New Software License Revenues Up 14%, Total GAAP Software Revenues Up 20%
(Logo: http://www.newscom.com/cgi-bin/prnh/20020718/ORCLLOGO)
First quarter non-GAAP earnings per share were up 32% to $0.29, and non- GAAP net income was up 32% to $1.5 billion, compared to the same quarter last year. Non-GAAP total revenues were up 18% to $5.4 billion. Non-GAAP total software revenues were up 21% to $4.3 billion and non-GAAP software license updates and product support revenues were up 24% to $3.0 billion.
"Our non-GAAP EPS grew 32% in Q1, and this comes after the 27% growth in Q1 of last year," said Oracle President and CFO, Safra Catz. "We also delivered a Q1 non-GAAP operating margin of 40%, our highest ever in Q1, up 350 basis points from the quarter a year ago. We continue to deliver consistent earnings growth well ahead of plan."
"Oracle has once again increased its database market share according to the latest Gartner research report," said Oracle CEO, Larry Ellison. "Oracle's 49% market share in the survey year 2007 was greater than the market share of the next 4 vendors combined: IBM, Microsoft, Teradata, and Sybase."
"More-and-more Oracle database customers are buying our integrated suite of standards based Fusion middleware to modernize their computing environments," said Charles Phillips, Oracle President. "The Oracle product line of database, middleware and applications is by far the most extensive in the enterprise software industry. That enables us to offer a broader range of solutions than any other software vendor."
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 web link is visible.
About Oracle
Oracle is the world's largest enterprise software company. For more information about Oracle, including supplemental financial information, please visit http://www.oracle.com/investor or call Investor Relations at (650) 506-4073.
Trademarks
Oracle is a registered trademark of Oracle Corporation and/or its affiliates. Other names may be trademarks of their respective owners.
"Safe Harbor" Statement: Statements in this press release relating to Oracle's future plans and prospects are "forward-looking statements" and are subject to material risks and uncertainties. Many factors could affect our current expectations and our actual results, and could cause actual results to differ materially. We presently consider the following to be among the important factors that could cause actual results to differ materially from expectations: (1) Economic, political and market conditions could adversely affect our revenue growth and profitability through reductions in IT budgets and expenditures. (2) We may fail to achieve our financial forecasts due to such factors as delays or size reductions in transactions, fewer large transactions in a particular quarter, unanticipated fluctuations in currency exchange rates, delays in delivery of new products or releases, or a decline in our renewal rates for software license updates and product support. (3) We cannot assure market acceptance of new products or new versions of existing or acquired products. (4) We have an active acquisition program and our acquisitions may not be successful, may involve unanticipated costs or other integration issues, or may disrupt our existing operations. (5) Periodic changes to our pricing model and sales organization could temporarily disrupt operations and cause a decline or delay in sales. (6) Intense competitive forces demand rapid technological advances and frequent new product introductions, and could require us to reduce prices. A detailed discussion of these factors and other risks that affect our business is contained in our SEC filings, including our most recent reports on Form 10-K and Form 10-Q, particularly under the heading "Risk Factors." Copies of these filings are available online from the SEC or by contacting Oracle Corporation's Investor Relations Department at (650) 506-4073 or by clicking on SEC Filings on Oracle's Investor Relations website at http://www.oracle.com/investor. All information set forth in this release is current as of September 18, 2008. Oracle undertakes no duty to update any statement in light of new information or future events.
