Dec 10, 2020 SOURCE: PR NewsWire
Oracle Announces Fiscal 2021 Second Quarter Financial Results
REDWOOD SHORES, Calif., Dec. 10, 2020 /PRNewswire/ -- Oracle Corporation (NYSE: ORCL) today announced fiscal 2021 Q2 results. Total quarterly revenues were up 2% year-over-year to $9.8 billion. Cloud services and license support revenues were up 4% to $7.1 billion. Cloud license and on-premise license revenues were down 3% to $1.1 billion.
Q2 GAAP operating income was up 13% to $3.6 billion and GAAP operating margin was 37%. Non-GAAP operating income was up 14% to $4.6 billion and non-GAAP operating margin was 47%. GAAP net income was up 6% to $2.4 billion, and non-GAAP net income was up 9% to $3.2 billion. GAAP earnings per share was up 16% to $0.80, while non-GAAP earnings per share was up 19% to $1.06.
Short-term deferred revenues were $8.1 billion. Operating cash flow was $14.0 billion during the trailing twelve months.
"Our highly profitable multi-billion dollar Fusion and NetSuite Cloud ERP applications businesses grew revenue 33% and 21% respectively in Q2," said Oracle CEO, Safra Catz. "These two strategic cloud applications businesses are major contributors to Oracle's increased operating earnings and consistent earnings per share growth. We expect this rapid market share and revenue growth trend to continue as both Gartner and IDC rank Oracle's ERP suite number one in the cloud."
"Oracle's Gen2 Cloud Infrastructure is adding customers and growing revenue at a rate well in excess of 100% per year," said Oracle Chairman and CTO, Larry Ellison. "Demand for our Gen2 Cloud Infrastructure is exceeding our plan and we are opening new datacenters as fast as we can. Oracle opened 13 additional regional datacenters in 2020 to bring our total to 29 regional datacenters worldwide, more than AWS."
The board of directors declared a quarterly cash dividend of $0.24 per share of outstanding common stock. This dividend will be paid to stockholders of record as of the close of business on January 7, 2021, with a payment date of January 21, 2021.
Business Innovations
-- Oracle increased its already aggressive expansion plan, and now expects
to have 38 Cloud regions live by mid-2021 with the recent opening of
three new commercial cloud regions, one in Dubai, one in the United
Kingdom, and one in Chile. Oracle has opened 13 Cloud regions so far in
2020 and currently operates 29 regions globally - the fastest expansion
by any major cloud provider.
-- Oracle announced the next generation of Oracle Exadata Cloud Service,
which helps customers accelerate their most challenging transaction
processing and data analytics projects in 29 global cloud regions and
Dedicated Region Cloud@Customer.
-- "Per IDC's latest SaaSPath survey, SaaS ERP customers ranked Oracle
highest in overall satisfaction among SAP, Microsoft, and Workday."
Source: IDC SaaSPath 2020: Vendor Ratings, Aug 2020.
-- An extended list of recent business innovations and announcements is
available at www.oracle.com/news.
Customer Momentum
-- Equinix - As the world's digital infrastructure company, Equinix
operates more than 200 data centers serving over 10,000 customers. The
company plans to implement Oracle Fusion Cloud ERP, EPM, and CX to
replace Oracle E-Business Suite applications. Equinix expects to
simplify and automate critical finance and go-to-market processes,
eliminating manual data entry and providing new functionality for their
finance teams.
-- Howard Hughes Medical Institute (HHMI) - One of the largest private
biomedical research institutions in the US, HHMI is leveraging Oracle
Cloud Infrastructure to shift various high-performance computing
workloads from on-premise to the cloud. This gives their scientific
researchers superior performance and, with significantly lower data
egress charges, provides more computing value for their investment.
-- First Solar - Solar electricity is essential to the world's energy mix,
and First Solar, the leading American company among the world's largest
solar manufacturers, is helping drive the transition to a sustainable
energy future. As part of its efforts to streamline and transform
internal systems, the company is replacing its multiple, disconnected
platforms with Oracle Fusion Cloud ERP, EPM, SCM, HCM, and CX.
