ORCL
$55.23
Oracle
($.05)
(.09%)
Earnings Details
Quarter May 2020
Tuesday, June 16, 2020 4:02:00 PM
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Summary

Oracle Beats

Oracle (ORCL) reported Quarter May 2020 earnings of $1.22 per share on revenue of $10.4 billion. The consensus earnings estimate was $1.16 per share on revenue of $10.9 billion. The Earnings Whisper number was $1.22 per share. Revenue fell 6.3% compared to the same quarter a year ago.

The company said during its conference call it expects first quarter non-GAAP earnings of $0.84 to $0.88 per share on revenue of $9.03 billion to $9.22 billion. The current consensus earnings estimate is $0.85 per share on revenue of $9.11 billion for the quarter ending August 31, 2020.

Oracle Corporation develops, manufactures, markets, hosts and supports database and middleware software, application software, cloud infrastructure, hardware system including computer server, storage and networking products and related services.

Results
Reported Earnings
$1.22
Earnings Whisper
$1.22
Consensus Estimate
$1.16
Reported Revenue
$10.44 Bil
Revenue Estimate
$10.85 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Oracle Announces Fiscal 2020 Fourth Quarter and Fiscal Full Year Financial Results

REDWOOD SHORES, Calif., June 16, 2020 /PRNewswire/ -- Oracle Corporation (NYSE: ORCL) today announced fiscal 2020 Q4 and fiscal 2020 full year results. Total quarterly revenues were $10.4 billion, down 6% YoY and down 4% in constant currency compared to Q4 last year. Cloud services and license support revenues were $6.8 billion, up 1% YoY and 3% in constant currency. Cloud license and on-premise license revenues were $2.0 billion.

Q4 GAAP operating income was up 1% YoY to $4.3 billion, and GAAP operating margin was 41%. Non-GAAP operating income was down 2% YoY to $5.1 billion, and non-GAAP operating margin was 49%. GAAP net income was $3.1 billion, and non-GAAP net income was $3.8 billion. GAAP earnings per share was $0.99, while non-GAAP earnings per share was up 3% YoY to $1.20.

Short-term deferred revenues were $8.0 billion. Operating cash flow was $13.1 billion during the trailing twelve months.

For fiscal 2020, total revenues were $39.1 billion, down 1% YoY and flat in constant currency. Cloud services and license support revenues were $27.4 billion, up 3% YoY and 4% in constant currency. Cloud license and on-premise license revenues were $5.1 billion.

Fiscal 2020 GAAP operating income was $13.9 billion, and GAAP operating margin was 36%. Non-GAAP operating income was $17.4 billion, and non-GAAP operating margin was 44%. GAAP net income was $10.1 billion, while non-GAAP net income was $12.7 billion. GAAP earnings per share increased 4% to $3.08, while non-GAAP earnings per share was up 9% to $3.85.

"In Q4, non-GAAP earnings per share grew 5% in constant currency driven by strong performances in both our cloud infrastructure and cloud applications businesses," said Oracle CEO, Safra Catz. "Leading the way was our Fusion Cloud ERP Suite that grew 35% in constant currency, and our Fusion Cloud HCM Suite grew 29% in constant currency. Our overall business did remarkably well considering the pandemic, but our results would have been even better except for customers in the hardest-hit industries that we serve such as hospitality, retail, and transportation postponing some of their purchases. Still, for the third year in a row, we delivered double-digit constant currency earnings per share growth in FY20."

"In Q4, we launched a vastly improved version of our Exadata Cloud@Customer service," said Oracle Chairman and CTO, Larry Ellison. "Exadata Cloud@Customer now enables our existing on-premise database customers to run the Oracle Autonomous Database in their own datacenter; previously, the Oracle Autonomous Database was only available in Oracle's Gen2 Public Cloud.  Enabling all our on-premise database customers to upgrade and run Oracle's latest and best database technology in their own data center should dramatically accelerate the rate of adoption of the Oracle Autonomous Database…especially by our largest customers including banks and governments that are not currently planning to move their largest and most critical systems to a public cloud."