ORACLE CORPORATION
Q1 FISCAL 2009 FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ in millions, except per share data)
Three Months Ended August 31,
-------------------------------
% Increase
(Decrease)
% in
% of % of Increase Constant
2008 Revenues 2007 Revenues in US $ Currency (1)
-------------------------------------------------------
REVENUES
New software
licenses $1,237 23% $1,087 24% 14% 10%
Software license
updates and
product support 2,935 55% 2,383 53% 23% 18%
--------------------------------
Software
Revenues 4,172 78% 3,470 77% 20% 16%
--------------------------------
Services 1,159 22% 1,059 23% 9% 6%
--------------------------------
Total
Revenues 5,331 100% 4,529 100% 18% 14%
--------------------------------
OPERATING EXPENSES
Sales and
marketing 1,112 21% 974 22% 14% 10%
Software license
updates and
product support 282 5% 228 5% 24% 19%
Cost of services 1,026 19% 931 21% 10% 7%
Research and
development 708 13% 652 14% 9% 8%
General and
administrative 206 4% 195 4% 5% 3%
Amortization of
intangible assets 413 8% 285 6% 45% 45%
Acquisition
related and other 49 1% 47 1% 6% 8%
Restructuring 14 0% - 0% * *
--------------------------------
Total
Operating
Expenses 3,810 71% 3,312 73% 15% 12%
--------------------------------
OPERATING INCOME 1,521 29% 1,217 27% 25% 18%
Interest expense (159) (3%) (94) (2%) 71% 71%
Non-operating
income, net 82 1% 77 2% 7% 4%
--------------------------------
INCOME BEFORE
PROVISION FOR
INCOME TAXES 1,444 27% 1,200 27% 20% 13%
--------------------------------
Provision for
income taxes 367 7% 360 8% 2% (1%)
--------------------------------
NET INCOME $1,077 20% $840 19% 28% 19%
================================
EARNINGS PER
SHARE:
Basic $0.21 $0.16
Diluted $0.21 $0.16
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING:
Basic 5,152 5,110
Diluted 5,235 5,217
(1) We compare the percent change in the results from one period to
another period using constant currency disclosure. We present
constant currency information to provide a framework for assessing
how our underlying businesses performed excluding the effect of
foreign currency rate fluctuations. To present this information,
current and comparative prior period results for entities reporting
in currencies other than United States dollars are converted into
United States dollars at the exchange rate in effect on May 31,
2008, which was the last day of our prior fiscal year, rather than
the actual exchange rates in effect during the respective periods.
The United States dollar weakened relative to major international
currencies in the three months ended August 31, 2008 compared with
the corresponding prior year period, contributing 4 percentage
points of revenue, 3 percentage points of operating expense and 7
percentage points of operating income growth.
* Not meaningful
ORACLE CORPORATION
Q1 FISCAL 2009 FINANCIAL RESULTS
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)
($ in millions, except per share data)
% Increase
Three Months Ended August 31, in US $
-----------------------------------------------------------
2008 2007
2008 Non- 2007 Non- Non-
GAAP Adj. GAAP GAAP Adj. GAAP GAAP GAAP
-----------------------------------------------------------
TOTAL
REVENUES (2) $5,331 $91 $5,422 $4,529 $64 $4,593 18% 18%
TOTAL
SOFTWARE
REVENUES (2) $4,172 $91 $4,263 $3,470 $64 $3,534 20% 21%
New software
licenses 1,237 - 1,237 1,087 - 1,087 14% 14%
Software
license
updates and
product
support (2) 2,935 91 3,026 2,383 64 2,447 23% 24%
TOTAL
OPERATING
EXPENSES $3,810 $(562) $3,248 $3,312 $(401) $2,911 15% 12%
Stock-based
compensation
(3) 86 (86) - 69 (69) - 25% *
Amortization
of intangible
assets (4) 413 (413) - 285 (285) - 45% *
Acquisition
related and
other 49 (49) - 47 (47) - 6% *
Restructuring 14 (14) - - - - * *
OPERATING
INCOME $1,521 $653 $2,174 $1,217 $465 $1,682 25% 29%
OPERATING
MARGIN % 29% 40% 27% 37% 6% 10%
INCOME TAX
EFFECTS (5) $367 $186 $553 $360 $140 $500 2% 11%
NET INCOME $1,077 $467 $1,544 $840 $325 $1,165 28% 32%
DILUTED
EARNINGS PER
SHARE $0.21 $0.29 $0.16 $0.22 28% 32%
DILUTED
WEIGHTED
AVERAGE
COMMON
SHARES
OUTSTANDING 5,235 - 5,235 5,217 3 5,220 0% 0%
(1) This presentation includes non-GAAP measures. Our non-GAAP measures
are not meant to be considered in isolation or as a substitute for
comparable GAAP measures, and should be read only in conjunction with
our consolidated financial statements prepared in accordance with
GAAP. For a detailed explanation of the adjustments made to
comparable GAAP measures, the reasons why management uses these
measures, the usefulness of these measures and the material
limitations on the usefulness of these measures, please see Appendix
A.
