|
REDWOOD SHORES, Calif.,
20-SEP-2007 01:19 PM
Oracle Corporation (NASDAQ: ORCL) today announced fiscal 2008 Q1 GAAP earnings per share were up 28% to $0.16, compared to the same quarter last year. First quarter total GAAP revenues were up 26% to $4.5 billion, while quarterly GAAP net income was up 25% to $840 million. Total GAAP software revenues were up 26% to $3.5 billion with GAAP new software license revenues up 35% to $1.1 billion. Database and middleware new license revenues were up 23% and applications new license revenues were up 65%. Services revenues were up 25% to $1.1 billion, compared to the same quarter last year.
First quarter non-GAAP earnings per share were up 27% to $0.22, and non-GAAP net income was up 25% to $1.2 billion, compared to the same quarter last year.
"We reported new software license revenues up 35%, the strongest growth of any quarter in ten years," said Oracle President and CFO, Safra Catz, "and that software sales growth is translating nicely into EPS growth. We've now completed thirteen quarters of our five year EPS growth plan of 20% per year, and we are delivering earnings growth well ahead of that target."
"We continue to take applications market share from SAP," said Oracle President, Charles Phillips. "In Q1 Oracle's applications new license sales grew 65% compared to SAP's new license sales growth rate of 18% in their most recently completed quarter. We like our growth strategy of expanding into high-end industry specific vertical software as opposed to SAP's growth strategy of moving down market to sell software to small companies."
"Our Q1 database and middleware new license sales growth rate of 23% was the highest in seven years," said CEO, Larry Ellison. "Oracle passed IBM to become the number one database company a long time ago. If we continue to grow our middleware software business at the same rate we grew it this quarter, Oracle will challenge IBM for the number one position in middleware by the end of this year."
Q1 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 (NASDAQ GS: ORCL) is the world's largest enterprise software company. For more information about Oracle, please visit our Web site at http://www.oracle.com
# # #
Trademarks
Oracle is a registered trademark of Oracle Corporation and/or its affiliates. Other names may be trademarks of their respective owners.
ORACLE CORPORATION
Q1 FISCAL 2008 FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
Three Months Ended August 31, % Increase % Increase
----------------------------- (Decrease) (Decrease)
% of % of in US in Constant
2007 Revenues 2006 Revenues $ Currency(1)
------------------------------------------------------
REVENUES
New software
licenses $1,087 24% $804 22% 35% 32%
Software license
updates and
product support 2,383 53% 1,941 54% 23% 19%
---------------------------------
Software
Revenues 3,470 77% 2,745 76% 26% 23%
---------------------------------
Services 1,059 23% 846 24% 25% 21%
---------------------------------
Total Revenues 4,529 100% 3,591 100% 26% 22%
---------------------------------
OPERATING EXPENSES
Sales and
marketing 974 22% 750 21% 30% 26%
Software license
updates and
product support 228 5% 200 6% 14% 10%
Cost of services 931 21% 780 22% 19% 15%
Research and
development 652 14% 506 14% 29% 26%
General and
administrative 195 4% 157 4% 24% 20%
Amortization of
intangible assets 285 6% 198 6% 44% 44%
Acquisition related 47 1% 48 1% (3%) (3%)
Restructuring - 0% 9 0% (100%) (100%)
---------------------------------
Total Operating
Expenses 3,312 73% 2,648 74% 25% 21%
---------------------------------
OPERATING INCOME 1,217 27% 943 26% 29% 24%
Interest expense (94) (2%) (83) (2%) 12% 12%
Non-operating
income, net 77 2% 102 3% (24%) (26%)
---------------------------------
INCOME BEFORE
PROVISION FOR
INCOME TAXES 1,200 27% 962 27% 25% 20%
Provision for
income taxes 360 8% 292 8% 23% 23%
---------------------------------
NET INCOME $840 19% $670 19% 25% 19%
=================================
EARNINGS PER SHARE:
Basic $0.16 $0.13 28%
Diluted $0.16 $0.13 28%
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING:
Basic 5,110 5,217 (2%)
Diluted 5,217 5,307 (2%)
(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,
2007, 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 August 31, 2007 compared with
the corresponding prior year period, contributing 4 percentage
points of revenue, 4 percentage points of operating expense and 5
percentage points of operating income growth.
