Oracle Announces Fiscal 2024 Third Quarter Financial Results
-- Q3 GAAP Earnings per Share $0.85, Non-GAAP Earnings per Share up 16% to
$1.41
-- Q3 Total Revenue $13.3 billion, up 7% in both USD and constant currency
-- Q3 Total Remaining Performance Obligations up 29% to $80 billion
-- Q3 Cloud Revenue (IaaS plus SaaS) $5.1 billion, up 25% in USD, up 24% in
constant currency
-- Q3 Cloud Infrastructure (IaaS) Revenue $1.8 billion, up 49% in both USD
and constant currency
-- Q3 Cloud Application (SaaS) Revenue $3.3 billion, up 14% in both USD and
constant currency
-- Q3 Fusion Cloud ERP (SaaS) Revenue $0.8 billion, up 18% in both USD and
constant currency
-- Q3 NetSuite Cloud ERP (SaaS) Revenue $0.8 billion, up 21% in USD, up 20%
in constant currency
AUSTIN, Texas, March 11, 2024 /PRNewswire/ -- Oracle Corporation (NYSE: ORCL) today announced fiscal 2024 Q3 results. Total quarterly revenues were up 7% year-over-year in both USD and constant currency to $13.3 billion. Cloud services and license support revenues were up 12% in USD and up 11% in constant currency to $10.0 billion. Cloud license and on-premise license revenues were down 3% in both USD and constant currency to $1.3 billion.
Q3 GAAP operating income was $3.8 billion. Non-GAAP operating income was $5.8 billion, up 12% in both USD and constant currency. GAAP operating margin was 28%, and non-GAAP operating margin was 44%. GAAP net income was $2.4 billion. Non-GAAP net income was $4.0 billion, up 18% in both USD and constant currency. Q3 GAAP earnings per share was $0.85 while non-GAAP earnings per share was $1.41, up 16% in both USD and constant currency.
Short-term deferred revenues were $8.9 billion. Over the last twelve months, operating cash flow was $18.2 billion and free cash flow was $12.3 billion.
"Large new cloud infrastructure contracts signed in Q3 drove Oracle's total Remaining Performance Obligations up 29% to over $80 billion--an all-time record," said Oracle CEO, Safra Catz. "We expect to continue receiving large contracts reserving cloud infrastructure capacity because the demand for our Gen2 AI infrastructure substantially exceeds supply--despite the fact we are opening new and expanding existing cloud datacenters very, very rapidly. We expect that 43% of our current $80 billion of Remaining Performance Obligations will be recognized as revenue over the next four quarters, and that our Gen2 Cloud Infrastructure business will remain in a hypergrowth phase--up 53% in Q3--for the foreseeable future."
"In Q3, Oracle finished moving the majority of Cerner customers to Oracle's Gen2 Cloud Infrastructure," said Oracle Chairman and CTO, Larry Ellison. "In Q4, Oracle will start delivering its completely new Ambulatory Clinic Cloud Application Suite to these same customers. This new AI-driven system features an integrated voice interface called the Clinical Digital Assistant that automatically generates doctors' notes and updates Electronic Health Records--saving precious time and improving health data accuracy. The delivery of this revolutionary new healthcare technology will enable the rapid modernization of our customers' health systems over the coming year, and transform Cerner and Oracle Health into a high-growth business for years to come."
The board of directors declared a quarterly cash dividend of $0.40 per share of outstanding common stock. This dividend will be paid to stockholders of record as of the close of business on April 10, 2024, with a payment date of April 24, 2024.
-- A sample list of customers which purchased Oracle Cloud services during
the quarter will be available at www.oracle.com/customers/earnings/.
-- A list of recent technical innovations and announcements is available at
www.oracle.com/news/.
-- To learn what industry analysts have been saying about Oracle's products
and services see www.oracle.com/corporate/analyst-reports/.
Earnings Conference Call and Webcast
Oracle will hold a conference call and webcast today to discuss these results at 4:00 p.m. Central. A live and replay webcast will be available on the Oracle Investor Relations website at www.oracle.com/investor/.
