Q4 FY16 SaaS and PaaS Revenues Were Up 66%, and Up 68% in Constant Currency
Q1 FY17 SaaS and PaaS Revenues Expected to Be Up 75% to 80%
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REDWOOD SHORES, CA -- (Marketwired) -- 06/16/16 -- Oracle Corporation (NYSE: ORCL) today announced fiscal 2016 Q4 results. Total Q4 Revenues were $10.6 billion, down 1% in U.S. dollars and flat in constant currency. Cloud plus On-Premise Software Revenues were $8.4 billion, flat in U.S. dollars and up 2% in constant currency. Cloud software as a service (SaaS) and platform as a service (PaaS) revenues were $690 million, up 66% in U.S. dollars and up 68% in constant currency. Total Cloud revenues, including infrastructure as a service (IaaS), were $859 million, up 49% in U.S. dollars and up 51% in constant currency. Operating Income was $4.0 billion, and Operating Margin was 37%. Non-GAAP Operating Income was $4.8 billion, and the non-GAAP Operating Margin was 45%. Net Income was $2.8 billion while non-GAAP Net Income was $3.4 billion. Earnings Per Share was $0.66, while non-GAAP Earnings Per Share was $0.81. Without the impact of the U.S. dollar strengthening compared to foreign currencies, Oracle's reported GAAP Earnings Per Share would have been 2 cents higher and non-GAAP Earnings Per Share would have been 1 cent higher.
Short-term deferred revenues were $7.7 billion, up 6% in U.S. dollars and up 7% in constant currency compared with a year ago. Operating cash flow on a trailing twelve-month basis was $13.6 billion.
For fiscal 2016, Total Revenues were $37.0 billion, down 3% in U.S. dollars and up 2% in constant currency. Cloud plus On-Premise Software Revenues were $29.0 billion, down 2% in U.S. dollars and up 3% in constant currency. Cloud SaaS and PaaS revenues were $2.2 billion, up 49% in U.S. dollars and up 52% in constant currency. Total Cloud revenues, including IaaS, were $2.9 billion, up 36% in U.S. dollars and up 40% in constant currency. Operating Income was $12.6 billion, and Operating Margin was 34%. Non-GAAP Operating Income was $15.8 billion and non-GAAP Operating Margin was 43%. Net Income was $8.9 billion while non-GAAP Net Income was $11.2 billion. Earnings Per Share was $2.07, while Non-GAAP Earnings Per Share was $2.61. Without the impact of the U.S. dollar strengthening compared to foreign currencies, Oracle's reported GAAP and non-GAAP Earnings Per Share would have been 17 cents higher.
"Fourth quarter SaaS and PaaS revenue growth accelerated to 68% in constant currency, significantly higher than my guidance," said Oracle CEO, Safra Catz. "SaaS and PaaS gross margins continued to improve throughout the year, exiting FY16 at 56%. Bookings in Q4 were also very strong enabling us to raise our guidance for Q1 SaaS and PaaS revenue growth, which we now expect to be between 75% and 80%."
"We added more than 1,600 new SaaS customers and more than 2,000 new PaaS customers in Q4," said Oracle CEO, Mark Hurd. "In Fusion ERP alone, we added more than 800 new cloud customers. Today, Oracle has nearly 2,600 Fusion ERP customers in the Oracle Public Cloud -- that's ten-times more cloud ERP customers than Workday."
"We expect that the SaaS and PaaS hyper-growth we experienced in FY16 will continue on for the next few years," said Oracle Executive Chairman and CTO, Larry Ellison. "That gives us a fighting chance to be the first cloud company to reach $10 billion in SaaS and PaaS revenue. We're also very excited about the availability of version 2 of Oracle's Infrastructure as a Service (IaaS) -- which will enable us to speed up the growth of our IaaS business, which customers want to buy in conjunction with our SaaS and PaaS."
The Board of Directors also declared a quarterly cash dividend of $0.15 per share of outstanding common stock. This dividend will be paid to stockholders of record as of the close of business on July 6, 2016, with a payment date of July 27, 2016.