-- T-Mobile - As they quickly expand their subscriber base and 5G network
coverage, T-Mobile continues to make customer experience their top
priority. They're investing across all customer touchpoints, including
their roughly 10,000 retail locations in North America. T-Mobile has
chosen Oracle Retail cloud applications for planning, distribution, and
optimization to help them improve customer satisfaction and their Net
Promoter Score. They also expect the system to help them add more
subscribers by, for example, using the platform's analytics and embedded
artificial intelligence to optimize in-store product placement during
new device launches.
-- An extended list of customers which purchased Oracle Cloud during the
quarter will be available at www.oracle.com/customers/earnings.
Earnings Conference Call and Webcast
Oracle will hold a conference call and webcast today to discuss these results at 2:00 p.m. Pacific. A live and replay webcast will be available on the Oracle Investor Relations website at www.oracle.com/investor.
About Oracle
The Oracle Cloud offers a complete suite of integrated applications for Sales, Service, Marketing, Human Resources, Finance, Supply Chain and Manufacturing, plus Highly-Automated and Secure Generation 2 Infrastructure featuring the Oracle Autonomous Database. For more information about Oracle (NYSE:ORCL), visit us at www.oracle.com or contact Investor Relations at investor_us@oracle.com or (650) 506-4073.
Trademarks
Oracle and Java are registered trademarks of Oracle and/or its affiliates. Other names may be trademarks of their respective owners.
"Safe Harbor" Statement: Statements in this press release relating to Oracle's future plans, expectations, beliefs, intentions and prospects, including statements regarding our future market share and revenue acceleration, customer momentum, and plans to open data centers and go live in various Cloud regions by mid-2021, 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) The COVID-19 pandemic has affected how we and our customers are operating our respective businesses, and the duration and extent to which this will impact our future results of operations and our overall financial performance remains uncertain. (2) Our success depends upon our ability to develop new products and services, integrate acquired products and services and enhance our existing products and services. (3) Our cloud strategy, including our Oracle Cloud Software-as-a-Service and Infrastructure-as-a-Service offerings, may adversely affect our revenues and profitability. (4) We might experience significant coding, manufacturing or configuration errors in our cloud, license and hardware offerings. (5) If the security measures for our products and services are compromised and as a result, our data, our customers' data or our IT systems are accessed improperly, made unavailable, or improperly modified, our products and services may be perceived as vulnerable, our brand and reputation could be damaged, the IT services we provide to our customers could be disrupted, and customers may stop using our products and services, all of which could reduce our revenue and earnings, increase our expenses and expose us to legal claims and regulatory actions. (6) Our business practices with respect to data could give rise to operational interruption, liabilities or reputational harm as a result of governmental regulation, legal requirements or industry standards relating to privacy and data protection. (7) Economic, political and market conditions can adversely affect our business, results of operations and financial condition, including our revenue growth and profitability, which in turn could adversely affect our stock price. (8) If we are unable to compete effectively, the results of operations and prospects for our business could be harmed. (9) Our international sales and operations subject us to additional risks that can adversely affect our operating results. (10) Acquisitions present many risks and we may not achieve the financial and strategic goals that were contemplated at the time of a transaction. A detailed discussion of these factors and other risks that affect our business is contained in our SEC filings, including our most recent reports on Form 10-K and Form 10-Q, particularly under the heading "Risk Factors." Copies of these filings are available online from the SEC or by contacting Oracle Corporation's Investor Relations Department at (650) 506-4073 or by clicking on SEC Filings on Oracle's Investor Relations website at http://www.oracle.com/investor. All information set forth in this press release is current as of December 10, 2020. Oracle undertakes no duty to update any statement in light of new information or future events.