About Oracle
Oracle offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. For more information about Oracle (NYSE: ORCL), please visit us at www.oracle.com.
Trademarks
Oracle, Java, MySQL, and NetSuite are registered trademarks of Oracle Corporation. NetSuite was the first cloud company--ushering in the new era of cloud computing.
"Safe Harbor" Statement: Statements in this press release relating to future plans, expectations, beliefs, intentions and prospects, including demand for Oracle Cloud Infrastructure capacity, expectations for growth in our Cerner, Oracle Health and Gen2 Cloud Infrastructure businesses, the rate and timing of conversion of the Remaining Performance Obligations to revenue and beliefs regarding modernizing digital healthcare systems, are "forward-looking statements" and are subject to material risks and uncertainties. Risks and uncertainties that could affect our current expectations and our actual results, include, among others: our ability to develop new products and services, integrate acquired products and services and enhance our existing products and services; our management of complex cloud and hardware offerings, including the sourcing of technologies and technology components; significant coding, manufacturing or configuration errors in our offerings; risks associated with acquisitions; economic, political and market conditions; information technology system failures, privacy and data security concerns; cybersecurity breaches; unfavorable legal proceedings, government investigations, and complex and changing laws and regulations. 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's Investor Relations Department at (650) 506-4073 or by clicking on SEC Filings on the Oracle Investor Relations website at www.oracle.com/investor/. All information set forth in this press release is current as of March 11, 2024. Oracle undertakes no duty to update any statement in light of new information or future events.
ORACLE CORPORATION
Q3 FISCAL 2024 FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ in millions, except per share data)
Three Months Ended % Increase
% Increase (Decrease)
February 29, % of February 28, % of (Decrease) in Constant
2024 Revenues 2023 Revenues in US $ Currency (1)
REVENUES
Cloud services and license support $9,963 75 % $8,923 72 % 12 % 11 %
Cloud license and on-premise license 1,256 9 % 1,288 10 % (3 %)
(3 %)
Hardware 754 6 % 811 7 % (7 %)
(7 %)
Services 1,307 10 % 1,376 11 % (5 %)
(5 %)
Total revenues 13,280 100 % 12,398 100 % 7 % 7 %
OPERATING EXPENSES
Cloud services and license support 2,452 18 % 1,980 16 % 24 % 24 %
Hardware 217 2 % 244 2 % (11 %)
(11 %)
Services 1,200 9 % 1,215 10 % (1 %)
(1 %)
Sales and marketing 2,042 15 % 2,150 18 % (5 %)
(6 %)
Research and development 2,248 17 % 2,146 17 % 5 % 5 %
General and administrative 377 3 % 402 3 % (6 %)
(7 %)
Amortization of intangible assets 749 6 % 886 7 % (15 %)
(15 %)
Acquisition related and other 155 1 % 37 0 % 317 % 317 %
Restructuring 90 1 % 78 1 % 15 % 14 %
Total operating expenses 9,530 72 % 9,138 74 % 4 % 4 %
OPERATING INCOME 3,750 28 % 3,260 26 % 15 % 15 %
Interest expense (876) (6 %) (908) (7 %) (3 %)
(3 %)
Non-operating expenses, net (9) 0 % (134) (1 %) (94 %)
(93 %)
INCOME BEFORE INCOME TAXES 2,865 22 % 2,218 18 % 29 % 29 %
Provision for income taxes 464 4 % 322 3 % 44 % 44 %
NET INCOME $2,401 18 % $1,896 15 % 27 % 26 %
EARNINGS PER SHARE:
Basic $0.87 $0.70
Diluted $0.85 $0.68
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 2,748 2,698
Diluted 2,819 2,776
(1) We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency
information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations.
To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are
converted into United States dollars at the exchange rates in effect on May 31, 2023, which was the last day of our prior fiscal year, rather than the
actual exchange rates in effect during the respective periods. Movements in international currencies relative to the United States dollar during the
three months ended February 29, 2024 compared with the corresponding prior year period had no impact to our total revenues, total operating expenses
and operating income.