(2) As of August 31, 2008, approximately $221 million in estimated
revenues related to assumed support contracts will not be recognized
in fiscal 2009 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, 2008 August 31, 2007
---------------------------- -------------------------
GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP
---------------------------- -------------------------
Sales and
marketing $19 $(19) $- $13 $(13) $-
Software license
updates and
product support 3 (3) - 4 (4) -
Cost of services 3 (3) - 4 (4) -
Research and
development 37 (37) - 28 (28) -
General and
administrative 24 (24) - 20 (20) -
------ ------ ------ ------ ------ ------
Subtotal 86 (86) - 69 (69) -
------ ------ ------ ------ ------ ------
Acquisition
related and
other 5 (5) - 32 (32) -
------ ------ ------ ------ ------ ------
Total stock-
based
compensation $91 $(91) $- $101 $(101) $-
====== ====== ====== ====== ====== ======
(4) Estimated future annual amortization expense related to intangible
assets as of August 31, 2008 is as follows:
Remainder of Fiscal 2009 $1,271
Fiscal 2010 1,578
Fiscal 2011 1,288
Fiscal 2012 1,143
Fiscal 2013 1,013
Fiscal 2014 827
Thereafter 1,033
------
Total $8,153
======
(5) Income tax effects were calculated reflecting an effective GAAP tax
rate of 25.4% and 30.0% in the first quarter of fiscal 2009 and 2008,
respectively, and an effective non-GAAP tax rate of 26.4% and 30.0% in
the first quarter of fiscal 2009 and 2008, respectively. Our non-GAAP
tax rate in the first quarter of fiscal 2009 excludes the effect of an
adjustment to our non-current deferred tax liability associated with
acquired intangible assets.
* Not meaningful
ORACLE CORPORATION
Q1 FISCAL 2009 FINANCIAL RESULTS
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in millions)
August 31, May 31,
2008 2008
------------------------
ASSETS
Current Assets:
Cash and cash equivalents $8,553 $8,262
Marketable securities 4,468 2,781
Trade receivables, net 3,260 5,127
Deferred tax assets 905 853
Prepaid expenses and other current assets 665 1,080
------------------------
Total Current Assets 17,851 18,103
Non-Current Assets:
Property, net 1,886 1,688
Intangible assets, net 8,153 8,395
Goodwill 18,260 17,991
Other assets 1,103 1,091
------------------------
Total Non-Current Assets 29,402 29,165
------------------------
TOTAL ASSETS $47,253 $47,268
========================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable, current and other current
borrowings $1,001 $1,001
Accounts payable 402 383
Accrued compensation and related benefits 1,138 1,770
Deferred revenues 5,017 4,492
Other current liabilities 1,689 2,383
------------------------
Total Current Liabilities 9,247 10,029
Non-Current Liabilities:
Notes payable and other non-current
borrowings 10,236 10,235
Income taxes payable 1,638 1,566
Deferred tax liabilities 1,214 1,218
Other non-current liabilities 1,102 1,195
------------------------
Total Non-Current Liabilities 14,190 14,214
Stockholders' Equity 23,816 23,025
------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $47,253 $47,268
========================
ORACLE CORPORATION
Q1 FISCAL 2009 FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in millions)
Three Months Ended
August 31,
2008 2007
------------------------
Cash Flows From Operating Activities:
Net income $1,077 $840
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 64 67
Amortization of intangible assets 413 285
Deferred income taxes (53) 24
Minority interests in income 16 12
Stock-based compensation 91 101
Tax benefit on the exercise of stock options 101 129
Excess tax benefits on the exercise of stock
options (65) (82)
In-process research and development 4 7
Other gains, net (1) -
Changes in operating assets and liabilities,
net of effects from acquisitions:
Decrease in trade receivables, net 1,812 1,381
Decrease in prepaid expenses and other
assets 397 161
Decrease in accounts payable and other
liabilities (906) (679)
Decrease in income taxes payable (361) (301)
Increase in deferred revenues 651 756
------------------------
Net cash provided by operating activities 3,240 2,701
------------------------
Cash Flows From Investing Activities:
Purchases of marketable securities and other
investments (3,188) (896)
Proceeds from maturities and sales of
marketable securities and other investments 1,420 561
Acquisitions, net of cash acquired (395) (546)
Capital expenditures (323) (87)
------------------------
Net cash used for investing activities (2,486) (968)
------------------------