ORACLE CORPORATION
Q2 FISCAL 2021 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
2020
Revenues 2019
Revenues
in US $
Currency (1)
REVENUES
Cloud services and license support $7,112 72% $6,811 71% 4% 4%
Cloud license and on-premise license 1,092 11% 1,126 12% (3%)
(5%)
Hardware 844 9% 871 9% (3%)
(3%)
Services 752 8% 806 8% (7%)
(8%)
Total revenues 9,800 100% 9,614 100% 2% 1%
OPERATING EXPENSES
Cloud services and license support 1,064 11% 1,022 11% 4% 4%
Hardware 244 2% 285 3% (15%) (15%)
Services 631 6% 741 8% (15%) (16%)
Sales and marketing 1,836 19% 2,068 22% (11%) (12%)
Research and development 1,601 16% 1,531 16% 5% 5%
General and administrative 324 3% 323 3% 0% 0%
Amortization of intangible assets 345 4% 407 4% (15%) (16%)
Acquisition related and other 76 1% 12 0% 514% 503%
Restructuring 96 1% 42 0% 130% 124%
Total operating expenses 6,217 63% 6,431 67% (3%)
(4%)
OPERATING INCOME 3,583 37% 3,183 33% 13% 11%
Interest expense (600) (7%) (465) (5%) 29% 29%
Non-operating (expenses) income, net (11) 0% 92 1%
*
*
INCOME BEFORE PROVISION FOR INCOME TAXES 2,972 30% 2,810 29% 6% 3%
Provision for income taxes 530 5% 499 5% 6% 4%
NET INCOME $2,442 25% $2,311 24% 6% 3%
EARNINGS PER SHARE:
Basic $0.82 $0.71
Diluted $0.80 $0.69
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 2,977 3,245
Diluted 3,046 3,331
(1) We compare the percent change in the results from one period to another period using constant currency disclosure. We present
constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect
of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities
reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in
effect on May 31, 2020, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during
the respective periods. Movements in international currencies relative to the United States dollar during the three months ended
November 30, 2020 compared with the corresponding prior year period increased our revenues by 1 percentage point, operating
expenses by 1 percentage point and operating income by 2 percentage points.
*
Not meaningful
ORACLE CORPORATION
Q2 FISCAL 2021 FINANCIAL RESULTS
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)
($ in millions, except per share data)
Three Months Ended November 30, % Increase (Decrease) % Increase (Decrease) in
in US $ Constant Currency (2)
2020 2020 2019 2019 GAAP
Non-GAAP GAAP Non-GAAP
GAAP
Adj.
Non-GAAP
GAAP
Adj.
Non-GAAP
TOTAL REVENUES $9,800
$ - $9,800 $9,614 $1 $9,615 2% 2% 1% 1%
Cloud services and license support 7,112 7,112 6,811 1 6,812 4% 4% 4% 4%
TOTAL OPERATING EXPENSES $6,217 $(1,005) $5,212 $6,431 $(858) $5,573 (3%) (6%) (4%) (7%)
Stock-based compensation (3) 488 (488) 397 (397) 23%
* 23%
*
Amortization of intangible assets (4) 345 (345) 407 (407) (15%)
* (16%)
*
Acquisition related and other 76 (76) 12 (12) 514%
* 503%
*
Restructuring 96 (96) 42 (42) 130%
* 124%
*
OPERATING INCOME $3,583 $1,005 $4,588 $3,183 $859 $4,042 13% 14% 11% 12%
OPERATING MARGIN % 37% 47% 33% 42%
346 bp.
478 bp.
314 bp.
452 bp.
INCOME TAX EFFECTS (5) $530 $212 $742 $499 $189 $688 6% 8% 4% 6%
NET INCOME $2,442 $793 $3,235 $2,311 $670 $2,981 6% 9% 3% 7%
DILUTED EARNINGS PER SHARE $0.80 $1.06 $0.69 $0.90 16% 19% 13% 17%
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 3,046 3,046 3,331 3,331 (9%) (9%) (9%) (9%)
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our
consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of
these measures and the material limitations on the usefulness of these measures, please see Appendix A.
(2) We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying
businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United
States dollars are converted into United States dollars at the exchange rates in effect on May 31, 2020, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during the
respective periods.
(3)
Stock-based compensation was included in the following GAAP operating expense categories:
Three Months Ended
Three Months Ended
November 30, 2020
November 30, 2019
GAAP
Adj.
Non-GAAP
GAAP
Adj.