ORACLE CORPORATION
Q3 FISCAL 2024 FINANCIAL RESULTS
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)
($ in millions, except per share data)
Three Months Ended % Increase % Increase
(Decrease) (Decrease) in
in US $ Constant
Currency (2)
February 29, February 29, February 28, February 28, GAAP Non-GAAP GAAP Non-GAAP
2024 2024 2023 2023
GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP
TOTAL REVENUES $13,280
$ - $13,280 $12,398
$ - $12,398 7 % 7 % 7 % 7 %
TOTAL OPERATING EXPENSES $9,530 $(2,042) $7,488 $9,138 $(1,925) $7,213 4 % 4 % 4 % 3 %
Stock-based compensation (3) 1,048 (1,048) 924 (924) 13 % * 13 % *
Amortization of intangible assets
(4) 749 (749) 886 (886) (15 %) * (15 %) *
Acquisition related and other 155 (155) 37 (37) 317 % * 317 % *
Restructuring 90 (90) 78 (78) 15 % * 14 % *
OPERATING INCOME $3,750 $2,042 $5,792 $3,260 $1,925 $5,185 15 % 12 % 15 % 12 %
OPERATING MARGIN % 28 % 44 % 26 % 42 % 194 bp. 179 bp. 194 bp. 183 bp.
INCOME TAX EFFECTS (5) $464 $461 $925 $322 $439 $761 44 % 22 % 44 % 21 %
NET INCOME $2,401 $1,581 $3,982 $1,896 $1,486 $3,382 27 % 18 % 26 % 18 %
DILUTED EARNINGS PER SHARE $0.85 $1.41 $0.68 $1.22 25 % 16 % 24 % 16 %
DILUTED WEIGHTED AVERAGE COMMON 2,819 2,819 2,776 2,776 2 % 2 % 2 % 2 %
SHARES OUTSTANDING
(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, 2023, 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
February 29, 2024
February 28, 2023
GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP
Cloud services and license support $138 $(138)
$ - $114 $(114)
$ -
Hardware 6 (6) 5 (5)
Services 45 (45) 39 (39)
Sales and marketing 179 (179) 158 (158)
Research and development 584 (584) 517 (517)
General and administrative 96 (96) 91 (91)
Total stock-based compensation $1,048 $(1,048)
$ - $924 $(924)
$ -
(4)
Estimated future annual amortization expense related to intangible assets as of February 29, 2024 was as follows:
Remainder of fiscal 2024 $739
Fiscal 2025 2,303
Fiscal 2026 1,639
Fiscal 2027 672
Fiscal 2028 635
Fiscal 2029 561
Thereafter 1,080
Total intangible assets, net $7,629
(5) Income tax effects were calculated reflecting an effective GAAP tax rate of 16.2% and 14.5% in the third quarter of fiscal 2024 and 2023, respectively, and an effective
non-GAAP tax rate of 18.9% and 18.4% in the third quarter of fiscal 2024 and 2023, respectively. The difference in our GAAP and non-GAAP tax rates in each of the
third quarter of fiscal 2024 and 2023 was primarily due to the net tax effects related to stock-based compensation expense; acquisition related and other items,
including the tax effects on amortization of intangible assets; and restructuring expense, partially offset by the net deferred tax effects related to an income tax
benefit that was previously recorded due to the partial realignment of our legal entity structure.