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 July 15, 2020, with a payment date of July 28, 2020.

Q4 Fiscal 2020 Earnings Conference Call and Webcast

Oracle will hold a conference call and webcast today to discuss these results at 2:00 p.m. Pacific. You may listen to the call by dialing (816) 287-5563, Passcode: 425392. To access the live webcast, please visit the Oracle Investor Relations website at http://www.oracle.com/investor. In addition, Oracle's Q4 results and fiscal 2020 financial tables are available on the Oracle Investor Relations website.

A replay of the conference call will also be available by dialing (855) 859-2056 or (404) 537-3406, Passcode: 1424537.

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 the rate of adoption of our Autonomous Database, 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 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 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 consumer 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) Our international sales and operations subject us to additional risks that can adversely affect our operating results. (9) 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 June 16, 2020. Oracle undertakes no duty to update any statement in light of new information or future events.

 

ORACLE  CORPORATION
Q4 FISCAL 2020 FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ in millions, except per share data)












Three Months Ended May 31,


% Increase




% Increase

(Decrease)





% of 


% of 

(Decrease)

in Constant




2020

Revenues

2019

Revenues

in US $

Currency (1)


REVENUES









Cloud services and license support 

$              6,845

66%

$              6,799

61%

1%

3%



Cloud license and on-premise license

1,959

19%

2,520

23%

(22%)

(21%)



Hardware

901

8%

994

9%

(9%)

(7%)



Services

735

7%

823

7%

(11%)

(8%)



      Total revenues

10,440

100%

11,136

100%

(6%)

(4%)


OPERATING EXPENSES









Cloud services and license support 

1,012

10%

975

9%

4%

6%



Hardware

288

3%

362

3%

(20%)

(19%)



Services

669

6%

726

7%

(8%)

(5%)



Sales and marketing

1,959

19%

2,318

21%

(15%)

(13%)



Research and development 

1,479

14%

1,562

14%

(5%)

(4%)



General and administrative

278

3%

329

3%

(16%)

(13%)



Amortization of intangible assets

366

3%

424

4%

(14%)

(13%)



Acquisition related and other

11

0%

15

0%

(23%)

(18%)



Restructuring

69

1%

168

1%

(59%)

(58%)



      Total operating expenses 

6,131

59%

6,879

62%

(11%)

(9%)


OPERATING INCOME 

4,309

41%

4,257

38%

1%

3%



Interest expense

(580)

(6%)

(525)

(4%)

10%

10%



Non-operating income, net

(33)

0%

134

1%

(125%)

(123%)


INCOME BEFORE PROVISION FOR INCOME TAXES

3,696

35%

3,866

35%

(4%)

(2%)



Provision for income taxes

580

5%

126

1%

361%

374%


NET INCOME 

$              3,116

30%

$              3,740

34%

(17%)

(14%)











EARNINGS PER SHARE:









Basic

$                1.01


$                1.10






Diluted

$                0.99


$                1.07





WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:









Basic

3,091


3,389






Diluted

3,162


3,495


















































(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, 2019, 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 May 31, 2020 compared with the corresponding prior year period decreased our revenues by 2 percentage points, operating expenses by 2 percentage points and operating income by 2 percentage points.











 

ORACLE  CORPORATION


Q4 FISCAL 2020 FINANCIAL RESULTS


RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1) 


($ in millions, except per share data)


























Three Months Ended May 31,


% Increase (Decrease)
in US $

% Increase (Decrease) in
Constant Currency (2) 





2020




2020



2019




2019


GAAP

Non-GAAP

GAAP

Non-GAAP





GAAP


Adj.


Non-GAAP



GAAP


Adj.


