|
REDWOOD SHORES, Calif.,
26-JUN-2007 01:20 PM
Oracle Corporation (NASDAQ: ORCL) today
announced that fiscal 2007 Q4 GAAP earnings per share were up 27% to
$0.31, compared to the same quarter last year. Fourth quarter GAAP
revenues were up 20% to $5.8 billion, while quarterly GAAP net income
was up 23% to $1.6 billion. Total GAAP software revenues were up 19% to
$4.8 billion. GAAP new license revenues were up 17% with GAAP database
and middleware new license revenues up 18% and GAAP applications new
license revenues up 13%. GAAP services revenues were up 26% to $1.1
billion compared to the same quarter last year.
Fourth quarter non-GAAP earnings per share
were up 28% to $0.37, and non-GAAP net income was up 24% to $1.9
billion compared to Q4 last year. For fiscal year 2007, GAAP earnings
per share were up 27% to $0.81. Fiscal year 2007 GAAP revenues were up
25% to $18.0 billion, while annual GAAP net income was up 26% to $4.3
billion. Total GAAP software revenues for the year were up 23% to $14.2
billion with GAAP database and middleware new license revenues up 16%
and GAAP applications new license revenues up 32%. Annual GAAP services
revenues were $3.8 billion, up 33% compared to the year ago period.
Fiscal year 2007 non-GAAP earnings per share
were up 25% year over year to $1.01. Annual non-GAAP net income was up
25% to $5.3 billion compared to fiscal year 2006.
"If you have the right strategy and the best
technology it will show up in your results," said Oracle President and
CFO Safra Catz. "The numbers speak for themselves. Annual revenue
increased $3.6 billion to $18 billion, operating income increased $1.2
billion to $6 billion, and cash flow from operations increased $1
billion to $5.5 billion. It was a great year."
"Over the last twelve months Oracle's
application new software license revenues grew at a rate of 32% while
SAP's growth slowed to 10% in their most recent fiscal year," said
Oracle President Charles Phillips. "Our strategy of combining
innovation with acquisitions is clearly beating SAP's strategy of
trying to build everything themselves using a 1970s-era proprietary
programming language."
"Oracle's unique database grid architecture
has
enabled us to take market share from IBM," said Oracle CEO Larry
Ellison. "Gartner's just published database research report confirms
that Oracle's database market share has now increased to 47% while
IBM's share declined to 21%. IBM has been unable to match the
performance and reliability of Oracle database grids."
Q4 Earnings Announcement
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). 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 weblink is visible.
About Oracle
Oracle is the world's largest enterprise
software company. For more information about Oracle, including
supplemental financial information, please visit
http://www.oracle.com/investor 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 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 new versions of existing or
acquired products. (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. 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 June 26, 2007.
Oracle undertakes no duty to update any statement in light of new
information or future events.
ORACLE CORPORATION
Q4 FISCAL 2007 QUARTER TO DATE FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
Three Months Ended May 31, % Increase % Increase
---------------------------- (Decrease) (Decrease)
% of % of in US in Constant
2007 Revenues 2006 Revenues $ Currency(1)
--------------------------------------------------
REVENUES
New software
licenses $2,481 43% $2,121 43% 17% 13%
Software license
updates and
product support 2,272 39% 1,873 39% 21% 17%
----------------------------
Software Revenues 4,753 82% 3,994 82% 19% 15%
----------------------------
Services 1,075 18% 857 18% 26% 20%
----------------------------
Total Revenues 5,828 100% 4,851 100% 20% 16%
----------------------------
OPERATING EXPENSES
Sales and marketing 1,275 22% 1,100 23% 16% 13%
Software license
updates and product
support 229 4% 206 4% 12% 8%
Cost of services 928 16% 758 16% 22% 17%
Research and
development 600 10% 536 11% 12% 10%
General and
administrative 190 3% 145 3% 31% 26%
Amortization of
intangible
assets 255 4% 185 4% 38% 38%
Acquisition related 74 1% 16 0% 378% 377%
Restructuring (4) 0% 48 1% (109%) (108%)
----------------------------
Total Operating
Expenses 3,547 61% 2,994 62% 18% 15%
----------------------------
OPERATING INCOME 2,281 39% 1,857 38% 23% 18%
Interest expense (96) (2%) (83) (2%) 16% 16%
Non-operating income,
net 79 1% 104 2% (25%) (26%)
----------------------------
INCOME BEFORE PROVISION
FOR INCOME TAXES 2,264 39% 1,878 38% 21% 16%
----------------------------
Provision for
income taxes 660 11% 578 12% 14% 13%
----------------------------
NET INCOME $1,604 28% $1,300 26% 23% 17%
============================
EARNINGS PER SHARE:
Basic $0.31 $0.25 27%
Diluted $0.31 $0.24 27%
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:
Basic 5,122 5,278 (3%)
Diluted 5,224 5,373 (3%)
(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,
2006, 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 weakened relative to major international
currencies in the three months ended May 31, 2007 compared with the
corresponding prior year period, contributing 4 percentage points of
revenue, 3 percentage points of operating expense and 5 percentage
points of operating income growth.