*
Not meaningful
ORACLE CORPORATION
Q3 FISCAL 2024 YEAR TO DATE FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ in millions, except per share data)
Nine Months Ended % Increase
% Increase (Decrease)
February 29, % of February 28, % of (Decrease) in Constant
2024 Revenues 2023 Revenues in US $ Currency (1)
REVENUES
Cloud services and license support $29,149 75 % $25,938 72 % 12 % 11 %
Cloud license and on-premise license 3,243 8 % 3,627 10 % (11 %) (11 %)
Hardware 2,224 6 % 2,424 7 % (8 %) (9 %)
Services 4,058 11 % 4,129 11 % (2 %) (2 %)
Total revenues 38,674 100 % 36,118 100 % 7 % 6 %
OPERATING EXPENSES
Cloud services and license support 6,905 18 % 5,606 16 % 23 % 22 %
Hardware 649 2 % 780 2 % (17 %) (18 %)
Services 3,665 9 % 3,448 10 % 6 % 6 %
Sales and marketing 6,161 16 % 6,544 18 % (6 %) (7 %)
Research and development 6,689 17 % 6,397 18 % 5 % 4 %
General and administrative 1,146 3 % 1,179 3 % (3 %) (4 %)
Amortization of intangible assets 2,267 6 % 2,712 7 % (16 %) (16 %)
Acquisition related and other 214 0 % 140 0 % 53 % 52 %
Restructuring 311 1 % 359 1 % (13 %) (14 %)
Total operating expenses 28,007 72 % 27,165 75 % 3 % 3 %
OPERATING INCOME 10,667 28 % 8,953 25 % 19 % 17 %
Interest expense (2,636) (7 %) (2,550) (7 %) 3 % 3 %
Non-operating expenses, net (72) 0 % (386) (2 %) (81 %) (82 %)
INCOME BEFORE INCOME TAXES 7,959 21 % 6,017 16 % 32 % 29 %
Provision for income taxes 636 2 % 833 2 % (24 %) (25 %)
NET INCOME $7,323 19 % $5,184 14 % 41 % 38 %
EARNINGS PER SHARE:
Basic $2.67 $1.93
Diluted $2.60 $1.88
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 2,741 2,692
Diluted 2,820 2,757
(1) We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency
information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations.
To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are
converted into United States dollars at the exchange rates in effect on May 31, 2023, which was the last day of our prior fiscal year, rather than the
actual exchange rates in effect during the respective periods. Movements in international currencies relative to the United States dollar during the
nine months ended February 29, 2024 compared with the corresponding prior year period increased our total revenues by 1 percentage point and operating
income by 2 percentage points.
ORACLE CORPORATION
Q3 FISCAL 2024 YEAR TO DATE FINANCIAL RESULTS
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)
($ in millions, except per share data)
Nine Months Ended % Increase % Increase
(Decrease) (Decrease)
in US $ in Constant
Currency (2)
February 29, February 29, February 28, February 28, GAAP Non-GAAP GAAP Non-GAAP
2024 2024 2023 2023
GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP
TOTAL REVENUES $38,674
$ - $38,674 $36,118
$ - $36,118 7 % 7 % 6 % 6 %
TOTAL OPERATING EXPENSES $28,007 $(5,719) $22,288 $27,165 $(5,794) $21,371 3 % 4 % 3 % 4 %
Stock-based compensation (3) 2,927 (2,927) 2,583 (2,583) 13 % * 13 % *
Amortization of intangible assets
(4) 2,267 (2,267) 2,712 (2,712) (16 %) * (16 %) *
Acquisition related and other 214 (214) 140 (140) 53 % * 52 % *
Restructuring 311 (311) 359 (359) (13 %) * (14 %) *
OPERATING INCOME $10,667 $5,719 $16,386 $8,953 $5,794 $14,747 19 % 11 % 17 % 10 %
OPERATING MARGIN % 28 % 42 % 25 % 41 % 279 bp. 154 bp. 260 bp. 147 bp.