Non-GAAP
























TOTAL REVENUES


$     10,440


$               1


$     10,441



$     11,136


$               3


$     11,139


(6%)

(6%)

(4%)

(4%)



     Cloud services and license support


6,845


1


6,846



6,799


3


6,802


1%

1%

3%

3%























TOTAL OPERATING EXPENSES


$       6,131


$        (832)


$       5,299



$       6,879


$     (1,001)


$       5,878


(11%)

(10%)

(9%)

(8%)



     Stock-based compensation (3)


386


(386)


-



394


(394)


-


(2%)

*

(2%)

*



     Amortization of intangible assets (4)


366


(366)


-



424


(424)


-


(14%)

*

(13%)

*



     Acquisition related and other


11


(11)


-



15


(15)


-


(23%)

*

(18%)

*



     Restructuring


69


(69)


-



168


(168)


-


(59%)

*

(58%)

*


OPERATING INCOME


$       4,309


$          833


$       5,142



$       4,257


$       1,004


$       5,261


1%

(2%)

3%

0%


OPERATING MARGIN %


41%




49%



38%




47%


305 bp.

202 bp.

307 bp.

192 bp.


INCOME TAX EFFECTS (5)


$          580


$          170


$          750



$          126


$          673


$          799


361%

(6%)

374%

(4%)


NET INCOME 


$       3,116


$          663


$       3,779



$       3,740


$          331


$       4,071


(17%)

(7%)

(14%)

(5%)


DILUTED EARNINGS PER SHARE


$         0.99




$         1.20



$         1.07




$         1.16


(8%)

3%

(5%)

5%


DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 


3,162


-


3,162



3,495


-


3,495


(10%)

(10%)

(10%)

(10%)












































(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, 2019, 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










May 31,
 2020



May 31, 2019










GAAP


Adj.


Non-GAAP



GAAP


Adj.


Non-GAAP








     Cloud services and license support


$             27


$           (27)


$              -



$             25


$           (25)


$              -








     Hardware


3


(3)


-



3


(3)


-








     Services


12


(12)


-



12


(12)


-








     Sales and marketing


69


(69)


-



82


(82)


-








     Research and development


254


(254)


-



231


(231)


-








     General and administrative


21


(21)


-



41


(41)


-








           Total stock-based compensation


$          386


$        (386)


$              -



$          394


$        (394)


$              -




























(4)

Estimated future annual amortization expense related to intangible assets as of May 31, 2020 was as follows:



     Fiscal 2021


$       1,351



















     Fiscal 2022


1,102



















     Fiscal 2023


679



















     Fiscal 2024


445



















     Fiscal 2025


126



















     Thereafter


35



















           Total intangible assets, net


$       3,738







































(5)

Income tax effects were calculated reflecting an effective GAAP tax rate of 15.7% and 3.3% in the fourth quarter of fiscal 2020 and 2019, respectively, and an effective non-GAAP tax rate of 16.6% and 16.4% in the fourth quarter of fiscal 2020 and 2019, respectively.The difference in our GAAP and non-GAAP tax rates in the fourth quarter of fiscal 2020 was 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. The difference in our GAAP and non-GAAP tax rates in the fourth quarter of fiscal 2019 was primarily due to a tax benefit arising from the increase of a deferred tax asset associated with a partial realignment of our legal structure; 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
FISCAL 2020 YEAR TO DATE FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ in millions, except per share data)












Year Ended May 31,


% Increase




% Increase

(Decrease)





% of 


% of 

(Decrease)

in Constant




2020

Revenues

2019

Revenues

in US $

Currency (1)


REVENUES









Cloud services and license support 

$            27,392

70%

$            26,707

68%

3%

4%



Cloud license and on-premise license

5,127

13%

5,855

15%

(12%)

(11%)



Hardware 

3,443

9%

3,704

9%

(7%)

(6%)



Services

3,106

8%

3,240

8%

(4%)

(3%)



      Total revenues

39,068

100%

39,506

100%

(1%)

0%


OPERATING EXPENSES









Cloud services and license support 

4,006

10%

3,782

10%

6%

7%



Hardware

1,116

3%

1,360

4%

(18%)