ORACLE CORPORATION
Q4 FISCAL 2007 QUARTER TO DATE FINANCIAL RESULTS
NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (1)
(in millions, except per share data)
Three Months Ended May 31, % Increase
(Decrease)
in US $
---------------------------------------------
2007 2007 2006 2006
GAAP Adj. Non- GAAP Adj. Non- GAAP Non-
GAAP GAAP GAAP
-----------------------------------------------------
TOTAL
REVENUES (2) $5,828 $55 $5,883 $4,851 $86 $4,937 20% 19%
TOTAL
SOFTWARE
REVENUES (2) $4,753 $55 $4,808 $3,994 $86 $4,080 19% 18%
New
software
licenses 2,481 - 2,481 2,121 - 2,121 17% 17%
Software
license
updates and
product
support (2) 2,272 55 2,327 1,873 86 1,959 21% 19%
TOTAL OPERATING
EXPENSES $3,547 $(378) $3,169 $2,994 $(257) $2,737 18% 16%
Stock-based
compensation
(3) 53 (53) - 8 (8) - 585% 0%
Amortization
of intangible
assets (4) 255 (255) - 185 (185) - 38% 0%
Acquisition
related 74 (74) - 16 (16) - 378% 0%
Restructuring (4) 4 - 48 (48) - (109%) 0%
OPERATING
INCOME $2,281 $433 $2,714 $1,857 $343 $2,200 23% 23%
OPERATING
MARGIN % 39% 46% 38% 45% 1% 2%
INCOME TAX
EFFECTS ON
ABOVE
ADJUSTMENTS
(5) $660 $127 $787 $578 $106 $684 14% 15%
NET INCOME $1,604 $306 $1,910 $1,300 $237 $1,537 23% 24%
DILUTED
EARNINGS
PER SHARE (6) $0.31 $0.37 $0.24 $0.29 27% 28%
DILUTED
WEIGHTED
AVERAGE
COMMON
SHARES
OUTSTANDING
(6) 5,224 6 5,230 5,373 - 5,373 (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) As of May 31, 2007, approximately $120 million in estimated revenues
related to assumed support contracts will not be recognized in
fiscal 2008 due to business combination accounting rules.
(3) Stock-based compensation is included in the following GAAP operating
expense categories:
Three months ended Three months ended
May 31, 2007 May 31, 2006
----------------------------- -----------------------
GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP
----------------------------- -----------------------
Sales and marketing $11 $(11) $- $2 $(2) $-
Software license
updates and
product support 3 (3) - 1 (1) -
Cost of services 4 (4) - 3 (3) -
Research and
development 21 (21) - 2 (2) -
General and
administrative 14 (14) - - - -
----- ----- ----- ----- ----- -----
Subtotal 53 (53) - 8 (8) -
----- ----- ----- ----- ----- -----
Acquisition related 8 (8) - 8 (8) -
----- ----- ----- ----- ----- -----
Total stock-based
compensation $61 $(61) $- $16 $(16) $-
----- ----- ----- ----- ----- -----
Stock-based compensation expense in the fourth quarter of fiscal 2007 is
recognized based upon fair value pursuant to FASB Statement 123R.
Stock-based compensation expense in the fourth quarter of fiscal 2006 is
recognized based upon intrinsic value pursuant to APB Opinion 25 and
pertains only to unvested stock options assumed from acquisitions.
(4) Estimated future annual amortization expense related to intangible
assets as of May 31, 2007 is as follows:
2008 $1,114
2009 1,101
2010 976
2011 756
2012 620
Thereafter 1,397
-----
Total $5,964
======
(5) The income tax provision was calculated reflecting an effective tax
rate of 29.2% and 30.8% in the fourth quarter of fiscal 2007 and
2006, respectively.
(6) Non-GAAP diluted earnings per share and non-GAAP diluted weighted
average common shares outstanding were calculated excluding the
effects of adopting Statement 123R.