Cash Flows From Financing Activities:
Payments for repurchases of common stock (500) (530)
Proceeds from issuances of common stock 280 317
Repayments of borrowings (4) (1,361)
Excess tax benefits on the exercise of stock
options 65 82
Distributions to minority interests (30) (28)
------------------------
Net cash used for financing activities (189) (1,520)
------------------------
Effect of exchange rate changes on cash and cash
equivalents (274) 24
------------------------
Net increase in cash and cash equivalents 291 237
------------------------
Cash and cash equivalents at beginning of period 8,262 6,218
------------------------
Cash and cash equivalents at end of period $8,553 $6,455
========================
ORACLE CORPORATION
Q1 FISCAL 2009 FINANCIAL RESULTS
FREE CASH FLOW - TRAILING 4-QUARTERS (1)
($ in millions)
Fiscal 2008 Fiscal 2009
----------------------------------------------------------
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
----------------------------------------------------------
GAAP
Operating
Cash Flow $6,598 $6,957 $7,322 $7,402 $7,941
Capital
Expenditures
(2) (357) (369) (331) (243) (479)
----------------------------------------------------------
Free Cash Flow $6,241 $6,588 $6,991 $7,159 $7,462
==========================================================
% Growth over
prior year 40% 50% 48% 38% 20%
----------------------------------------------------------
GAAP Net Income $4,444 $4,781 $5,088 $5,521 $5,758
Free Cash Flow
as a % of Net
Income 140% 138% 137% 130% 130%
(1) To supplement our statements of cash flows presented on a GAAP basis,
we use non-GAAP measures of cash flows on a trailing 4-quarter basis
to analyze cash flow generated from operations. We believe free cash
flow is also useful as one of the bases for comparing our performance
with our competitors. The presentation of non-GAAP free cash flow is
not meant to be considered in isolation or as an alternative to net
income as an indicator of our performance, or as an alternative to
cash flows from operating activities as a measure of liquidity.
(2) Represents capital expenditures as reported in cash flows from
investing activities on our cash flow statements presented in
accordance with GAAP.
ORACLE CORPORATION
Q1 FISCAL 2009 FINANCIAL RESULTS
SUPPLEMENTAL ANALYSIS OF GAAP REVENUES AND HEADCOUNT (1)
($ in millions)
Fiscal 2008
Q1 Q2 Q3 Q4 TOTAL
--------------------------------------------------------
REVENUES
New software
licenses $1,087 $1,668 $1,616 $3,144 $7,515
Software
license
updates and
product
support 2,383 2,491 2,624 2,830 10,328
--------------------------------------------------------
Software
Revenues 3,470 4,159 4,240 5,974 17,843
Consulting 801 877 843 957 3,477
On Demand 158 167 174 194 694
Education 100 110 92 114 416
--------------------------------------------------------
Services
Revenues 1,059 1,154 1,109 1,265 4,587
Total
Revenues $4,529 $5,313 $5,349 $7,239 $22,430
========================================================
AS REPORTED
REVENUE GROWTH
RATES
New software
licenses 35% 38% 16% 27% 28%
Software license
updates and
product support 23% 24% 25% 25% 24%
Software
Revenues 26% 29% 21% 26% 26%
Consulting 25% 23% 21% 17% 21%
On Demand 27% 20% 23% 29% 25%
Education 24% 17% 16% 9% 16%
Services
Revenues 25% 22% 21% 18% 21%
Total
Revenues 26% 28% 21% 24% 25%
CONSTANT CURRENCY
GROWTH RATES
New software
licenses 32% 31% 9% 20% 21%
Software license
updates and
product support 19% 18% 18% 18% 18%
Software
Revenues 23% 23% 15% 19% 19%
Consulting 20% 15% 14% 11% 15%
On Demand 23% 15% 17% 23% 19%
Education 20% 10% 9% 2% 10%
Services
Revenues 21% 15% 14% 12% 15%
Total
Revenues 22% 21% 15% 18% 19%
GEOGRAPHIC REVENUES
REVENUES
Americas $2,375 $2,674 $2,707 $3,574 $11,330
Europe,
Middle East
& Africa 1,530 1,865 1,871 2,679 7,945
Asia Pacific 624 774 771 986 3,155
Total
Revenues $4,529 $5,313 $5,349 $7,239 $22,430
========================================================
HEADCOUNT (2)
GEOGRAPHIC AREA
Americas 30,455 30,654 30,624 32,608
Europe,
Middle East
& Africa 15,985 16,140 16,383 17,110
Asia Pacific 31,212 32,855 33,212 34,515
-------------------------------------------
Total
Company 77,652 79,649 80,219 84,233
===========================================
Fiscal 2009
--------------------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
--------------------------------------------------------
REVENUES
New software
licenses $1,237 $1,237
Software
license
updates and
product
support 2,935 2,935