INCOME TAX EFFECTS (5) $636 $1,939 $2,575 $833 $1,457 $2,290 (24 %) 12 % (25 %) 11 %
NET INCOME $7,323 $3,780 $11,103 $5,184 $4,337 $9,521 41 % 17 % 38 % 15 %
DILUTED EARNINGS PER SHARE $2.60 $3.94 $1.88 $3.45 38 % 14 % 35 % 13 %
DILUTED WEIGHTED AVERAGE COMMON 2,820 2,820 2,757 2,757 2 % 2 % 2 % 2 %
SHARES OUTSTANDING
(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, 2023, 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:
Nine Months Ended
Nine Months Ended
February 29, 2024
February 28, 2023
GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP
Cloud services and license support $386 $(386)
$ - $319 $(319)
$ -
Hardware 17 (17) 13 (13)
Services 123 (123) 99 (99)
Sales and marketing 488 (488) 433 (433)
Research and development 1,642 (1,642) 1,448 (1,448)
General and administrative 271 (271) 271 (271)
Total stock-based compensation $2,927 $(2,927)
$ - $2,583 $(2,583)
$ -
(4)
Estimated future annual amortization expense related to intangible assets as of February 29, 2024 was as follows:
Remainder of fiscal 2024 $739
Fiscal 2025 2,303
Fiscal 2026 1,639
Fiscal 2027 672
Fiscal 2028 635
Fiscal 2029 561
Thereafter 1,080
Total intangible assets, net $7,629
(5) Income tax effects were calculated reflecting an effective GAAP tax rate of 8.0% and 13.8% in the first nine months of fiscal 2024 and 2023, respectively, and an
effective non-GAAP tax rate of 18.8% and 19.4% in the first nine months of fiscal 2024 and 2023, respectively. The difference in our GAAP and non-GAAP tax
rates in each of the first nine months of fiscal 2024 and 2023 was primarily due to the net tax effects related to stock-based compensation expense; acquisition
related and other items, including the tax effects on amortization of intangible assets; and restructuring expense, partially offset by the net deferred tax
effects related to an income tax benefit that was previously recorded due to the partial realignment of our legal entity structure.
*
Not meaningful
ORACLE CORPORATION
Q3 FISCAL 2024 FINANCIAL RESULTS
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in millions)
February 29, May 31,
2024 2023
ASSETS
Current Assets:
Cash and cash equivalents $9,481 $9,765
Marketable securities 423 422
Trade receivables, net 7,297 6,915
Prepaid expenses and other
current assets 3,862 3,902
Total Current Assets 21,063 21,004
Non-Current Assets:
Property, plant and equipment,
net 19,117 17,069
Intangible assets, net 7,629 9,837
Goodwill, net 62,222 62,261
Deferred tax assets 12,688 12,226
Other non-current assets 14,363 11,987
Total Non-Current Assets 116,019 113,380
TOTAL ASSETS $137,082 $134,384
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable and other
borrowings, current $5,510 $4,061
Accounts payable 1,658 1,204
Accrued compensation and related
benefits 1,796 2,053
Deferred revenues 8,931 8,970
Other current liabilities 6,990 6,802
Total Current Liabilities 24,885 23,090
Non-Current Liabilities:
Notes payable and other
borrowings, non-current 82,470 86,420
Income taxes payable 10,451 11,077
Deferred tax liabilities 4,483 5,772
Other non-current liabilities 8,611 6,469
Total Non-Current Liabilities 106,015 109,738
Stockholders' Equity 6,182 1,556
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $137,082 $134,384
ORACLE CORPORATION
Q3 FISCAL 2024 FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in millions)
Nine Months Ended
February 29, February 28,
2024 2023
Cash Flows From Operating Activities:
Net income $7,323 $5,184
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 2,318 1,810
Amortization of intangible assets 2,267 2,712
Deferred income taxes (1,755) (1,253)
Stock-based compensation 2,927 2,583
Other, net 631 487