ORACLE CORPORATION
FISCAL 2007 YEAR TO DATE FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
Year Ended May 31, % Increase % Increase
---------------------------- (Decrease) (Decrease)
% of % of in US in Constant
2007 Revenues 2006 Revenues $ Currency(1)
--------------------------------------------------
REVENUES
New software
licenses $5,882 33% $4,905 34% 20% 17%
Software license
updates and
product support 8,329 46% 6,636 46% 25% 22%
-------------------------------
Software Revenues 14,211 79% 11,541 80% 23% 20%
-------------------------------
Services 3,785 21% 2,839 20% 33% 29%
-------------------------------
Total Revenues 17,996 100% 14,380 100% 25% 22%
-------------------------------
OPERATING EXPENSES
Sales and marketing 3,907 22% 3,177 22% 23% 20%
Software license
updates and
product support 842 5% 719 5% 17% 14%
Cost of services 3,349 19% 2,516 17% 33% 29%
Research and
development 2,195 12% 1,872 13% 17% 16%
General and
administrative 692 4% 555 4% 25% 22%
Amortization of
intangible
assets 878 5% 583 4% 51% 51%
Acquisition related (2) 140 1% 137 1% 1% 1%
Restructuring 19 0% 85 1% (78%) (78%)
-------------------------------
Total Operating
Expenses 12,022 67% 9,644 67% 25% 22%
-------------------------------
OPERATING INCOME 5,974 33% 4,736 33% 26% 21%
Interest expense (343) (2%) (169) (1%) 103% 104%
Non-operating
income, net 355 2% 243 1% 46% 45%
-------------------------------
INCOME BEFORE PROVISION
FOR INCOME TAXES 5,986 33% 4,810 33% 24% 19%
-------------------------------
Provision for
income taxes 1,712 10% 1,429 9% 20% 20%
-------------------------------
NET INCOME $4,274 24% $3,381 24% 26% 19%
===============================
EARNINGS PER SHARE:
Basic $0.83 $0.65 27%
Diluted $0.81 $0.64 27%
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING:
Basic 5,170 5,196 (1%)
Diluted 5,269 5,287 0%
(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,
2006, 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 weakened relative to major international
currencies in for the year ended May 31, 2007 compared with the
corresponding prior year period, contributing 3 percentage points of
revenue, 3 percentage points of operating expense and 5 percentage
points of operating income growth.
(2) Acquisition related costs include a benefit of $51.5 million for the
year ended May 31, 2007 related to the settlement of a
pre-acquisition lawsuit against PeopleSoft, Inc. filed on behalf of
the U.S. government. Please see Appendix A for further discussion.
ORACLE CORPORATION
FISCAL 2007 YEAR TO DATE FINANCIAL RESULTS
NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (1)
(in millions, except per share data)
Year Ended May 31, % Increase
(Decrease)
in US $
----------------------------------------------------------
2007 2007 2006 2006
GAAP Adj. Non- GAAP Adj. Non- GAAP Non-
GAAP GAAP GAAP
----------------------------------------------------------
TOTAL
REVENUES(2) $17,996 $212 $18,208 $14,380 $391 $14,771 25% 23%
TOTAL
SOFTWARE
REVENUES(2) $14,211 $212 $14,423 $11,541 $391 $11,932 23% 21%
New software
licenses 5,882 - 5,882 4,905 - 4,905 20% 20%
Software
license
updates
and product
support (2) 8,329 212 8,541 6,636 391 7,027 25% 22%
TOTAL
OPERATING
EXPENSES $12,022 $(1,235) $10,787 $9,644 $(836) $8,808 25% 22%
Stock-based
compensation
(3) 198 (198) - 31 (31) - 532% 0%
Amortization
of intangible
assets (4) 878 (878) - 583 (583) - 51% 0%
Acquisition
related 140 (140) - 137 (137) - 1% 0%
Restructuring 19 (19) - 85 (85) - (78%) 0%
OPERATING
INCOME $5,974 $1,447 $7,421 $4,736 $1,227 $5,963 26% 24%
OPERATING
MARGIN % 33% 41% 33% 40% 0% 0%
INCOME TAX
EFFECTS ON
ABOVE
ADJUSTMENTS
(5) $1,712 $414 $2,126 $1,429 $362 $1,791 20% 19%
NET INCOME $4,274 $1,033 $5,307 $3,381 $865 $4,246 26% 25%
DILUTED
EARNINGS
PER SHARE (6) $0.81 $1.01 $0.64 $0.80 27% 25%
DILUTED
WEIGHTED
AVERAGE
COMMON SHARES
OUTSTANDING
(6) 5,269 8 5,277 5,287 - 5,287 (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) As of May 31, 2007, approximately $120 million in estimated revenues
related to assumed support contracts will not be recognized in
fiscal 2008 due to business combination accounting rules.
(3) Stock-based compensation is included in the following GAAP operating
expense categories:
Year ended Year ended
May 31, 2007 May 31, 2006
----------------------------- -----------------------
GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP
----------------------------- -----------------------
Sales and marketing $38 $(38) $- $8 $(8) $-
Software license
updates and
product support 11 (11) - 3 (3) -
Cost of services 15 (15) - 7 (7) -
Research and
development 85 (85) - 13 (13) -
General and
administrative 49 (49) - - - -
----- ----- ----- ----- ----- -----
Subtotal 198 (198) - 31 (31) -
----- ----- ----- ----- ----- -----
Acquisition related 9 (9) - 18 (18) -
----- ----- ----- ----- ----- -----
Total stock-based
compensation $207 (207) $- $49 $(49) $-
----- ----- ----- ----- ----- -----
Stock-based compensation expense in the year ended May 31, 2007 is
recognized based upon fair value pursuant to FASB Statement 123R. Stock-
based compensation expense in the year ended May 31, 2006 is recognized
based upon intrinsic value pursuant to APB Opinion 25 and pertains only
to unvested stock options assumed from acquisitions.