Non-GAAP
Cloud services and license support $36 $(36)
$ - $30 $(30)
$ -
Hardware 3 (3) 3 (3)
Services 14 (14) 14 (14)
Sales and marketing 80 (80) 37 (37)
Research and development 314 (314) 272 (272)
General and administrative 41 (41) 41 (41)
Total stock-based compensation $488 $(488)
$ - $397 $(397)
$ -
(4)
Estimated future annual amortization expense related to intangible assets as of November 30, 2020 was as follows:
Remainder of fiscal 2021 $668
Fiscal 2022 1,106
Fiscal 2023 682
Fiscal 2024 445
Fiscal 2025 126
Fiscal 2026 24
Thereafter 10
Total intangible assets, net $3,061
(5) Income tax effects were calculated reflecting an effective GAAP tax rate of 17.8% and 17.7% in the second quarter of fiscal 2021 and 2020, respectively, and an effective non-GAAP tax rate of 18.7% and 18.8% in the
second quarter of fiscal 2021 and 2020, respectively. The differences in our GAAP and non-GAAP tax rates in the periods presented were primarily due to the net tax effects on stock-based compensation expense and
acquisition related items, including the tax effects of amortization of intangible assets.
*
Not meaningful
ORACLE CORPORATION
Q2 FISCAL 2021 YEAR TO DATE FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ in millions, except per share data)
Six Months Ended November 30, % Increase
% Increase (Decrease)
% of
% of (Decrease) in Constant
2020 Revenues 2019 Revenues in US $ Currency (1)
REVENUES
Cloud services and license support $14,059 73% $13,616 73% 3% 3%
Cloud license and on-premise license 1,978 10% 1,937 10% 2% 1%
Hardware 1,658 9% 1,686 9% (2%) (2%)
Services 1,472 8% 1,593 8% (8%) (8%)
Total revenues 19,167 100% 18,832 100% 2% 1%
OPERATING EXPENSES
Cloud services and license support 2,075 11% 2,003 11% 4% 4%
Hardware 490 3% 557 3% (12%) (12%)
Services 1,254 7% 1,445 8% (13%) (14%)
Sales and marketing 3,690 19% 4,086 22% (10%) (10%)
Research and development 3,190 17% 3,088 16% 3% 4%
General and administrative 619 3% 615 3% 1% 1%
Amortization of intangible assets 690 4% 821 4% (16%) (16%)
Acquisition related and other 95 0% 37 0% 154% 155%
Restructuring 270 1% 120 1% 125% 123%
Total operating expenses 12,373 65% 12,772 68% (3%) (3%)
OPERATING INCOME 6,794 35% 6,060 32% 12% 11%
Interest expense (1,214) (6%) (959) (5%) 27% 27%
Non-operating (expenses) income, net (13) 0% 191 1%
*
*
INCOME BEFORE PROVISION FOR INCOME TAXES 5,567 29% 5,292 28% 5% 4%
Provision for income taxes 874 5% 844 4% 4% 2%
NET INCOME $4,693 24% $4,448 24% 6% 4%
EARNINGS PER SHARE:
Basic $1.56 $1.36
Diluted $1.53 $1.32
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 3,009 3,281
Diluted 3,076 3,370
(1) We compare the percent change in the results from one period to another period using constant currency disclosure. We present
constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect
of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities
reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in
effect on May 31, 2020, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during
the respective periods. Movements in international currencies relative to the United States dollar during the six months ended
November 30, 2020 compared with the corresponding prior year period increased our revenues by 1 percentage point and operating
income by 1 percentage point.
*
Not meaningful
ORACLE CORPORATION
Q2 FISCAL 2021 YEAR TO DATE FINANCIAL RESULTS
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)
($ in millions, except per share data)
Six Months Ended November 30, % Increase (Decrease) % Increase (Decrease) in
in US $ Constant Currency (2)
2020 2020 2019 2019 GAAP
Non-GAAP GAAP
Non-GAAP
GAAP
Adj.
Non-GAAP
GAAP
Adj.
Non-GAAP
TOTAL REVENUES $19,167 $1 $19,168 $18,832 $3 $18,835 2% 2% 1% 1%
Cloud services and license support 14,059 1 14,060 13,616 3 13,619 3% 3% 3% 3%
TOTAL OPERATING EXPENSES $12,373 $(1,971) $10,402 $12,772 $(1,821) $10,951 (3%) (5%) (3%) (5%)
Stock-based compensation (3) 916 (916) 843 (843) 9%
* 9%
*
Amortization of intangible assets (4) 690 (690) 821 (821) (16%)
* (16%)
*
Acquisition related and other 95 (95) 37 (37) 154%
* 155%
*
Restructuring 270 (270) 120 (120) 125%
* 123%
*
OPERATING INCOME $6,794 $1,972 $8,766 $6,060 $1,824 $7,884 12% 11% 11% 10%
OPERATING MARGIN % 35% 46% 32% 42%
327 bp.