ORACLE CORPORATION
Q1 FISCAL 2008 FINANCIAL RESULTS
NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (1)
(in millions, except per share data)
% Increase
(Decrease)
Three Months Ended August 31, in US $
-----------------------------------------------------------
2007 2007 2006 2006
GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP GAAP Non-GAAP
-----------------------------------------------------------
TOTAL
REVENUES (2) $4,529 $64 $4,593 $3,591 $70 $3,661 26% 25%
TOTAL SOFTWARE
REVENUES (2) $3,470 $64 $3,534 $2,745 $70 $2,815 26% 26%
New software
licenses 1,087 - 1,087 804 - 804 35% 35%
Software
license
updates and
product
support (2) 2,383 64 2,447 1,941 70 2,011 23% 22%
TOTAL OPERATING
EXPENSES $3,312 $(401) $2,911 $2,648 $(305) $2,343 25% 24%
Stock-based
compensation
(3) 69 (69) - 50 (50) - 36%
Amortization
of intangible
assets (4) 285 (285) - 198 (198) - 44%
Acquisition
related 47 (47) - 48 (48) - (3%)
Restructuring - - - 9 (9) - (100%)
OPERATING
INCOME $1,217 $465 $1,682 $943 $375 $1,318 29% 28%
OPERATING
MARGIN % 27% 37% 26% 36% 1% 1%
INCOME TAX
EFFECTS ON
ABOVE
ADJUSTMENTS
(5) $360 $140 $500 $292 $114 $406 23% 23%
NET INCOME $840 $325 $1,165 $670 $261 $931 25% 25%
DILUTED
EARNINGS PER
SHARE (6) $0.16 $0.22 $0.13 $0.18 28% 27%
DILUTED
WEIGHTED
AVERAGE
COMMON SHARES
OUTSTANDING
(6) 5,217 3 5,220 5,307 7 5,314 (2%) (2%)
(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 condensed 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 August 31, 2007, approximately $76 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
August 31, 2007 August 31, 2006
-----------------------------------------------------
GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP
-----------------------------------------------------
Sales and
marketing $13 $(13) $ - $10 $(10) $ -
Software license
updates and product
support 4 (4) - 3 (3) -
Cost of services 4 (4) - 3 (3) -
Research and
development 28 (28) - 22 (22) -
General and
administrative 20 (20) - 12 (12) -
-----------------------------------------------------
Subtotal 69 (69) - 50 (50) -
-----------------------------------------------------
Acquisition related 32 (32) - - - -
-----------------------------------------------------
Total stock-based
compensation $101 $(101) $ - $50 $(50) $ -
-----------------------------------------------------
(4) Estimated future annual amortization expense related to intangible
assets as of August 31, 2007 is as follows:
Remainder of Fiscal 2008 $871
2009 1,147
2010 1,021
2011 794
2012 656
2013 506
Thereafter 940
--------
Total $5,935
========
(5) The income tax provision was calculated reflecting an effective tax
rate of 30.0% and 30.4% in the first quarter of fiscal 2008 and 2007,
respectively.
(6) Non-GAAP diluted earnings per share and non-GAAP diluted weighted
average common shares outstanding were calculated excluding the
effects of adopting Statement 123R.