(4) Estimated future annual amortization expense related to intangible
assets as of May 31, 2007 is as follows:
2008 $1,114
2009 1,101
2010 976
2011 756
2012 620
Thereafter 1,397
------
Total $5,964
======
(5) The income tax provision was calculated reflecting an effective tax
rate of 28.6% and 29.7% in the year ended May 31, 2007 and 2006,
respectively.
(6) Non-GAAP diluted earnings per share and non-GAAP diluted weighted
average common shares outstanding were calculated excluding the
effects of adopting Statement 123R.
ORACLE CORPORATION
FISCAL 2007 FINANCIAL RESULTS
CONDENSED CONSOLIDATED BALANCE SHEETS (1)
($ in millions)
May 31, May 31,
2007 2006
------ ------
ASSETS
Current Assets:
Cash and cash equivalents $6,218 $6,659
Marketable securities 802 946
Trade receivables, net 4,074 3,022
Deferred tax assets 968 714
Other current assets 821 633
------ ------
Total Current Assets 12,883 11,974
Non-Current Assets:
Property, net 1,603 1,391
Intangible assets, net 5,964 4,528
Goodwill 13,479 9,809
Other assets 643 1,327
------ ------
Total Non-Current Assets 21,689 17,055
------ ------
TOTAL ASSETS $34,572 $29,029
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Short-term borrowings and
current portion of long-term
debt $1,358 $159
Accounts payable 315 268
Income taxes payable 1,237 810
Accrued compensation and
related benefits 1,349 1,172
Accrued restructuring 201 412
Deferred revenues 3,492 2,830
Other current liabilities 1,435 1,279
------ ------
Total Current Liabilities 9,387 6,930
Non-Current Liabilities:
Long-term debt 6,235 5,735
Deferred tax liabilities 1,121 564
Accrued restructuring 258 273
Deferred revenues 93 114
Minority interests 316 202
Other long-term liabilities 243 199
------ ------
Total Non-Current
Liabilities 8,266 7,087
Stockholders' Equity 16,919 15,012
------ ------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $34,572 $29,029
======= =======
(1) Certain prior period balances have been reclassified to
conform to the current period presentation.
ORACLE CORPORATION
FISCAL 2007 YEAR TO DATE FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (1)
($ in millions)
Year Ended May 31,
2007 2006
------ ------
Cash Flows From Operating Activities:
Net income $4,274 $3,381
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 249 223
Amortization of intangible assets 878 583
Provision for trade receivable
allowances 244 241
Deferred income taxes 56 (40)
Minority interests in income 71 41
Stock-based compensation 207 49
Tax benefit on the exercise of stock
options 338 162
Excess tax benefits from stock-based
compensation (2) (259) -
In-process research and development 151 78
Net investment gains and earnings
related to equity investments (22) (39)
Changes in operating assets and
liabilities, net of effects from
acquisitions:
Increase in trade receivables (723) (355)
(Increase) decrease in prepaid
expenses and other assets (153) 14
Increase (decrease) in accounts
payable and other liabilities (345) 23
Increase (decrease) in income taxes
payable 167 (98)
Increase in deferred revenues 387 278
------ ------
Net cash provided by operating activities 5,520 4,541
------ ------
Cash Flows From Investing
Activities:
Purchases of marketable securities (5,383) (2,128)
Proceeds from maturities and sale of
marketable securities 5,756 3,676
Acquisitions, net of cash acquired (5,005) (3,953)
Purchases of equity and other
investments (22) (858)
Capital expenditures (319) (236)
Proceeds from sales of property 2 140
------ ------
Net cash used for investing activities (4,971) (3,359)
------ ------
Cash Flows From Financing
Activities:
Payments for repurchases of common
stock (3) (3,937) (2,067)
Proceeds from issuance of common
stock 924 632
Proceeds from borrowings, net of
financing costs 4,079 12,636
Payments of debt (2,418) (9,635)
Excess tax benefits from stock-based
compensation (2) 259 -
Distributions to minority interests (46) (39)
------ ------
Net cash (used for) provided by
financing activities (1,139) 1,527
------ ------
Effect of exchange rate changes on
cash and cash equivalents 149 56
------ ------
Net (decrease) increase in cash and
cash equivalents (441) 2,765
------ ------
Cash and cash equivalents at
beginning of period 6,659 3,894
------ ------
Cash and cash equivalents at end of
period $6,218 $6,659
------ ------
(1) Certain prior period balances have been reclassified to conform to
the current period presentation.
(2) Excess tax benefits received from stock-based compensation
arrangements are presented as financing cash inflows rather than
operating cash inflows prospectively from June 1, 2006, which is our
adoption date of Statement 123R. Prior period reclassifications are
not allowed.
(3) We repurchased 234 million shares for approximately $4 billion
during the year ended May 31, 2007 (including 2.4 million shares for
$47 million that were repurchased but not settled as of
May 31, 2007).