Changes in operating assets and liabilities, net of effects from acquisitions:
(Increase) decrease in trade receivables, net (409) 460
Decrease in prepaid expenses and other assets 457 515
Decrease in accounts payable and other liabilities (682) (783)
Decrease in income taxes payable (788) (453)
Increase in deferred revenues 303 256
Net cash provided by operating activities 12,592 11,518
Cash Flows From Investing Activities:
Purchases of marketable securities and other investments (674) (921)
Proceeds from sales and maturities of marketable securities and other investments 207 552
Acquisitions, net of cash acquired (59) (27,721)
Capital expenditures (4,068) (6,782)
Net cash used for investing activities (4,594) (34,872)
Cash Flows From Financing Activities:
Payments for repurchases of common stock (1,050) (1,150)
Proceeds from issuances of common stock 454 759
Shares repurchased for tax withholdings upon vesting of restricted stock-based awards (1,865) (1,040)
Payments of dividends to stockholders (3,289) (2,586)
Proceeds from issuances of commercial paper, net of repayments 936 1,874
Proceeds from issuances of senior notes and other borrowings, net of issuance costs 33,494
Repayments of senior notes and other borrowings (3,500) (21,050)
Other, net 34 49
Net cash (used for) provided by financing activities (8,280) 10,350
Effect of exchange rate changes on cash and cash equivalents (2) (160)
Net decrease in cash and cash equivalents (284) (13,164)
Cash and cash equivalents at beginning of period 9,765 21,383
Cash and cash equivalents at end of period $9,481 $8,219
ORACLE CORPORATION
Q3 FISCAL 2024 FINANCIAL RESULTS
FREE CASH FLOW - TRAILING 4-QUARTERS (1)
($ in millions)
Fiscal 2023 Fiscal 2024
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
GAAP Operating Cash Flow $10,542 $15,073 $15,503 $17,165 $17,745 $17,039 $18,239
Capital Expenditures (5,168) (6,678) (8,205) (8,695) (8,290) (6,935) (5,981)
Free Cash Flow $5,374 $8,395 $7,298 $8,470 $9,455 $10,104 $12,258
Operating Cash Flow % Growth over prior year (31 %) 47 % 49 % 80 % 68 % 13 % 18 %
Free Cash Flow % Growth over prior year (57 %) 18 % 11 % 68 % 76 % 20 % 68 %
GAAP Net Income $5,808 $8,797 $8,373 $8,503 $9,375 $10,137 $10,642
Operating Cash Flow as a % of Net Income 182 % 171 % 185 % 202 % 189 % 168 % 171 %
Free Cash Flow as a % of Net Income 93 % 95 % 87 % 100 % 101 % 100 % 115 %
(1) To supplement our statements of cash flows presented on a GAAP basis, we use non-GAAP measures of cash flows on a trailing 4-quarter basis to analyze cash flow generated from
operations. We believe free cash flow is also useful as one of the bases for comparing our performance with our competitors. The presentation of non-GAAP free cash flow is not meant
to be considered in isolation or as an alternative to net income as an indicator of our performance, or as an alternative to cash flows from operating activities as a measure of liquidity.
ORACLE CORPORATION
Q3 FISCAL 2024 FINANCIAL RESULTS
SUPPLEMENTAL ANALYSIS OF GAAP REVENUES (1)
($ in millions)
Fiscal 2023 Fiscal 2024
Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 Q4 TOTAL
REVENUES BY OFFERINGS
Cloud services $3,579 $3,813 $4,053 $4,437 $15,881 $4,635 $4,775 $5,054 $14,464
License support 4,838 4,785 4,870 4,933 19,426 4,912 4,864 4,909 14,685
Cloud services and license support 8,417 8,598 8,923 9,370 35,307 9,547 9,639 9,963 29,149
Cloud license and on-premise license 904 1,435 1,288 2,152 5,779 809 1,178 1,256 3,243
Hardware 763 850 811 850 3,274 714 756 754 2,224
Services 1,361 1,392 1,376 1,465 5,594 1,383 1,368 1,307 4,058
Total revenues $11,445 $12,275 $12,398 $13,837 $49,954 $12,453 $12,941 $13,280 $38,674