--------------------------------------------------------
Software
Revenues 4,172 4,172
Consulting 865 865
On Demand 195 195
Education 99 99
--------------------------------------------------------
Services
Revenues 1,159 1,159
--------------------------------------------------------
Total
Revenues $5,331 $5,331
========================================================
AS REPORTED
REVENUE GROWTH
RATES
New software
licenses 14% 14%
Software license
updates and
product
support 23% 23%
Software
Revenues 20% 20%
Consulting 8% 8%
On Demand 23% 23%
Education (2%) (2%)
Services
Revenues 9% 9%
Total
Revenues 18% 18%
CONSTANT CURRENCY
GROWTH RATES
New software
licenses 10% 10%
Software license
updates and
product
support 18% 18%
Software
Revenues 16% 16%
Consulting 5% 5%
On Demand 19% 19%
Education (6%) (6%)
Services
Revenues 6% 6%
Total
Revenues 14% 14%
--------------------------------------------------------
GEOGRAPHIC REVENUES
REVENUES
Americas $2,687 $2,687
Europe,
Middle East
& Africa 1,830 1,830
Asia Pacific 814 814
--------------------------------------------------------
Total
Revenues $5,331 $5,331
========================================================
HEADCOUNT (2)
GEOGRAPHIC AREA
Americas 32,993 32,993
Europe,
Middle East
& Africa 17,096 17,096
Asia Pacific 35,099 35,099
--------------------------------------------------------
Total
Company 85,188 85,188
========================================================
(1) The sum of the quarterly financial information may vary from year-to-
date financial information due to rounding.
(2) Headcount has increased primarily due to our acquisitions.
ORACLE CORPORATION
Q1 FISCAL 2009 FINANCIAL RESULTS
SUPPLEMENTAL TOTAL SOFTWARE PRODUCT REVENUE ANALYSIS (1)
($ in millions)
Fiscal 2008
--------------------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
--------------------------------------------------------
APPLICATIONS
REVENUES
New software
licenses $376 $553 $451 $989 $2,369
Software license
updates and
product support 886 929 974 1,044 3,833
--------------------------------------------------------
Software
Revenues $1,262 $1,482 $1,425 $2,033 $6,202
========================================================
AS REPORTED
GROWTH RATES
New software
licenses 65% 63% 7% 36% 38%
Software license
updates and
product support 26% 28% 27% 25% 26%
Software
Revenues 36% 39% 20% 30% 31%
CONSTANT CURRENCY
GROWTH RATES
New software
licenses 61% 56% 2% 31% 33%
Software license
updates and
product support 22% 21% 20% 19% 20%
Software
Revenues 32% 32% 14% 24% 25%
DATABASE &
MIDDLEWARE REVENUES
New software
licenses $711 $1,115 $1,165 $2,155 $5,146
Software license
updates and
product support 1,497 1,562 1,650 1,786 6,495
--------------------------------------------------------
Software
Revenues $2,208 $2,677 $2,815 $3,941 $11,641
========================================================
AS REPORTED
GROWTH RATES
New software
licenses 23% 29% 20% 23% 24%
Software license
updates and
product support 21% 22% 23% 24% 23%
Software
Revenues 22% 25% 22% 23% 23%
CONSTANT CURRENCY
GROWTH RATES
New software
licenses 20% 22% 13% 15% 17%
Software license
updates and
product support 17% 16% 17% 17% 17%
Software
Revenues 18% 18% 15% 16% 17%
Fiscal 2009
--------------------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
--------------------------------------------------------
APPLICATIONS
REVENUES
New software
licenses $331 $331
Software license
updates and
product support 1,043 1,043
--------------------------------------------------------
Software
Revenues $1,374 $1,374
========================================================
AS REPORTED
GROWTH RATES
New software
licenses (12%) (12%)
Software license
updates and
product support 18% 18%
Software
Revenues 9% 9%
CONSTANT CURRENCY
GROWTH RATES
New software
licenses (14%) (14%)
Software license
updates and
product support 13% 13%
Software
Revenues 5% 5%
DATABASE &
MIDDLEWARE REVENUES
New software
licenses $906 $906
Software license
updates and
product support 1,892 1,892
--------------------------------------------------------
Software
Revenues $2,798 $2,798
========================================================
AS REPORTED
GROWTH RATES
New software
licenses 27% 27%
Software license
updates and
product support 26% 26%
Software
Revenues 27% 27%
CONSTANT CURRENCY
GROWTH RATES
New software
licenses 23% 23%
Software license
updates and
product support 22% 22%
Software
Revenues 22% 22%
(1) The sum of the quarterly financial information may vary from year-to-
date financial information due to rounding.