ORACLE CORPORATION
FISCAL 2007 FINANCIAL RESULTS
FREE CASH FLOW - TRAILING 4-QUARTERS (1)
($ in millions)
--------------------------------------------------------------------
Fiscal 2006 Fiscal 2007 (2)
-------------------------------------------------------
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
--------------------------------------------------------------------
GAAP Operating
Cash Flow $3,596 $3,509 $3,857 $4,541 $4,706 $4,651 $4,984 $5,520
Capital
Expenditures
(3) (206) (182) (199) (236) (233) (256) (258) (319)
-------------------------------------------------------
Free Cash
Flow $3,390 $3,327 $3,658 $4,305 $4,473 $4,395 $4,726 $5,201
=======================================================
% Growth over
prior year 6% 4% 8% 28% 32% 32% 29% 21%
--------------------------------------------------------------------
GAAP Net
Income $2,896 $2,878 $3,103 $3,381 $3,532 $3,702 $3,970 $4,274
Free Cash Flow
as a % of Net
Income 117% 116% 118% 127% 127% 119% 119% 122%
--------------------------------------------------------------------
(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) We adopted FASB Statement 123R on June 1, 2006 under the modified
prospective method. Under the modified prospective method, prior
period reclassifications are not allowed. Excess tax benefits
received from stock-based compensation arrangements are presented as
financing cash inflows rather than operating cash inflows
prospectively from June 1, 2006. Excess tax benefits reclassified
from GAAP Operating Cash Flow were $259 million for the year ended
May 31, 2007.
(3) Represents capital expenditures as reported in cash flows from
investing activities on our cash flow statements presented in
accordance with GAAP.
ORACLE CORPORATION
FISCAL 2007 FINANCIAL RESULTS
SUPPLEMENTAL ANALYSIS OF GAAP REVENUES AND HEADCOUNT (1)
(in millions, except headcount data)
--------------------------------------------------------------------
Fiscal 2006
---------------------------------------
Q1 Q2 Q3 Q4 TOTAL
--------------------------------------------------------------------
REVENUES
--------
New software licenses $629 $1,058 $1,096 $2,121 $4,905
Software license updates
and product support 1,502 1,559 1,703 1,873 6,636
---------------------------------------
Software Revenues 2,131 2,617 2,799 3,994 11,541
Consulting 481 506 501 632 2,120
On Demand 84 87 96 130 397
Education 72 82 74 95 322
---------------------------------------
Services Revenues 637 675 671 857 2,839
---------------------------------------
Total Revenues $2,768 $3,292 $3,470 $4,851 $14,380
=======================================
AS REPORTED REVENUE GROWTH
RATES
New software licenses 12% 9% 16% 32% 20%
Software license updates
and product support 28% 25% 23% 24% 25%
Software Revenues 23% 18% 20% 28% 23%
Consulting 36% 28% 7% 7% 17%
On Demand 18% 20% 26% 62% 32%
Education 42% 25% 9% 11% 20%
Services Revenues 34% 26% 9% 13% 19%
Total Revenues 25% 19% 18% 25% 22%
CONSTANT CURRENCY GROWTH
RATES
New software licenses 10% 12% 20% 32% 21%
Software license updates
and product support 26% 27% 27% 25% 26%
Software Revenues 21% 20% 24% 28% 24%
Consulting 34% 31% 10% 8% 19%
On Demand 17% 22% 29% 63% 33%
Education 40% 27% 13% 12% 21%
Services Revenues 32% 29% 13% 14% 21%
Total Revenues 23% 22% 22% 26% 23%
---------------------------------------
GEOGRAPHIC REVENUES
-------------------
REVENUES
Americas $1,475 $1,733 $1,848 $2,595 $7,652
Europe, Middle East &
Africa 883 1,090 1,164 1,572 4,708
Asia Pacific 410 469 458 684 2,020
---------------------------------------
Total Revenues $2,768 $3,292 $3,470 $4,851 $14,380
=======================================
HEADCOUNT (2)
-------------
GEOGRAPHIC AREA
Americas 24,221 24,142 26,503 26,439
Europe, Middle East &
Africa 12,389 12,532 13,736 13,812
Asia Pacific 12,907 14,480 15,342 15,882
------------------------------
Total Company 49,516 51,154 55,582 56,133
==============================
(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 acquisitions and the
consolidation of i-flex beginning in the first quarter of fiscal
2007.