388 bp.
299 bp.
361 bp.
INCOME TAX EFFECTS (5) $874 $548 $1,422 $844 $528 $1,372 4% 4% 2% 2%
NET INCOME $4,693 $1,424 $6,117 $4,448 $1,296 $5,744 6% 7% 4% 5%
DILUTED EARNINGS PER SHARE $1.53 $1.99 $1.32 $1.70 16% 17% 14% 15%
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 3,076 3,076 3,370 3,370 (9%) (9%) (9%) (9%)
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our
consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of
these measures and the material limitations on the usefulness of these measures, please see Appendix A.
(2) We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying
businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States
dollars are converted into United States dollars at the exchange rates in effect on May 31, 2020, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during the respective
periods.
(3)
Stock-based compensation was included in the following GAAP operating expense categories:
Six Months Ended
Six Months Ended
November 30, 2020
November 30, 2019
GAAP
Adj.
Non-GAAP
GAAP
Adj.
Non-GAAP
Cloud services and license support $66 $(66)
$ - $61 $(61)
$ -
Hardware 6 (6) 6 (6)
Services 26 (26) 28 (28)
Sales and marketing 151 (151) 125 (125)
Research and development 590 (590) 543 (543)
General and administrative 77 (77) 80 (80)
Total stock-based compensation $916 $(916)
$ - $843 $(843)
$ -
(4)
Estimated future annual amortization expense related to intangible assets as of November 30, 2020 was as follows:
Remainder of fiscal 2021 $668
Fiscal 2022 1,106
Fiscal 2023 682
Fiscal 2024 445
Fiscal 2025 126
Fiscal 2026 24
Thereafter 10
Total intangible assets, net $3,061
(5) Income tax effects were calculated reflecting an effective GAAP tax rate of 15.7% and 16.0% in the first half of fiscal 2021 and 2020, respectively, and an effective non-GAAP tax rate of 18.9% and 19.3% in the first
half of fiscal 2021 and 2020, respectively. The differences in our GAAP and non-GAAP tax rates in the periods presented were primarily due to the net tax effects on stock-based compensation expense and acquisition
related items, including the tax effects of amortization of intangible assets.
*
Not meaningful
ORACLE CORPORATION
Q2 FISCAL 2021 FINANCIAL RESULTS
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in millions)
November 30, May 31,
2020 2020
ASSETS
Current Assets:
Cash and cash equivalents $28,001 $37,239
Marketable securities 10,592 5,818
Trade receivables, net 4,423 5,551
Prepaid expenses and other current assets 3,235 3,532
Total Current Assets 46,251 52,140
Non-Current Assets:
Property, plant and equipment, net 6,627 6,244
Intangible assets, net 3,061 3,738
Goodwill, net 43,877 43,769
Deferred tax assets 3,401 3,252
Other non-current assets 6,797 6,295
Total Non-Current Assets 63,763 63,298
TOTAL ASSETS $110,014 $115,438
LIABILITIES AND EQUITY
Current Liabilities:
Notes payable, current $7,251 $2,371
Accounts payable 724 637
Accrued compensation and related benefits 1,420 1,453
Deferred revenues 8,062 8,002
Other current liabilities 3,890 4,737
Total Current Liabilities 21,347 17,200
Non-Current Liabilities:
Notes payable and other borrowings, non-
current 63,531 69,226
Income taxes payable 12,214 12,463
Other non-current liabilities 4,306 3,832
Total Non-Current Liabilities 80,051 85,521
Equity 8,616 12,717
TOTAL LIABILITIES AND EQUITY $110,014 $115,438
ORACLE CORPORATION
Q2 FISCAL 2021 FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in millions)
Six Months Ended November 30,
2020 2019
Cash Flows From Operating Activities:
Net income $4,693 $4,448
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation 742 677
Amortization of intangible assets 690 821
Deferred income taxes (43) (263)
Stock-based compensation 916 843
Other, net 184 117
Changes in operating assets and liabilities, net of effects from acquisitions:
Decrease in trade receivables, net 1,263 1,079
Decrease in prepaid expenses and other assets 545 638
Decrease in accounts payable and other liabilities (248) (916)
Decrease in income taxes payable (1,243) (613)
Decrease in deferred revenues (158) (318)