Q4 Fiscal 2016 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 of this event, please visit the Oracle Investor Relations website at http://www.oracle.com/investor. In addition, Oracle's Q4 results and fiscal 2016 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, Pass Code: 28515799.
About Oracle
Oracle offers a comprehensive and fully integrated stack of cloud applications and platform services. For more information about Oracle (NYSE: ORCL), visit www.oracle.com or contact Investor Relations at [email protected] or (650) 506-4073.
Trademarks
Oracle and Java are registered trademarks of Oracle and/or its affiliates. Other names may be trademarks of their respective owners.
"Safe Harbor" Statement: Statements in this press release relating to Oracle's future plans, expectations, beliefs, intentions and prospects, including statements regarding our future guidance, and expectations of future SaaS, PaaS and IaaS growth, 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) Our cloud computing strategy, including our Oracle Cloud SaaS, PaaS, IaaS and data as a service offerings, may not be successful. (2) If we are unable to develop new or sufficiently differentiated products and services, or to enhance and improve our products and support services in a timely manner or to position and/or price our products and services to meet market demand, customers may not buy new software licenses, cloud software subscriptions or hardware systems products or purchase or renew support contracts. (3) If the security measures for our software, hardware, services or Oracle Cloud offerings are compromised or if such offerings contain significant coding, manufacturing or configuration errors, we may experience reputational harm, legal claims and financial exposure. (4) 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, fluctuations in currency exchange rates, delays in delivery of new products or releases or a decline in our renewal rates for support contracts. (5) Our international sales and operations subject us to additional risks that can adversely affect our operating results, including risks relating to foreign currency gains and losses. (6) Economic, geopolitical and market conditions, including the continued slow economic recovery in the U.S. and other parts of the world, 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. (7) 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. 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, 2016. Oracle undertakes no duty to update any statement in light of new information or future events.
ORACLE CORPORATION
Q4 FISCAL 2016 FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($in millions, except per share data)
Three Months Ended May 31,
----------------------------------
% Increase
(Decrease)
in
% Increase Constant
% of % of (Decrease) Currency
2016 Revenues 2015 Revenues in US $ (1)
------- -------- ------- -------- ---------- ----------
REVENUES
Cloud software
as a service
and platform
as a service $ 690 6% $ 416 4% 66% 68%
Cloud
infrastructure
as a service 169 2% 160 1% 5% 8%
------- -------- ------- --------
Total cloud
revenues 859 8% 576 5% 49% 51%
------- -------- ------- --------
New software
licenses 2,766 26% 3,138 29% (12%) (10%)
Software
license
updates and
product
support 4,814 46% 4,686 44% 3% 4%
------- -------- ------- --------
Total on-
premise
software
revenues 7,580 72% 7,824 73% (3%) (2%)
------- -------- ------- --------
Total cloud
and on-
premise
software
revenues 8,439 80% 8,400 78% 0% 2%
------- -------- ------- --------
Hardware
products 725 7% 818 8% (11%) (10%)
Hardware
support 558 5% 589 6% (5%) (4%)
------- -------- ------- --------
Total
hardware
revenues 1,283 12% 1,407 14% (9%) (7%)
------- -------- ------- --------
Total
services
revenues 872 8% 899 8% (3%) (1%)
------- -------- ------- --------
Total
revenues 10,594 100% 10,706 100% (1%) 0%
------- -------- ------- --------
OPERATING
EXPENSES
Sales and
marketing 2,306 22% 2,212 21% 4% 6%
Cloud software
as a service
and platform
as a service 304 3% 256 2% 19% 20%