ORACLE CORPORATION
FISCAL 2007 FINANCIAL RESULTS
SUPPLEMENTAL ANALYSIS OF GAAP REVENUES AND HEADCOUNT (1)
(in millions, except headcount data)
--------------------------------------------------------------------
Fiscal 2007
---------------------------------------
Q1 Q2 Q3 Q4 TOTAL
--------------------------------------------------------------------
REVENUES
--------
New software licenses $804 $1,207 $1,390 $2,481 $5,882
Software license updates
and product support 1,941 2,007 2,108 2,272 8,329
---------------------------------------
Software Revenues 2,745 3,214 3,498 4,753 14,211
Consulting 640 716 694 819 2,869
On Demand 125 140 142 151 557
Education 81 93 80 105 359
---------------------------------------
Services Revenues 846 949 916 1,075 3,785
---------------------------------------
Total Revenues $3,591 $4,163 $4,414 $5,828 $17,996
=======================================
AS REPORTED REVENUE GROWTH
RATES
New software licenses 28% 14% 27% 17% 20%
Software license updates
and product support 29% 29% 24% 21% 25%
Software Revenues 29% 23% 25% 19% 23%
Consulting 33% 42% 38% 30% 35%
On Demand 49% 61% 48% 16% 40%
Education 13% 14% 8% 10% 11%
Services Revenues 33% 41% 36% 26% 33%
Total Revenues 30% 26% 27% 20% 25%
CONSTANT CURRENCY GROWTH
RATES
New software licenses 26% 10% 23% 13% 17%
Software license updates
and product support 27% 25% 20% 17% 22%
Software Revenues 27% 19% 21% 15% 20%
Consulting 31% 37% 34% 24% 31%
On Demand 47% 56% 43% 12% 37%
Education 11% 11% 4% 6% 8%
Services Revenues 31% 36% 32% 20% 29%
Total Revenues 28% 23% 23% 16% 22%
---------------------------------------
GEOGRAPHIC REVENUES
-------------------
REVENUES
Americas $1,956 $2,170 $2,315 $3,018 $9,460
Europe, Middle East &
Africa 1,140 1,422 1,484 1,992 6,037
Asia Pacific 495 571 615 818 2,499
---------------------------------------
Total Revenues $3,591 $4,163 $4,414 $5,828 $17,996
=======================================
HEADCOUNT (2)
-------------
GEOGRAPHIC AREA
Americas 26,798 27,444 27,874 29,830
Europe, Middle East &
Africa 14,199 14,640 14,758 15,680
Asia Pacific 24,129 26,350 27,850 29,164
------------------------------
Total Company 65,126 68,434 70,481 74,674
==============================
(1) The sum of the quarterly financial information may vary from
year-to-date financial information due to rounding.
Headcount has increased primarily due to acquisitions and the
(2) consolidation of i-flex beginning in the first quarter of fiscal
2007.
ORACLE CORPORATION
FISCAL 2007 FINANCIAL RESULTS
SUPPLEMENTAL TOTAL SOFTWARE PRODUCT REVENUE ANALYSIS (1)
($ in millions)
----------------------------------------------------------------------
Fiscal 2006
--------------------------------------
Q1 Q2 Q3 Q4 TOTAL
----------------------------------------------------------------------
APPLICATIONS REVENUES
New software licenses $127 $266 $269 $641 $1,303
Software license updates and
product support 466 502 608 676 2,252
--------------------------------------
Software Revenues $593 $768 $877 $1,317 $3,555
======================================
AS REPORTED GROWTH RATES
New software licenses 84% 24% 77% 83% 66%
Software license updates and
product support 96% 98% 73% 52% 75%
Software Revenues 93% 64% 74% 66% 71%
CONSTANT CURRENCY GROWTH
RATES
New software licenses 82% 27% 82% 83% 67%
Software license updates and
product support 93% 101% 79% 53% 77%
Software Revenues 91% 67% 80% 66% 72%
--------------------------------------
DATABASE & MIDDLEWARE
REVENUES
New software licenses $502 $792 $827 $1,480 $3,602
Software license updates and
product support 1,036 1,057 1,095 1,197 4,384
--------------------------------------
Software Revenues $1,538 $1,849 $1,922 $2,677 $7,986
======================================
AS REPORTED GROWTH RATES
New software licenses 2% 5% 4% 18% 9%
Software license updates and
product support 10% 6% 6% 12% 8%
Software Revenues 7% 5% 5% 15% 9%
CONSTANT CURRENCY GROWTH
RATES
New software licenses 0% 8% 8% 18% 10%
Software license updates and
product support 9% 8% 9% 13% 9%
Software Revenues 6% 8% 9% 15% 10%
--------------------------------------
(1) The sum of the quarterly financial information may vary from
year-to-date financial information due to rounding.
ORACLE CORPORATION
FISCAL 2007 FINANCIAL RESULTS
SUPPLEMENTAL TOTAL SOFTWARE PRODUCT REVENUE ANALYSIS (1)
($ in millions)
----------------------------------------------------------------------
Fiscal 2007
--------------------------------------
Q1 Q2 Q3 Q4 TOTAL
----------------------------------------------------------------------
APPLICATIONS REVENUES
New software licenses $228 $340 $423 $726 $1,716
Software license updates and
product support 703 728 769 832 3,032
--------------------------------------
Software Revenues $931 $1,068 $1,192 $1,558 $4,748
======================================
AS REPORTED GROWTH RATES
New software licenses 80% 28% 57% 13% 32%
Software license updates and
product support 51% 45% 27% 23% 35%
Software Revenues 57% 39% 36% 18% 34%
CONSTANT CURRENCY GROWTH
RATES
New software licenses 78% 25% 52% 10% 29%
Software license updates and
product support 49% 41% 23% 19% 32%
Software Revenues 55% 35% 32% 15% 31%
--------------------------------------
DATABASE & MIDDLEWARE
REVENUES
New software licenses $576 $867 $967 $1,755 $4,166
Software license updates and
product support 1,238 1,279 1,339 1,440 5,297
--------------------------------------
Software Revenues $1,814 $2,146 $2,306 $3,195 $9,463
AS REPORTED GROWTH RATES
New software licenses 15% 9% 17% 18% 16%
Software license updates and
product support 19% 21% 22% 20% 21%
Software Revenues 18% 16% 20% 19% 18%
CONSTANT CURRENCY GROWTH
RATES
New software licenses 13% 5% 13% 15% 12%
Software license updates and
product support 18% 18% 19% 17% 18%
Software Revenues 16% 13% 16% 16% 15%
(1) The sum of the quarterly financial information may vary from
year-to-date financial information due to rounding.