ORACLE CORPORATION
Q1 FISCAL 2008 FINANCIAL RESULTS
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in millions)
August 31, May 31,
2007 2007
------------ ------------
ASSETS
Current Assets:
Cash and cash equivalents $6,455 $6,218
Marketable securities 1,288 802
Trade receivables, net 2,735 4,074
Deferred tax assets 981 968
Other current assets 714 821
------------ ------------
Total Current Assets 12,173 12,883
Non-Current Assets:
Property, net 1,633 1,603
Intangible assets, net 5,935 5,964
Goodwill 13,544 13,479
Deferred tax assets 385 48
Other assets 645 595
------------ ------------
Total Non-Current Assets 22,142 21,689
------------ ------------
TOTAL ASSETS $34,315 $34,572
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Short-term borrowings and current portion
of long-term debt $2 $1,358
Accounts payable 298 315
Income taxes payable - 1,237
Accrued compensation and related benefits 1,090 1,349
Accrued restructuring 188 201
Deferred revenues 4,121 3,492
Other current liabilities 1,098 1,435
------------ ------------
Total Current Liabilities 6,797 9,387
Non-Current Liabilities:
Long-term debt 6,236 6,235
Income taxes payable 1,291 -
Deferred tax liabilities 1,121 1,121
Accrued restructuring 251 258
Deferred revenues 270 93
Minority interests 308 316
Other long-term liabilities 256 243
------------ ------------
Total Non-Current Liabilities 9,733 8,266
Stockholders' Equity 17,785 16,919
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $34,315 $34,572
============ ============
ORACLE CORPORATION
Q1 FISCAL 2008 FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in millions)
Three Months Ended August 31,
----------------------------
2007 2006
-------- --------
Cash Flows From Operating Activities:
Net income $840 $670
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 67 59
Amortization of intangible assets 285 198
Deferred income taxes 24 (6)
Minority interests in income 12 12
Stock-based compensation 101 50
Tax benefit on the exercise of stock options 129 49
Excess tax benefits from stock-based
compensation (82) (30)
In-process research and development 7 43
Net investment gains and earnings
related to equity investments - (15)
Changes in operating assets and liabilities,
net of effects from acquisitions:
Decrease in trade receivables 1,381 1,040
Decrease in prepaid expenses and other assets 161 86
Decrease in accounts payable and
other liabilities (679) (900)
Decrease in income taxes payable (301) (6)
Increase in deferred revenues 756 373
-------- --------
Net cash provided by operating activities 2,701 1,623
-------- --------
Cash Flows From Investing Activities:
Purchases of marketable securities
and investments (896) (2,430)
Proceeds from maturities and sales
of marketable securities and investments 561 642
Acquisitions, net of cash acquired (546) (225)
Capital expenditures (87) (49)
-------- --------
Net cash used for investing activities (968) (2,062)
-------- --------
Cash Flows From Financing Activities:
Payments for repurchases of common stock (530) (936)
Proceeds from issuance of common stock 317 162
Payments of debt (1,361) (7)
Excess tax benefits from stock-based
compensation 82 30
Distributions to minority interests (28) (25)
-------- --------
Net cash used for financing activities (1,520) (776)
-------- --------
Effect of exchange rate changes on
cash and cash equivalents 24 2
-------- --------
Net increase (decrease) in cash and
cash equivalents 237 (1,213)
-------- --------
Cash and cash equivalents at
beginning of period 6,218 6,659
-------- --------
Cash and cash equivalents at end of period $6,455 $5,446
-------- --------
ORACLE CORPORATION
Q1 FISCAL 2008 FINANCIAL RESULTS
FREE CASH FLOW - TRAILING 4-QUARTERS (1)
($ in millions)
Fiscal 2007 Fiscal 2008
----------------------------------------------------------
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
----------------------------------------------------------
GAAP Operating
Cash Flow $4,706 $4,651 $4,984 $5,520 $6,598
Capital
Expenditures (2) (233) (256) (258) (319) (357)
----------------------------------------------------------
Free Cash Flow $4,473 $4,395 $4,726 $5,201 $6,241
==========================================================
% Growth over
prior year 32% 32% 29% 21% 40%
GAAP Net Income $3,532 $3,702 $3,970 $4,274 $4,444
Free Cash Flow
as a % of Net
Income 127% 119% 119% 122% 140%
(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 2008 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
=========================================
Fiscal 2008
-----------------------------------------
Q1 Q2 Q3 Q4 TOTAL
-----------------------------------------
REVENUES
New software licenses $1,087 $1,087
Software license updates and
product support 2,383 2,383
-----------------------------------------
Software Revenues 3,470 3,470
Consulting 801 801
On Demand 158 158
Education 100 100
-----------------------------------------
Services Revenues 1,059 1,059
-----------------------------------------
Total Revenues $4,529 $4,529
=========================================
AS REPORTED REVENUE GROWTH RATES
New software licenses 35% 35%
Software license updates and
product support 23% 23%
Software Revenues 26% 26%
Consulting 25% 25%
On Demand 27% 27%
Education 24% 24%
Services Revenues 25% 25%
Total Revenues 26% 26%
CONSTANT CURRENCY GROWTH RATES
New software licenses 32% 32%
Software license updates and
product support 19% 19%
Software Revenues 23% 23%
Consulting 20% 20%
On Demand 23% 23%
Education 20% 20%
Services Revenues 21% 21%
Total Revenues 22% 22%
GEOGRAPHIC REVENUES
REVENUES
Americas $2,375 $2,375
Europe, Middle East & Africa 1,530 1,530
Asia Pacific 624 624
-----------------------------------------
Total Revenues $4,529 $4,529
=========================================
HEADCOUNT (2)
GEOGRAPHIC AREA
Americas 30,455
Europe, Middle East & Africa 15,985
Asia Pacific 31,212
-----------------------------------------
Total Company 77,652
=========================================
(1) The sum of the quarterly financial information may vary from
year-to-date financial information due to rounding.