ORACLE CORPORATION
Q1 FISCAL 2009 FINANCIAL RESULTS
SUPPLEMENTAL GEOGRAPHIC NEW SOFTWARE LICENSE REVENUE ANALYSIS (1) (2)
($ in millions)
Fiscal 2008
--------------------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
--------------------------------------------------------
AMERICAS
Database &
Middleware $286 $438 $476 $919 $2,119
Applications 199 306 252 552 1,310
--------------------------------------------------------
New Software
License
Revenues $485 $744 $728 $1,471 $3,429
========================================================
AS REPORTED
GROWTH RATES
Database &
Middleware 23% 32% 24% 16% 22%
Applications 58% 57% 1% 33% 33%
New Software
License
Revenues 35% 41% 15% 22% 26%
CONSTANT CURRENCY
GROWTH RATES
Database &
Middleware 22% 29% 21% 13% 19%
Applications 57% 54% (1%) 32% 31%
New Software
License
Revenues 34% 38% 12% 20% 23%
EUROPE / MIDDLE
EAST / AFRICA
Database &
Middleware $253 $420 $446 $881 $2,000
Applications 123 174 141 317 755
--------------------------------------------------------
New Software
License
Revenues $376 $594 $587 $1,198 $2,755
========================================================
AS REPORTED
GROWTH RATES
Database &
Middleware 38% 23% 23% 42% 33%
Applications 77% 72% 14% 41% 46%
New Software
License
Revenues 49% 34% 21% 42% 36%
CONSTANT CURRENCY
GROWTH RATES
Database &
Middleware 30% 12% 11% 27% 20%
Applications 69% 58% 6% 31% 35%
New Software
License
Revenues 41% 23% 10% 28% 24%
ASIA PACIFIC
Database &
Middleware $155 $244 $231 $341 $971
Applications 54 73 58 120 304
--------------------------------------------------------
New Software
License
Revenues $209 $317 $289 $461 $1,275
========================================================
AS REPORTED
GROWTH RATES
Database &
Middleware 4% 32% 8% 6% 12%
Applications 67% 66% 18% 37% 43%
New Software
License
Revenues 15% 39% 10% 13% 18%
CONSTANT CURRENCY
GROWTH RATES
Database &
Middleware 1% 26% 0% (1%) 5%
Applications 60% 57% 5% 27% 33%
New Software
License
Revenues 12% 32% 1% 5% 11%
TOTAL COMPANY
Database &
Middleware $694 $1,102 $1,153 $2,141 $5,090
Applications 376 553 451 989 2,369
--------------------------------------------------------
New Software
License
Revenues $1,070 $1,655 $1,604 $3,130 $7,459
========================================================
AS REPORTED
GROWTH RATES
Database &
Middleware 23% 28% 20% 23% 24%
Applications 65% 63% 7% 36% 38%
New Software
License
Revenues 35% 38% 16% 27% 28%
CONSTANT CURRENCY
GROWTH RATES
Database &
Middleware 19% 21% 12% 16% 17%
Applications 61% 56% 2% 31% 33%
New Software
License
Revenues 31% 31% 9% 20% 21%
Fiscal 2009
--------------------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
--------------------------------------------------------
AMERICAS
Database &
Middleware $342 $342
Applications 182 182
--------------------------------------------------------
New Software
License
Revenues $524 $524
========================================================
AS REPORTED
GROWTH RATES
Database &
Middleware 20% 20%
Applications (9%) (9%)
New Software
License
Revenues 8% 8%
CONSTANT CURRENCY
GROWTH RATES
Database &
Middleware 18% 18%
Applications (10%) (10%)
New Software
License
Revenues 7% 7%
EUROPE / MIDDLE
EAST / AFRICA
Database &
Middleware $321 $321
Applications 94 94
--------------------------------------------------------
New Software
License
Revenues $415 $415
========================================================
AS REPORTED
GROWTH RATES
Database &
Middleware 27% 27%
Applications (23%) (23%)
New Software
License
Revenues 10% 10%
CONSTANT CURRENCY
GROWTH RATES
Database &
Middleware 19% 19%
Applications (26%) (26%)
New Software
License
Revenues 5% 5%
ASIA PACIFIC
Database &
Middleware $225 $225
Applications 55 55
--------------------------------------------------------
New Software
License
Revenues $280 $280
========================================================
AS REPORTED
GROWTH RATES
Database &
Middleware 46% 46%
Applications 1% 1%
New Software
License
Revenues 34% 34%
CONSTANT CURRENCY
GROWTH RATES
Database &