ORACLE CORPORATION
FISCAL 2007 FINANCIAL RESULTS
SUPPLEMENTAL GEOGRAPHIC NEW SOFTWARE LICENSE REVENUE ANALYSIS (1) (2)
($ in millions)
----------------------------------------------------------------------
Fiscal 2006
--------------------------------------
Q1 Q2 Q3 Q4 TOTAL
----------------------------------------------------------------------
AMERICAS
Database & Middleware $194 $327 $334 $662 $1,518
Applications 75 163 148 395 782
--------------------------------------
New Software License
Revenues $269 $490 $482 $1,057 $2,300
======================================
AS REPORTED GROWTH RATES
Database & Middleware (2%) 15% 16% 22% 16%
Applications 150% 41% 61% 73% 67%
New Software License
Revenues 19% 22% 27% 37% 29%
CONSTANT CURRENCY GROWTH RATES
Database & Middleware (4%) 13% 14% 21% 14%
Applications 148% 40% 60% 72% 66%
New Software License
Revenues 17% 21% 25% 36% 28%
--------------------------------------
EUROPE / MIDDLE EAST / AFRICA
Database & Middleware $164 $282 $316 $515 $1,278
Applications 38 75 96 158 366
--------------------------------------
New Software License
Revenues $202 $357 $412 $673 $1,644
======================================
AS REPORTED GROWTH RATES
Database & Middleware 4% (7%) (3%) 7% 1%
Applications 38% (6%) 119% 108% 61%
New Software License
Revenues 9% (7%) 12% 20% 10%
CONSTANT CURRENCY GROWTH RATES
Database & Middleware 3% 0% 6% 7% 5%
Applications 36% 1% 138% 108% 67%
New Software License
Revenues 8% 0% 22% 21% 14%
--------------------------------------
ASIA PACIFIC
Database & Middleware $134 $176 $170 $292 $771
Applications 14 28 25 88 155
--------------------------------------
New Software License
Revenues $148 $203 $195 $380 $926
======================================
AS REPORTED GROWTH RATES
Database & Middleware 2% 9% 1% 31% 13%
Applications 28% 48% 52% 94% 69%
New Software License
Revenues 4% 13% 5% 42% 20%
CONSTANT CURRENCY GROWTH RATES
Database & Middleware 0% 14% 6% 34% 16%
Applications 23% 50% 60% 96% 71%
New Software License
Revenues 2% 18% 11% 45% 23%
--------------------------------------
TOTAL COMPANY
Database & Middleware $492 $785 $820 $1,469 $3,567
Applications 127 266 269 641 1,303
--------------------------------------
New Software License
Revenues (2) $619 $1,051 $1,089 $2,110 $4,870
======================================
AS REPORTED GROWTH RATES
Database & Middleware 1% 5% 5% 18% 9%
Applications 84% 24% 77% 83% 66%
New Software License
Revenues 12% 9% 17% 32% 20%
CONSTANT CURRENCY GROWTH RATES
Database & Middleware 0% 8% 9% 18% 10%
Applications 82% 27% 82% 83% 67%
New Software License
Revenues 10% 12% 21% 32% 21%
--------------------------------------
(1) The sum of the quarterly financial information may vary from
year-to-date financial information due to rounding.
(2) New Software License Revenues presented exclude documentation
and miscellaneous revenues.