(2) Headcount has increased primarily due to our acquisitions.
ORACLE CORPORATION
Q1 FISCAL 2008 FINANCIAL RESULTS
SUPPLEMENTAL TOTAL SOFTWARE PRODUCT REVENUE ANALYSIS (1)
($ 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%
Fiscal 2008
-----------------------------------------
Q1 Q2 Q3 Q4 TOTAL
-----------------------------------------
APPLICATIONS REVENUES
New software licenses $376 $376
Software license updates and
product support 886 886
-----------------------------------------
Software Revenues $1,262 $1,262
=========================================
AS REPORTED GROWTH RATES
New software licenses 65% 65%
Software license updates and
product support 26% 26%
Software Revenues 36% 36%
CONSTANT CURRENCY GROWTH RATES
New software licenses 61% 61%
Software license updates and
product support 22% 22%
Software Revenues 32% 32%
DATABASE & MIDDLEWARE REVENUES
New software licenses $711 $711
Software license updates and
product support 1,497 1,497
-----------------------------------------
Software Revenues $2,208 $2,208
=========================================
AS REPORTED GROWTH RATES
New software licenses 23% 23%
Software license updates and
product support 21% 21%
Software Revenues 22% 22%
CONSTANT CURRENCY GROWTH RATES
New software licenses 20% 20%
Software license updates and
product support 17% 17%
Software Revenues 18% 18%
(1) The sum of the quarterly financial information may vary from
year-to-date financial information due to rounding.
ORACLE CORPORATION
Q1 FISCAL 2008 FINANCIAL RESULTS
SUPPLEMENTAL GEOGRAPHIC NEW SOFTWARE LICENSE REVENUE ANALYSIS (1) (2)
($ 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%
Fiscal 2008
---------------------------------------
Q1 Q2 Q3 Q4 TOTAL
---------------------------------------
AMERICAS
Database & Middleware $286 $286
Applications 199 199
---------------------------------------
New Software License
Revenues $485 $485
=======================================
AS REPORTED GROWTH RATES
Database & Middleware 23% 23%
Applications 58% 58%
New Software License
Revenues 35% 35%
CONSTANT CURRENCY GROWTH RATES
Database & Middleware 22% 22%
Applications 57% 57%
New Software License
Revenues 34% 34%
EUROPE / MIDDLE EAST / AFRICA
Database & Middleware $253 $253
Applications 123 123
---------------------------------------
New Software License
Revenues $376 $376
=======================================
AS REPORTED GROWTH RATES
Database & Middleware 38% 38%
Applications 77% 77%
New Software License
Revenues 49% 49%
CONSTANT CURRENCY GROWTH RATES
Database & Middleware 30% 30%
Applications 69% 69%
New Software License
Revenues 41% 41%
ASIA PACIFIC
Database & Middleware $155 $155
Applications 54 54
---------------------------------------
New Software License
Revenues $209 $209
=======================================
AS REPORTED GROWTH RATES
Database & Middleware 4% 4%
Applications 67% 67%
New Software License
Revenues 15% 15%
CONSTANT CURRENCY GROWTH RATES
Database & Middleware 1% 1%
Applications 60% 60%
New Software License
Revenues 12% 12%
TOTAL COMPANY
Database & Middleware $694 $694
Applications 376 376
---------------------------------------
New Software License
Revenues (2) $1,070 $1,070
=======================================
AS REPORTED GROWTH RATES
Database & Middleware 23% 23%
Applications 65% 65%
New Software License
Revenues 35% 35%
CONSTANT CURRENCY GROWTH RATES
Database & Middleware 19% 19%
Applications 61% 61%
New Software License
Revenues 31% 31%
(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
Q1 FISCAL 2008 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 have excluded the effect of
stock-based compensation expenses from our non-GAAP operating expenses
and net income. 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.
class=ps>
|