Middleware 39% 39%
Applications (1%) (1%)
New Software
License
Revenues 29% 29%
TOTAL COMPANY
Database &
Middleware $888 $888
Applications 331 331
--------------------------------------------------------
New Software
License
Revenues $1,219 $1,219
========================================================
AS REPORTED
GROWTH RATES
Database &
Middleware 28% 28%
Applications (12%) (12%)
New Software
License
Revenues 14% 14%
CONSTANT CURRENCY
GROWTH RATES
Database &
Middleware 23% 23%
Applications (14%) (14%)
New Software
License
Revenues 10% 10%
(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 2009 FINANCIAL RESULTS
EXPLANATION OF NON-GAAP MEASURES
To supplement our financial results presented on a GAAP basis, we use the non-GAAP measures indicated in the tables, which exclude certain business combination accounting entries and expenses related to acquisitions, as well as other significant expenses including stock-based compensation, that we believe are helpful in understanding our past financial performance and our future results. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non- GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Compensation of our executives is based in part on the performance of our business based on these non-GAAP measures. Our non-GAAP financial measures reflect adjustments based on the following items, as well as the related income tax effects:
0 Support deferred revenue: Business combination accounting rules require us to account for the fair value of support contracts assumed in connection with our acquisitions. Because these are typically one-year contracts, our GAAP revenues for the one year period subsequent to our acquisition of a business do not reflect the full amount of software license updates and product support revenues on assumed support contracts that would have otherwise been recorded by the acquired entity. The non-GAAP adjustment is intended to reflect the full amount of such revenues. We believe this adjustment is useful to investors as a measure of the ongoing performance of our business because we have historically experienced high renewal rates on support contracts, although we cannot be certain that customers will renew these contracts.
0 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.
0 Amortization of intangible assets expenses: We have excluded the effect of amortization of intangibles expenses from our non-GAAP operating expenses and net income measures. Amortization of intangible assets expenses 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.
0 Acquisition related and other expenses, and restructuring expenses: We incurred significant expenses in connection with our acquisitions and also incurred certain other operating expenses or income, which we generally would not have otherwise incurred in the periods presented as a part of our continuing operations. Acquisition related and other expenses consist of in- process research and development expenses, personnel related costs for transitional employees, stock-based compensation expenses (in addition to the stock-based compensation expenses described above), integration related professional services, certain business combination contingency adjustments after the purchase price allocation period has ended, and certain other operating expenses, net. Substantially all of the stock-based compensation expenses included in acquisition related and other expenses resulted from unvested options assumed in acquisitions whose vesting was fully accelerated upon termination of the employees pursuant to the original terms of those options. Restructuring expenses consist of Oracle employee severance and other exit costs. We believe it is useful for investors to understand the effects of these items on our total operating expenses. Although acquisition related expenses and restructuring expenses are not recurring with respect to past acquisitions, we generally will incur these expenses in connection with any future acquisitions.
Web site: http://www.oracle.com/