(17%)



Services

2,816

7%

2,853

7%

(1%)

0%



Sales and marketing

8,094

21%

8,509

22%

(5%)

(3%)



Research and development 

6,067

15%

6,026

15%

1%

1%



General and administrative

1,181

3%

1,265

3%

(7%)

(6%)



Amortization of intangible assets

1,586

4%

1,689

4%

(6%)

(6%)



Acquisition related and other

56

0%

44

0%

27%

29%



Restructuring

250

1%

443

1%

(44%)

(42%)



      Total operating expenses 

25,172

64%

25,971

66%

(3%)

(2%)


OPERATING INCOME 

13,896

36%

13,535

34%

3%

4%



Interest expense

(1,995)

(5%)

(2,082)

(5%)

(4%)

(4%)



Non-operating income, net 

162

0%

815

2%

(80%)

(80%)


INCOME BEFORE PROVISION FOR INCOME TAXES

12,063

31%

12,268

31%

(2%)

0%



Provision for income taxes 

1,928

5%

1,185

3%

63%

66%


NET INCOME 

$            10,135

26%

$            11,083

28%

(9%)

(7%)











EARNINGS PER SHARE:









Basic

$                3.16


$                3.05






Diluted

$                3.08


$                2.97





WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:









Basic

3,211


3,634






Diluted

3,294


3,732


















































(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, 2019, 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 year ended May 31, 2020 compared with the corresponding prior year period decreased our revenues by 1 percentage point, operating expenses by 1 percentage point and operating income by 1 percentage point. 











 

ORACLE  CORPORATION

 FISCAL 2020 YEAR TO DATE FINANCIAL RESULTS

RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1) 

($ in millions, except per share data)

























Year Ended May 31,


% Increase (Decrease)
in US $

% Increase (Decrease) in
Constant Currency (2) 




2020




2020



2019




2019


GAAP

Non-GAAP

GAAP

Non-GAAP





GAAP


Adj.


Non-GAAP



GAAP


Adj.


Non-GAAP
























TOTAL REVENUES


$     39,068


$               4


$     39,072



$     39,506


$             20


$     39,526


(1%)

(1%)

0%

0%



     Cloud services and license support


27,392


4


27,396



26,707


20


26,727


3%

3%

4%

4%























TOTAL OPERATING EXPENSES


$     25,172


$     (3,482)


$     21,690



$     25,971


$     (3,829)


$     22,142


(3%)

(2%)

(2%)

(1%)



     Stock-based compensation (3)


1,590


(1,590)


-



1,653


(1,653)


-


(4%)

*

(4%)

*



     Amortization of intangible assets (4)


1,586


(1,586)


-



1,689


(1,689)


-


(6%)

*

(6%)

*



     Acquisition related and other


56


(56)


-



44


(44)


-


27%

*

29%

*



     Restructuring


250


(250)


-



443


(443)


-


(44%)

*

(42%)

*


OPERATING INCOME


$     13,896


$       3,486


$     17,382



$     13,535


$       3,849


$     17,384


3%

0%

4%

1%


OPERATING MARGIN %


36%




44%



34%




44%


131 bp.

51 bp.

143 bp.

54 bp.


INCOME TAX EFFECTS (5)


$       1,928


$          939


$       2,867



$       1,185


$       1,795


$       2,980


63%

(4%)

66%

(2%)


NET INCOME 


$     10,135


$       2,547


$     12,682



$     11,083


$       2,054


$     13,137


(9%)

(3%)

(7%)

(2%)


DILUTED EARNINGS PER SHARE


$         3.08




$         3.85



$         2.97




$         3.52


4%

9%

6%

11%


DILUTED WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING


3,294


-


3,294



3,732


-


3,732


(12%)

(12%)

(12%)

(12%)












































(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, 2019, 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:






























Year Ended



Year Ended










May 31,
 2020



May 31,
 2019










GAAP


Adj.


Non-GAAP



GAAP


Adj.