Net cash provided by operating activities 7,341 6,513
Cash Flows From Investing Activities:
Purchases of marketable securities and other investments (15,578) (314)
Proceeds from maturities of marketable securities and other investments 10,776 2,204
Proceeds from sales of marketable securities 3 12,575
Acquisitions, net of cash acquired (111)
Capital expenditures (1,004) (735)
Net cash (used for) provided by investing activities (5,803) 13,619
Cash Flows From Financing Activities:
Payments for repurchases of common stock (8,962) (9,996)
Proceeds from issuances of common stock 772 617
Shares repurchased for tax withholdings upon vesting of restricted stock-
based awards (520) (559)
Payments of dividends to stockholders (1,447) (1,562)
Repayments of borrowings (1,000) (4,500)
Other, net 110 (96)
Net cash used for financing activities (11,047) (16,096)
Effect of exchange rate changes on cash and cash equivalents 271 (10)
Net (decrease) increase in cash and cash equivalents (9,238) 4,026
Cash and cash equivalents at beginning of period 37,239 20,514
Cash and cash equivalents at end of period $28,001 $24,540
ORACLE CORPORATION
Q2 FISCAL 2021 FINANCIAL RESULTS
FREE CASH FLOW - TRAILING 4-QUARTERS (1)
($ in millions)
Fiscal 2020
Fiscal 2021
Q1
Q2
Q3
Q4
Q1
Q2 Q3 Q4
GAAP Operating Cash Flow $13,829 $13,796 $13,947 $13,139 $13,092 $13,967
Capital Expenditures (1,663) (1,591) (1,544) (1,564) (1,614) (1,833)
Free Cash Flow $12,166 $12,205 $12,403 $11,575 $11,478 $12,134
% Growth over prior year
(12%)
(11%)
(6%)
(10%)
(6%)
(1%)
GAAP Net Income $10,955 $10,933 $10,759 $10,135 $10,249 $10,380
Free Cash Flow as a % of Net Income 111% 112% 115% 114% 112% 117%
(1)
To supplement our statements of cash flows presented on a GAAP basis, we use non-GAAP measures of cash flows on a trailing 4-quarter basis to
analyze cash flow generated from operations.
We believe free cash flow is also useful as one of the bases for comparing our performance with our competitors. The presentation of non-GAAP free cash flow is
not meant to be considered in
isolation or as an alternative to net income as an indicator of our performance, or as an alternative to cash flows from operating activities as a measure of
liquidity.
ORACLE CORPORATION
Q2 FISCAL 2021 FINANCIAL RESULTS
SUPPLEMENTAL ANALYSIS OF GAAP REVENUES (1)
($ in millions)
Fiscal 2020 Fiscal 2021
Q1
Q2
Q3
Q4
TOTAL
Q1
Q2
Q3 Q4
TOTAL
REVENUES BY OFFERINGS
Cloud services and license support $6,805 $6,811 $6,930 $6,845 $27,392 $6,947 $7,112 $14,059
Cloud license and on-premise license 812 1,126 1,231 1,959 5,127 886 1,092 1,978
Hardware 815 871 857 901 3,443 814 844 1,658
Services 786 806 778 735 3,106 720 752 1,472
$9,218 $9,614 $9,796 $10,440 $39,068 $9,367 $9,800 $19,167
Total revenues
AS REPORTED REVENUE GROWTH RATES
Cloud services and license support 3% 3% 4% 1% 3% 2% 4% 3%
Cloud license and on-premise license (6%) (7%) (2%) (22%) (12%) 9% (3%) 2%
Hardware (10%) (2%) (6%) (9%) (7%) 0% (3%) (2%)
Services (3%) (1%) (1%) (11%) (4%) (8%) (7%) (8%)
0% 1% 2% (6%) (1%) 2% 2% 2%
Total revenues
CONSTANT CURRENCY REVENUE GROWTH RATES (2)
Cloud services and license support 4% 4% 5% 3% 4% 2% 4% 3%
Cloud license and on-premise license (6%) (7%) 0% (21%) (11%) 8% (5%) 1%
Hardware (9%) (1%) (5%) (7%) (6%) 0% (3%) (2%)
Services (2%) 0% 0% (8%) (3%) (8%) (8%) (8%)
2% 1% 3% (4%) 0% 2% 1% 1%
Total revenues
CLOUD SERVICES AND LICENSE SUPPORT REVENUES
BY ECOSYSTEM
Applications cloud services and license support $2,704 $2,753 $2,809 $2,749 $11,015 $2,816 $2,901 $5,717
Infrastructure cloud services and license support 4,101 4,058 4,121 4,096 16,377 4,131 4,211 8,342
$6,805 $6,811 $6,930 $6,845 $27,392 $6,947 $7,112 $14,059
Total cloud services and license support revenues
AS REPORTED REVENUE GROWTH RATES
Applications cloud services and license support 5% 5% 6% 1% 4% 4% 5% 5%
Infrastructure cloud services and license support 2% 1% 2% 0% 1% 1% 4% 2%
3% 3% 4% 1% 3% 2% 4% 3%
Total cloud services and license support revenues
CONSTANT CURRENCY REVENUE GROWTH RATES (2)