AS REPORTED REVENUE GROWTH RATES
Cloud services 45 % 43 % 45 % 54 % 47 % 30 % 25 % 25 % 26 %
License support (1 %) (2 %) 0 % 4 % 0 % 2 % 2 % 1 % 1 %
Cloud services and license support 14 % 14 % 17 % 23 % 17 % 13 % 12 % 12 % 12 %
Cloud license and on-premise license 11 % 16 % 0 % (15 %) (2 %) (10 %) (18 %) (3 %) (11 %)
Hardware 0 % 11 % 2 % (1 %) 3 % (6 %) (11 %) (7 %) (8 %)
Services 74 % 74 % 74 % 76 % 75 % 2 % (2 %) (5 %) (2 %)
Total revenues 18 % 18 % 18 % 17 % 18 % 9 % 5 % 7 % 7 %
CONSTANT CURRENCY REVENUE GROWTH RATES (2)
Cloud services 50 % 48 % 48 % 55 % 50 % 29 % 24 % 24 % 25 %
License support 4 % 4 % 3 % 6 % 4 % 0 % 0 % 1 % 0 %
Cloud services and license support 20 % 20 % 20 % 25 % 21 % 12 % 11 % 11 % 11 %
Cloud license and on-premise license 19 % 23 % 4 % (14 %) 2 % (11 %) (19 %) (3 %) (11 %)
Hardware 5 % 16 % 4 % 1 % 6 % (8 %) (12 %) (7 %) (9 %)
Services 84 % 83 % 80 % 78 % 81 % 1 % (3 %) (5 %) (2 %)
Total revenues 23 % 25 % 21 % 18 % 22 % 8 % 4 % 7 % 6 %
CLOUD SERVICES AND LICENSE SUPPORT REVENUES
BY ECOSYSTEM
Applications cloud services and license support $4,016 $4,080 $4,166 $4,390 $16,651 $4,471 $4,474 $4,584 $13,529
Infrastructure cloud services and license support 4,401 4,518 4,757 4,980 18,656 5,076 5,165 5,379 15,620
Total cloud services and license support revenues $8,417 $8,598 $8,923 $9,370 $35,307 $9,547 $9,639 $9,963 $29,149
AS REPORTED REVENUE GROWTH RATES
Applications cloud services and license support 32 % 30 % 31 % 36 % 32 % 11 % 10 % 10 % 10 %
Infrastructure cloud services and license support 2 % 3 % 7 % 14 % 6 % 15 % 14 % 13 % 14 %
Total cloud services and license support revenues 14 % 14 % 17 % 23 % 17 % 13 % 12 % 12 % 12 %
CONSTANT CURRENCY REVENUE GROWTH RATES (2)
Applications cloud services and license support 37 % 35 % 33 % 37 % 35 % 11 % 9 % 10 % 10 %
Infrastructure cloud services and license support 7 % 9 % 10 % 15 % 10 % 14 % 12 % 13 % 13 %
Total cloud services and license support revenues 20 % 20 % 20 % 25 % 21 % 12 % 11 % 11 % 11 %
GEOGRAPHIC REVENUES
Americas $7,192 $7,786 $7,671 $8,577 $31,226 $7,841 $8,067 $8,270 $24,177
Europe/Middle East/Africa 2,691 2,895 3,067 3,457 12,109 3,005 3,170 3,316 9,491
Asia Pacific 1,562 1,594 1,660 1,803 6,619 1,607 1,704 1,694 5,006
Total revenues $11,445 $12,275 $12,398 $13,837 $49,954 $12,453 $12,941 $13,280 $38,674
(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, 2023 and 2022 for the fiscal 2024 and fiscal 2023 constant currency growth rate calculations presented,
respectively, rather than the actual exchange rates in effect during the respective periods.
APPENDIX A
ORACLE CORPORATION
Q3 FISCAL 2024 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:
-- Stock-based compensation expenses: We have excluded the effect of
stock-based compensation expenses from our non-GAAP operating expenses,
income tax effects 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,
income tax effects 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, income tax effects 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 consisted of
personnel related costs for transitional and certain other employees,
certain business combination adjustments including certain adjustments
after the measurement period has ended, and certain other operating
items, net. Restructuring expenses consisted 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 may
diminish over time with respect to past acquisitions and/or strategic
initiatives, we generally will incur certain of these expenses in
connection with any future acquisitions and/or strategic initiatives.
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SOURCE Oracle Corporation