Non-GAAP








     Cloud services and license support


$          110


$        (110)


$              -



$             99


$           (99)


$              -








     Hardware


11


(11)


-



10


(10)


-








     Services


54


(54)


-



49


(49)


-








     Sales and marketing


261


(261)


-



360


(360)


-








     Research and development


1,035


(1,035)


-



963


(963)


-








     General and administrative


119


(119)


-



172


(172)


-








           Total stock-based compensation


$       1,590


$     (1,590)


$              -



$       1,653


$     (1,653)


$              -




























(4)

Estimated future annual amortization expense related to intangible assets as of May 31, 2020 was as follows:



     Fiscal 2021


$       1,351



















     Fiscal 2022


1,102



















     Fiscal 2023


679



















     Fiscal 2024


445



















     Fiscal 2025


126



















     Thereafter


35



















           Total intangible assets, net


$       3,738







































(5)

Income tax effects were calculated reflecting an effective GAAP tax rate of 16.0% and 9.7% in fiscal 2020 and 2019, respectively, and an effective non-GAAP tax rate of 18.4% and 18.5% in fiscal 2020 and 2019, respectively. The difference between our GAAP and non-GAAP tax rates in fiscal 2020 was 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. The difference in our GAAP and non-GAAP tax rates in fiscal 2019 was primarily due to adjustments in our estimates for the one-time effects of the U.S. Tax Cuts and Jobs Act of 2017 (refer to Appendix A for additional information); a tax benefit arising from the increase of a deferred tax asset associated with a partial realignment of our legal structure; 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

FISCAL 2020 FINANCIAL RESULTS

CONDENSED CONSOLIDATED BALANCE SHEETS

($ in millions)











May 31,

May 31,




2020

2019

ASSETS





Current Assets:






Cash and cash equivalents

$               37,239


$               20,514



Marketable securities

5,818


17,313



Trade receivables, net

5,551


5,134



Prepaid expenses and other current assets

3,532


3,425




Total Current Assets

52,140


46,386


Non-Current Assets:






   Property, plant and equipment, net

6,244


6,252



   Intangible assets, net

3,738


5,279



   Goodwill, net

43,769


43,779



   Deferred tax assets

3,252


2,696



   Other non-current assets

6,295


4,317




Total Non-Current Assets

63,298


62,323


TOTAL ASSETS

$             115,438


$             108,709


LIABILITIES AND EQUITY





Current Liabilities:






Notes payable, current 

$                 2,371


$                 4,494



Accounts payable

637


580



Accrued compensation and related benefits

1,453


1,628



Deferred revenues

8,002


8,374



Other current liabilities

4,737


3,554




Total Current Liabilities

17,200


18,630


Non-Current Liabilities:






Notes payable and other borrowings, non-current

69,226


51,673



Income taxes payable

12,463


13,295



Other non-current liabilities

3,832


2,748




Total Non-Current Liabilities

85,521


67,716


Equity

12,717


22,363


TOTAL LIABILITIES AND EQUITY

$             115,438


$             108,709









 

ORACLE  CORPORATION 

FISCAL 2020 FINANCIAL RESULTS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

($ in millions)









Year Ended May 31,



2020

2019

Cash Flows From Operating Activities:





Net income 

$            10,135


$             11,083


Adjustments to reconcile net income to net cash provided by operating activities:





Depreciation

1,382


1,230


Amortization of intangible assets

1,586


1,689


Deferred income taxes

(851)


(1,191)


Stock-based compensation

1,590


1,653


Other, net

239


157


Changes in operating assets and liabilities, net of effects from acquisitions:





Increase in trade receivables, net

(445)


(82)


Decrease in prepaid expenses and other assets

665


261


Decrease in accounts payable and other liabilities

(496)


(102)


Decrease in income taxes payable

(444)


(453)


(Decrease) increase in deferred revenues

(222)


306


Net cash provided by operating activities

13,139


14,551


Cash Flows From Investing Activities:





Purchases of marketable securities and other investments

(5,731)


(1,400)


Proceeds from maturities of marketable securities and other investments

4,687


12,681


Proceeds from sales of marketable securities 

12,575


17,299


Acquisitions, net of cash acquired

(124)


(363)


Capital expenditures

(1,564)


(1,660)


Net cash provided by investing activities

9,843


26,557


Cash Flows From Financing Activities:





Payments for repurchases of common stock

(19,240)


(36,140)


Proceeds from issuances of common stock

1,588


2,155


Shares repurchased for tax withholdings upon vesting of restricted stock-based awards

(665)


(503)


Payments of dividends to stockholders

(3,070)


(2,932)


Proceeds from borrowings, net of issuance costs

19,888


-


Repayments of borrowings

(4,500)


(4,500)


Other, net

(133)


(136)


Net cash used for financing activities

(6,132)


(42,056)


Effect of exchange rate changes on cash and cash equivalents

(125)


(158)


Net increase (decrease) in cash and cash equivalents

16,725


(1,106)


Cash and cash equivalents at beginning of period

20,514


21,620


Cash and cash equivalents at end of period

$            37,239


$             20,514








 

 ORACLE  CORPORATION 

 FISCAL 2020 FINANCIAL RESULTS 

 FREE CASH FLOW - TRAILING 4-QUARTERS (1) 

 ($ in millions) 














 Fiscal 2019 

 Fiscal 2020 




 Q1 

 Q2 

 Q3 

 Q4 

 Q1 

 Q2 

 Q3 

 Q4 












GAAP Operating Cash Flow

$             15,542

$             15,238

$             14,789

$             14,551

$             13,829

$             13,796

$             13,947

$             13,139













Capital Expenditures

(1,646)

(1,468)

(1,625)

(1,660)

(1,663)

(1,591)

(1,544)

(1,564)













Free Cash Flow

$             13,896

$             13,770

$             13,164

$             12,891

$             12,166

$             12,205

$             12,403

$             11,575













% Growth over prior year

10%

10%

(1%)

(6%)

(12%)

(11%)

(6%)

(10%)
























GAAP Net Income

$               3,708

$               3,827

$             10,619

$             11,083

$             10,955

$             10,933

$             10,759

$             10,135













Free Cash Flow as a % of Net Income

375%

360%

124%

116%

111%

112%

115%

114%
























(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 


 FISCAL 2020 FINANCIAL RESULTS 


 SUPPLEMENTAL ANALYSIS OF GAAP REVENUES (1) 


 ($ in millions) 




















 Fiscal 2019 






 Fiscal 2020 




 Q1 

 Q2 

 Q3 

 Q4 

 TOTAL 


 Q1 

 Q2 

 Q3 

 Q4 

 TOTAL 



REVENUES BY OFFERINGS














 Cloud services and license support 

$       6,609

$       6,637

$       6,662

$       6,799

$    26,707


$       6,805

$       6,811

$       6,930

$       6,845

$    27,392



 Cloud license and on-premise license 

867

1,217

1,251

2,520

5,855


812

1,126

1,231

1,959

5,127



 Hardware 

904

891

915

994

3,704


815

871

857

901

3,443



 Services  

813

817

786

823

3,240


786

806

778

735

3,106



















 Total revenues 

$       9,193

$       9,562

$       9,614

$    11,136

$    39,506


$       9,218

$       9,614

$       9,796

$    10,440

$    39,068


















AS REPORTED REVENUE GROWTH RATES 














 Cloud services and license support 

3%

3%

1%

0%

2%


3%

3%

4%

1%

3%



 Cloud license and on-premise license 

(3%)

(9%)

(4%)

12%

1%


(6%)

(7%)

(2%)

(22%)

(12%)



 Hardware  

(4%)

(5%)

(8%)

(11%)

(7%)


(10%)

(2%)

(6%)

(9%)

(7%)



 Services  

(5%)

(5%)

(1%)