Applications cloud services and license support 6% 6% 7% 3% 5% 4% 5% 4%
Infrastructure cloud services and license support 3% 2% 4% 3% 3% 1% 3% 2%
4% 4% 5% 3% 4% 2% 4% 3%
Total cloud services and license support revenues
GEOGRAPHIC REVENUES
Americas $5,150 $5,304 $5,363 $5,746 $21,563 $5,068 $5,259 $10,327
Europe/Middle East/Africa 2,553 2,695 2,835 2,952 11,035 2,738 2,852 5,590
Asia Pacific 1,515 1,615 1,598 1,742 6,470 1,561 1,689 3,250
$9,218 $9,614 $9,796 $10,440 $39,068 $9,367 $9,800 $19,167
Total revenues
(1)
The sum of the quarterly information presented may vary from the year-to-date information
presented due to rounding.
(2)
We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to
provide a framework for assessing
how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for
entities reporting in
currencies other than United States dollars are converted into United States dollars at the exchange rates in effect on May 31, 2020 and 2019 for the fiscal 2021 and fiscal 2020
constant currency
growth rate calculations presented, respectively, rather than the actual exchange rates in effect during the respective periods.
APPENDIX A
ORACLE CORPORATION
Q2 FISCAL 2021 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:
Cloud services and license support revenues:
Business combination accounting rules require us to
account for the fair values of cloud services and
license support contracts assumed in connection
with our acquisitions. The non-GAAP adjustments to
our cloud services and license support revenues are
intended to include, and thus reflect, the full
amount of such revenues. We believe the adjustments
to these revenues are useful to investors as a
measure of the ongoing performance of our business
as we generally expect to experience high renewal
rates for these contracts at their stated values
during the post combination periods.
Stock-based compensation expenses: We have excluded
the effect of stock-based compensation expenses
from our non-GAAP operating expenses and net
income measures. Although stock-based compensation
is a key incentive offered to our employees, and we
believe such compensation contributed to the
revenues earned during the periods presented and
also believe it will contribute to the generation
of future period revenues, we continue to evaluate
our business performance excluding stock-based
compensation expenses. Stock-based compensation
expenses will recur in future periods.
Amortization of intangible assets: We have excluded
the effect of amortization of intangible assets
from our non-GAAP operating expenses and net
income measures. Amortization of intangible assets
is inconsistent in amount and frequency and is
significantly affected by the timing and size of
our acquisitions. Investors should note that the
use of intangible assets contributed to our
revenues earned during the periods presented and
will contribute to our future period revenues as
well. Amortization of intangible assets will recur
in future periods.
Acquisition related and other expenses; and
restructuring expenses: We have excluded the effect
of acquisition related and other expenses and the
effect of restructuring expenses from our non-GAAP
operating expenses and net income measures. We
incurred 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 primarily
consist of personnel related costs for transitional
and certain other employees, certain business
combination adjustments including adjustments after
the measurement period has ended and certain other
operating items, net. Restructuring expenses
consist of employee severance and other exit costs.
We believe it is useful for investors to understand
the effects of these items on our total operating
expenses. Although acquisition related and other
expenses and restructuring expenses generally
diminish over time with respect to past
acquisitions and/or strategic initiatives, we
generally will incur these expenses in connection
with any future acquisitions and/or strategic
initiatives.
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SOURCE Oracle
