 $2,064
Software license updates and
product support 1,892 1,835 3,726
---------------------------------------
Software Revenues $2,798 $2,992 $5,790
=======================================
AS REPORTED GROWTH RATES
New software licenses 27% 4% 13%
Software license updates and
product support 26% 17% 22%
Software Revenues 27% 12% 19%
CONSTANT CURRENCY GROWTH RATES
New software licenses 23% 12% 16%
Software license updates and
product support 22% 24% 23%
Software Revenues 22% 19% 20%
(1) The sum of the quarterly financial information may vary from year-
to-date financial information due to rounding.
ORACLE CORPORATION
Q2 FISCAL 2009 FINANCIAL RESULTS
SUPPLEMENTAL GEOGRAPHIC NEW SOFTWARE LICENSE REVENUE ANALYSIS (1)
($ in millions)
Fiscal 2008
---------------------------------------
Q1 Q2 Q3 Q4 TOTAL
---------------------------------------
AMERICAS
Database & Middleware $300 $446 $484 $928 $2,157
Applications 199 306 252 552 1,310
---------------------------------------
New Software License
Revenues $499 $752 $736 $1,480 $3,467
=======================================
AS REPORTED GROWTH RATES
Database & Middleware 27% 33% 24% 15% 22%
Applications 58% 57% 1% 33% 33%
New Software License
Revenues 38% 42% 15% 21% 26%
CONSTANT CURRENCY GROWTH RATES
Database & Middleware 26% 31% 21% 13% 20%
Applications 57% 54% (1%) 32% 31%
New Software License
Revenues 37% 39% 13% 19% 24%
EUROPE / MIDDLE EAST / AFRICA
Database & Middleware $255 $424 $448 $884 $2,011
Applications 123 174 141 317 755
---------------------------------------
New Software License
Revenues $378 $598 $589 $1,201 $2,766
=======================================
AS REPORTED GROWTH RATES
Database & Middleware 34% 23% 23% 41% 32%
Applications 77% 72% 14% 41% 46%
New Software License
Revenues 45% 34% 21% 41% 35%
CONSTANT CURRENCY GROWTH
RATES
Database & Middleware 26% 11% 11% 26% 19%
Applications 69% 58% 6% 31% 35%
New Software License
Revenues 37% 21% 10% 27% 23%
ASIA PACIFIC
Database & Middleware $156 $245 $233 $343 $978
Applications 54 73 58 120 304
---------------------------------------
New Software License
Revenues $210 $318 $291 $463 $1,282
=======================================
AS REPORTED GROWTH RATES
Database & Middleware 4% 32% 9% 6% 12%
Applications 67% 66% 18% 37% 43%
New Software License
Revenues 15% 38% 10% 12% 18%
CONSTANT CURRENCY GROWTH RATES
Database & Middleware 1% 25% (1%) (3%) 4%
Applications 60% 57% 5% 27% 33%
New Software License
Revenues 11% 31% 0% 3% 10%
TOTAL COMPANY
Database & Middleware $711 $1,115 $1,165 $2,155 $5,146
Applications 376 553 451 989 2,369
---------------------------------------
New Software License
Revenues $1,087 $1,668 $1,616 $3,144 $7,515
=======================================
AS REPORTED GROWTH RATES
Database & Middleware 23% 29% 20% 23% 24%
Applications 65% 63% 7% 36% 38%
New Software License
Revenues 35% 38% 16% 27% 28%
CONSTANT CURRENCY GROWTH
RATES
Database & Middleware 20% 22% 13% 15% 17%
Applications 61% 56% 2% 31% 33%
New Software License
Revenues 32% 31% 9% 20% 21%
Fiscal 2009
---------------------------------------
Q1 Q2 Q3 Q4 TOTAL
---------------------------------------
AMERICAS
Database & Middleware $354 $471 $825
Applications 182 280 461
---------------------------------------
New Software License
Revenues $536 $751 $1,286
=======================================
AS REPORTED GROWTH RATES
Database & Middleware 18% 5% 11%
Applications (9%) (9%) (9%)
New Software License
Revenues 7% 0% 3%
CONSTANT CURRENCY GROWTH RATES
Database & Middleware 17% 10% 13%
Applications (10%) (6%) (7%)
New Software License
Revenues 6% 3% 4%
EUROPE / MIDDLE EAST / AFRICA
Database & Middleware $326 $431 $758
Applications 94 126 220
---------------------------------------
New Software License
Revenues $420 $557 $978
=======================================
AS REPORTED GROWTH RATES
Database & Middleware 28% 2% 12%
Applications (23%) (28%) (26%)
New Software License
Revenues 11% (7%) 0%
CONSTANT CURRENCY GROWTH RATES
Database & Middleware 20% 16% 18%
Applications (26%) (16%) (20%)
New Software License
Revenues 5% 7% 6%
ASIA PACIFIC
Database & Middleware $226 $255 $481
Applications 55 63 118
---------------------------------------
New Software License
Revenues $281 $318 $599
=======================================
AS REPORTED GROWTH RATES
Database & Middleware 45% 4% 20%
Applications 1% (13%) (7%)
New Software License
Revenues 34% 0% 13%
CONSTANT CURRENCY GROWTH RATES
Database & Middleware 38% 8% 20%
Applications (1%) (2%) (2%)
New Software License
Revenues 28% 5% 15%
TOTAL COMPANY
Database & Middleware $906 $1,157 $2,064
Applications 331 469 799
---------------------------------------
New Software License
Revenues $1,237 $1,626 $2,863
=======================================
AS REPORTED GROWTH RATES
Database & Middleware 27% 4% 13%
Applications (12%) (15%) (14%)
New Software License
Revenues 14% (3%) 4%
CONSTANT CURRENCY GROWTH RATES
Database & Middleware 23% 12% 16%
Applications (14%) (9%) (11%)
New Software License
Revenues 10% 5% 7%
(1) The sum of the quarterly financial information may vary from
year-to-date financial information due to rounding.
APPENDIX A
ORACLE CORPORATION
Q2 FISCAL 2009 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:
O 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.
O 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.
O 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.
O 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 in-
process research and development expenses, personnel related costs for
transitional employees, stock-based compensation expenses (in addition to the
stock-based compensation expenses described above), integration related
professional services, certain business combination adjustments after the
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 Oracle 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.
SOURCE Oracle Corporation
Website: http://www.oracle.com
Contact: Investor Relations, Roy Lobo, +1-650-506-4073,
investor_us@oracle.com, or Corporate Communications, Deborah Hellinger,
+1-650-506-5158, deborah.hellinger@oracle.com, both of Oracle Corporation
Last Updated: December 18, 2008 16:01 EST