ORACLE CORPORATION
FISCAL 2007 FINANCIAL RESULTS
SUPPLEMENTAL GEOGRAPHIC NEW SOFTWARE LICENSE REVENUE ANALYSIS (1) (2)
($ in millions)
----------------------------------------------------------------------
Fiscal 2007
--------------------------------------
Q1 Q2 Q3 Q4 TOTAL
----------------------------------------------------------------------
AMERICAS
Database & Middleware $232 $333 $383 $795 $1,743
Applications 126 195 250 415 986
--------------------------------------
New Software License
Revenues $358 $528 $633 $1,210 $2,729
======================================
AS REPORTED GROWTH RATES
Database & Middleware 19% 2% 15% 20% 15%
Applications 69% 19% 69% 5% 26%
New Software License
Revenues 33% 8% 31% 14% 19%
CONSTANT CURRENCY GROWTH RATES
Database & Middleware 18% 2% 15% 19% 14%
Applications 69% 19% 69% 4% 26%
New Software License
Revenues 32% 7% 31% 13% 18%
--------------------------------------
EUROPE / MIDDLE EAST / AFRICA
Database & Middleware $184 $341 $363 $619 $1,507
Applications 69 101 124 224 518
--------------------------------------
New Software License
Revenues $253 $442 $487 $843 $2,025
======================================
AS REPORTED GROWTH RATES
Database & Middleware 12% 21% 15% 20% 18%
Applications 83% 35% 29% 42% 42%
New Software License
Revenues 25% 24% 18% 25% 23%
CONSTANT CURRENCY GROWTH RATES
Database & Middleware 8% 11% 6% 12% 10%
Applications 78% 25% 19% 34% 33%
New Software License
Revenues 21% 14% 9% 18% 15%
--------------------------------------
ASIA PACIFIC
Database & Middleware $149 $185 $213 $322 $869
Applications 33 44 49 87 212
--------------------------------------
New Software License
Revenues $182 $229 $262 $409 $1,081
======================================
AS REPORTED GROWTH RATES
Database & Middleware 12% 5% 26% 10% 13%
Applications 126% 58% 89% (1%) 36%
New Software License
Revenues 23% 12% 34% 8% 17%
CONSTANT CURRENCY GROWTH RATES
Database & Middleware 13% 2% 24% 7% 11%
Applications 124% 53% 83% (4%) 33%
New Software License
Revenues 24% 9% 32% 5% 15%
--------------------------------------
TOTAL COMPANY
Database & Middleware $565 $859 $959 $1,736 $4,119
Applications 228 340 423 726 1,716
--------------------------------------
New Software License
Revenues (2) $793 $1,199 $1,382 $2,462 $5,835
======================================
AS REPORTED GROWTH RATES
Database & Middleware 15% 9% 17% 18% 15%
Applications 80% 28% 57% 13% 32%
New Software License
Revenues 28% 14% 27% 17% 20%
CONSTANT CURRENCY GROWTH RATES
Database & Middleware 13% 5% 13% 14% 12%
Applications 78% 25% 52% 10% 29%
New Software License
Revenues 27% 10% 23% 13% 16%
--------------------------------------
(1) The sum of the quarterly financial information may vary from
year-to-date financial information due to rounding.
(2) New Software License Revenues presented exclude documentation
and miscellaneous revenues.
APPENDIX A
ORACLE CORPORATION
FISCAL 2007 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 table, 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 acquisitions 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 entities. 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 adopted FASB Statement No.
123R,
Share-Based Payments, on June 1, 2006 under the modified prospective
method.
Statement 123R requires us to record non-cash operating expenses
associated
with stock option awards at their estimated fair values. Prior to our
Statement 123R adoption, we were required to record stock-based
compensation
expenses at intrinsic values, which were substantially related to
options
assumed from acquisitions. In accordance with the modified prospective
method,
our financial statements for prior periods have not been restated to
reflect,
and do not include, the changes in methodology to expense options at
fair
values in accordance with Statement 123R. 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 expenses: We have excluded the
effect
of amortization of intangibles from our non-GAAP operating expenses and
net
income. Amortization of intangible assets expense 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 expenses
will recur
in future periods.
-- Acquisition related charges and restructuring expenses: We
incurred
significant expenses in connection with acquisitions, which we would
not have
otherwise incurred in the periods presented. Acquisition related
charges
primarily consist of in-process research and development expenses,
integration-related professional services, stock-based compensation
expenses
(in addition to the stock-based compensation expenses described above)
and
personnel related expenses for transitional employees. Stock-based
compensation expenses included in acquisition related charges resulted
from
unvested options assumed in acquisitions whose vesting was fully
accelerated
upon termination of the employees pursuant to the terms of the options.
Restructuring expenses consist of Oracle employee severance and Oracle
duplicate facility closures in connection with acquisitions. We believe
it is
useful for investors to understand the effect of these expenses on our
cost
structure. Although acquisition related charges and restructuring costs
are
not recurring with respect to past acquisitions, we will incur these
expenses
in connection with future acquisitions.
For the year ended May 31, 2007, acquisition related charges also
included
a benefit related to the settlement of a lawsuit filed against
PeopleSoft,
Inc. on behalf of the U.S. government. This lawsuit was filed in
October 2003,
prior to our acquisition of PeopleSoft. The lawsuit alleged PeopleSoft
made
defective pricing disclosures to the General Services Administration.
This
lawsuit represented a pre-acquisition contingency that we identified
and
assumed in connection with the PeopleSoft acquisition. On October 10,
2006, we
agreed to pay the U.S. government $98.5 million to settle this lawsuit.
Business combination accounting standards require that after the end of
the
purchase price allocation period, any adjustment that results from a
pre-
acquisition contingency should be included as an element of net income
in the
period of settlement, versus an adjustment to the original purchase
price
allocation. Since the purchase price allocation period for PeopleSoft
ended
in the third quarter of our fiscal year 2006, the favorable difference
of
$51.5 million between the estimated exposure recorded for this lawsuit
during
the purchase price allocation period and the actual settlement amount
has been
included in our consolidated statement of operations for the year ended
May
31, 2007 as a component of acquisition related charges.
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