(7%)

(5%)


(3%)

(1%)

(1%)

(11%)

(4%)



















 Total revenues 

1%

0%

(1%)

1%

0%


0%

1%

2%

(6%)

(1%)


















CONSTANT CURRENCY GROWTH RATES (2)














 Cloud services and license support  

4%

5%

4%

3%

4%


4%

4%

5%

3%

4%



 Cloud license and on-premise license 

0%

(6%)

0%

15%

4%


(6%)

(7%)

0%

(21%)

(11%)



 Hardware  

(3%)

(3%)

(4%)

(8%)

(5%)


(9%)

(1%)

(5%)

(7%)

(6%)



 Services  

(4%)

(2%)

3%

(4%)

(2%)


(2%)

0%

0%

(8%)

(3%)



















 Total revenues 

2%

2%

3%

4%

3%


2%

1%

3%

(4%)

0%


















CLOUD SERVICES AND LICENSE SUPPORT REVENUES















BY ECOSYSTEM














 Applications cloud services and license support 

$       2,580

$       2,621

$       2,637

$       2,716

$    10,553


$       2,704

$       2,753

$       2,809

$       2,749

$    11,015



 Infrastructure cloud services and license support 

4,029

4,016

4,025

4,083

16,154


4,101

4,058

4,121

4,096

16,377




 Total cloud services and license support 

$       6,609

$       6,637

$       6,662

$       6,799

$    26,707


$       6,805

$       6,811

$       6,930

$       6,845

$    27,392


















AS REPORTED REVENUE GROWTH RATES 














 Applications cloud services and license support 

6%

6%

6%

3%

5%


5%

5%

6%

1%

4%



 Infrastructure cloud services and license support 

1%

1%

(2%)

(1%)

0%


2%

1%

2%

0%

1%




 Total cloud services and license support  

3%

3%

1%

0%

2%


3%

3%

4%

1%

3%


















CONSTANT CURRENCY GROWTH RATES (2)














 Applications cloud services and license support 

7%

7%

8%

5%

7%


6%

6%

7%

3%

5%



 Infrastructure cloud services and license support 

3%

3%

2%

2%

2%


3%

2%

4%

3%

3%




 Total cloud services and license support 

4%

5%

4%

3%

4%


4%

4%

5%

3%

4%


















GEOGRAPHIC REVENUES














 Americas 


$       5,161

$       5,243

$       5,266

$       6,184

$    21,856


$       5,150

$       5,304

$       5,363

$       5,746

$    21,563



 Europe/Middle East/Africa 


2,576

2,782

2,781

3,132

11,270


2,553

2,695

2,835

2,952

11,035



 Asia Pacific 


1,456

1,537

1,567

1,820

6,380


1,515

1,615

1,598

1,742

6,470




 Total revenues 

$       9,193

$       9,562

$       9,614

$    11,136

$    39,506


$       9,218

$       9,614

$       9,796

$    10,440

$    39,068

































(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, 2019 and 2018 for the fiscal 2020 and fiscal 2019 constant currency growth rate calculations presented, respectively, rather than the actual exchange rates in effect during the respective periods.





















APPENDIX A

ORACLE CORPORATION
Q4 FISCAL 2020 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 related to each of the below items except for the impact of the U.S. Tax Cuts and Jobs Act of 2017:

  • 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.
     
  • Impact of the U.S. Tax Cuts and Jobs Act of 2017:  The U.S. Tax Cuts and Jobs Act of 2017 (the Tax Act) was signed into law on December 22, 2017. For fiscal 2019, we recorded a net benefit of $389 million related to adjustments in our estimates of the one-time effects of the Tax Act, including the one-time transition tax on certain foreign subsidiary earnings and the remeasurement of net deferred income tax balances affected by the Tax Act. We have excluded the impacts of these benefits from our non-GAAP income taxes and net income measures for fiscal 2019. We believe making these adjustments provides insight to our operating performance and comparability.

 

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SOURCE Oracle