Cloud
infrastructure
as a service 99 1% 90 1% 9% 11%
Software
license
updates and
product
support 268 2% 331 3% (19%) (18%)
Hardware
products 405 4% 438 4% (8%) (6%)
Hardware
support 168 2% 188 2% (11%) (10%)
Services 692 7% 750 7% (8%) (6%)
Research and
development 1,534 14% 1,435 13% 7% 8%
General and
administrative 323 3% 278 3% 16% 18%
Amortization of
intangible
assets 355 3% 507 5% (30%) (30%)
Acquisition
related and
other 7 0% 200 2% (97%) (96%)
Restructuring 165 2% 39 0% 320% 314%
------- -------- ------- --------
Total
operating
expenses 6,626 63% 6,724 63% (1%) 0%
------- -------- ------- --------
OPERATING INCOME 3,968 37% 3,982 37% 0% 1%
Interest
expense (362) (3%) (325) (3%) 11% 11%
Non-operating
income, net 126 1% 40 1% 211% 211%
------- -------- ------- --------
INCOME BEFORE
PROVISION FOR
INCOME TAXES 3,732 35% 3,697 35% 1% 3%
------- -------- ------- --------
Provision for
income taxes 918 8% 939 9% (2%) 0%
------- -------- ------- --------
NET INCOME $ 2,814 27% $ 2,758 26% 2% 4%
======= ======== ======= ========
EARNINGS PER
SHARE:
Basic $ 0.68 $ 0.63
Diluted $ 0.66 $ 0.62
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING:
Basic 4,147 4,359
Diluted 4,238 4,463
(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, 2015, 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, 2016
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
Q4 FISCAL 2016 FINANCIAL RESULTS
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)
($ in millions, except per share data)
Three Months Ended May 31,
------------------------------------------------------
2016 2016 2015 2015
GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP
-------- ------ -------- -------- ------ --------
TOTAL REVENUES $ 10,594 $ 2 $ 10,596 $ 10,706 $ 6 $ 10,712
TOTAL CLOUD AND ON-
PREMISE SOFTWARE
REVENUES $ 8,439 $ 2 $ 8,441 $ 8,400 $ 5 $ 8,405
Cloud software as
a service and
platform as a
service 690 1 691 416 3 419
Cloud
infrastructure as
a service 169 - 169 160 - 160
New software
licenses 2,766 - 2,766 3,138 - 3,138
Software license
updates and
product support 4,814 1 4,815 4,686 2 4,688
TOTAL HARDWARE
REVENUES $ 1,283 $ - $ 1,283 $ 1,407 $ 1 $ 1,408
Hardware products 725 - 725 818 - 818
Hardware support 558 - 558 589 1 590
TOTAL OPERATING
EXPENSES $ 6,626 $ (796) $ 5,830 $ 6,724 $ (990) $ 5,734
Cloud software as
a service and
platform as a
service (3) 304 (4) 300 256 (3) 253
Stock-based
compensation (3) 265 (265) - 241 (241) -
Amortization of
intangible assets
(4) 355 (355) - 507 (507) -
Acquisition
related and other 7 (7) - 200 (200) -
Restructuring 165 (165) - 39 (39) -
CLOUD SOFTWARE AS A
SERVICE AND
PLATFORM AS A
SERVICE MARGIN % 56% 57% 38% 40%
OPERATING INCOME $ 3,968 $ 798 $ 4,766 $ 3,982 $ 996 $ 4,978
OPERATING MARGIN % 37% 45% 37% 46%
INCOME TAX EFFECTS
(5) $ 918 $ 188 $ 1,106 $ 939 $ 258 $ 1,197
NET INCOME $ 2,814 $ 610 $ 3,424 $ 2,758 $ 738 $ 3,496
DILUTED EARNINGS PER
SHARE $ 0.66 $ 0.81 $ 0.62 $ 0.78
DILUTED WEIGHTED
AVERAGE COMMON
SHARES OUTSTANDING 4,238 - 4,238 4,463 - 4,463
% Increase (Decrease)
% Increase (Decrease) in Constant Currency
in US $ (2)
----------------------- -----------------------
GAAP Non-GAAP GAAP Non-GAAP
---------- ---------- ---------- ----------
TOTAL REVENUES (1%) (1%) 0% 0%
TOTAL CLOUD AND ON-
PREMISE SOFTWARE
REVENUES 0% 0% 2% 2%
Cloud software as
a service and
platform as a
service 66% 65% 68% 67%
Cloud
infrastructure as
a service 5% 5% 8% 8%
New software
licenses (12%) (12%) (10%) (10%)
Software license
updates and
product support 3% 3% 4% 4%
TOTAL HARDWARE
REVENUES (9%) (9%) (7%) (7%)
Hardware products (11%) (11%) (10%) (10%)
Hardware support (5%) (5%) (4%) (4%)
TOTAL OPERATING
EXPENSES (1%) 2% 0% 3%
Cloud software as
a service and
platform as a
service (3) 19% 18% 20% 20%
Stock-based
compensation (3) 10% * 10% *
Amortization of
intangible assets
(4) (30%) * (30%) *
Acquisition
related and other (97%) * (96%) *
Restructuring 320% * 314% *
CLOUD SOFTWARE AS A
SERVICE AND
PLATFORM AS A
SERVICE MARGIN % 1,748 bp. 1,707 bp. 1,749 bp. 1,707 bp.
OPERATING INCOME 0% (4%) 1% (3%)
OPERATING MARGIN % 26 bp. (149) bp. 36 bp. (153) bp.
INCOME TAX EFFECTS
(5) (2%) (8%) 0% (6%)
NET INCOME 2% (2%) 4% (1%)
DILUTED EARNINGS PER
SHARE 7% 3% 9% 5%
DILUTED WEIGHTED
AVERAGE COMMON
SHARES OUTSTANDING (5%) (5%) (5%) (5%)
(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, 2015, 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, 2016 May 31, 2015
-------------------------- --------------------------
GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP
-------- ------- -------- -------- ------- --------
Sales and
marketing $ 57 $ (57) $ - $ 49 $ (49) $ -
Cloud
infrastructure
as a service 1 (1) - 1 (1) -
Software license
updates and
product support 6 (6) - 6 (6) -
Hardware products 2 (2) - 2 (2) -
Hardware support 1 (1) - 2 (2) -
Services 7 (7) - 8 (8) -
Research and
development 157 (157) - 142 (142) -
General and
administrative 34 (34) - 31 (31) -
-------- ------- -------- -------- ------- --------
Subtotal 265 (265) - 241 (241) -
-------- ------- -------- -------- ------- --------
Cloud software as
a service and
platform as a
service 4 (4) - 3 (3) -
Acquisition
related and
other - - - - - -
-------- ------- -------- -------- ------- --------
Total stock-
based
compensation $ 269 $ (269) $ - $ 244 $ (244) $ -
======== ======= ======== ======== ======= ========
(4) Estimated future annual amortization expense related to intangible
assets as of May 31, 2016 was as follows:
Fiscal 2017 $ 1,026
Fiscal 2018 878
Fiscal 2019 770
Fiscal 2020 621
Fiscal 2021 476
Thereafter 1,172
--------
Total intangible
assets, net $ 4,943
========
(5) Income tax effects were calculated reflecting an effective GAAP tax
rate of 24.6% and 25.4% in the fourth quarter of fiscal 2016 and 2015,
respectively, and an effective non-GAAP tax rate of 24.4% and 25.5% in
the fourth quarter of fiscal 2016 and 2015, respectively. The
differences between our GAAP and non-GAAP tax rates in the fourth
quarter of fiscal 2016 and 2015 were primarily due to the net tax
effects of acquisition related items, including the tax effects of
amortization of intangible assets.
* Not meaningful
ORACLE CORPORATION
FISCAL 2016 YEAR TO DATE FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ in millions, except per share data)
Year Ended May 31,
----------------------------------
% Increase
(Decrease)
in
% Increase Constant
% of % of (Decrease) Currency
2016 Revenues 2015 Revenues in US $ (1)
------- -------- ------- -------- ---------- ----------
REVENUES
Cloud software
as a service
and platform
as a service $ 2,207 6% $ 1,485 4% 49% 52%
Cloud
infrastructure
as a service 646 2% 608 2% 6% 11%
------- -------- ------- --------
Total cloud
revenues 2,853 8% 2,093 6% 36% 40%
------- -------- ------- --------
New software
licenses 7,276 19% 8,535 22% (15%) (11%)
Software
license
updates and
product
support 18,861 51% 18,847 49% 0% 5%
------- -------- ------- --------
Total on-
premise
software
revenues 26,137 70% 27,382 71% (5%) 0%
------- -------- ------- --------
Total cloud
and on-
premise
software
revenues 28,990 78% 29,475 77% (2%) 3%
------- -------- ------- --------
Hardware
products 2,471 7% 2,825 8% (13%) (7%)
Hardware
support 2,197 6% 2,380 6% (8%) (3%)
------- -------- ------- --------
Total
hardware
revenues 4,668 13% 5,205 14% (10%) (5%)
------- -------- ------- --------
Total
services
revenues 3,389 9% 3,546 9% (4%) 2%
------- -------- ------- --------
Total
revenues 37,047 100% 38,226 100% (3%) 2%
------- -------- ------- --------
OPERATING
EXPENSES
Sales and
marketing 7,884 21% 7,655 20% 3% 8%
Cloud software
as a service
and platform
as a service 1,152 3% 773 2% 49% 53%
Cloud
infrastructure
as a service 366 1% 344 1% 6% 10%
Software
license
updates and
product
support 1,146 3% 1,199 3% (4%) 1%
Hardware
products 1,371 4% 1,471 4% (7%) (1%)
Hardware
support 693 2% 816 2% (15%) (10%)
Services 2,751 8% 2,929 8% (6%) 0%
Research and
development 5,787 16% 5,524 14% 5% 7%
General and
administrative 1,155 3% 1,077 3% 7% 11%
Amortization of
intangible
assets 1,638 4% 2,149 5% (24%) (24%)
Acquisition
related and
other 42 0% 211 1% (80%) (80%)
Restructuring 458 1% 207 1% 121% 145%
------- -------- ------- --------
Total operating
expenses 24,443 66% 24,355 64% 0% 4%
------- -------- ------- --------
OPERATING INCOME 12,604 34% 13,871 36% (9%) (2%)
Interest
expense (1,467) (4%) (1,143) (3%) 28% 28%
Non-operating
income, net 305 1% 106 0% 188% 221%
------- -------- ------- --------
INCOME BEFORE
PROVISION FOR
INCOME TAXES 11,442 31% 12,834 33% (11%) (4%)
------- -------- ------- --------
Provision for
income taxes 2,541 7% 2,896 7% (12%) (5%)
------- -------- ------- --------
NET INCOME $ 8,901 24% $ 9,938 26% (10%) (3%)
======= ======== ======= ========
EARNINGS PER
SHARE:
Basic $ 2.11 $ 2.26
Diluted $ 2.07 $ 2.21
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING:
Basic 4,221 4,404
Diluted 4,305 4,503
(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, 2015, 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, 2016 compared
with the corresponding prior year period decreased our revenues by 5
percentage points, operating expenses by 4 percentage points and
operating income by 7 percentage points.
ORACLE CORPORATION
FISCAL 2016 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,
--------------------------------------------------------
2016 2016 2015 2015
GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP
-------- ------- -------- -------- ------- --------
TOTAL REVENUES $ 37,047 $ 10 $ 37,057 $ 38,226 $ 27 $ 38,253
TOTAL CLOUD AND
ON-PREMISE
SOFTWARE
REVENUES $ 28,990 $ 9 $ 28,999 $ 29,475 $ 23 $ 29,498
Cloud software
as a service
and platform
as a service 2,207 7 2,214 1,485 12 1,497
Cloud
infrastructure
as a service 646 - 646 608 - 608
New software
licenses 7,276 - 7,276 8,535 - 8,535
Software
license
updates and
product
support 18,861 2 18,863 18,847 11 18,858
TOTAL HARDWARE
REVENUES $ 4,668 $ 1 $ 4,669 $ 5,205 $ 4 $ 5,209
Hardware
products 2,471 - 2,471 2,825 - 2,825
Hardware
support 2,197 1 2,198 2,380 4 2,384
TOTAL OPERATING
EXPENSES $ 24,443 $(3,172) $ 21,271 $ 24,355 $(3,495) $ 20,860
Stock-based
compensation
(3) 1,034 (1,034) - 928 (928) -
Amortization of
intangible
assets (4) 1,638 (1,638) - 2,149 (2,149) -
Acquisition
related and
other 42 (42) - 211 (211) -
Restructuring 458 (458) - 207 (207) -
OPERATING INCOME $ 12,604 $ 3,182 $ 15,786 $ 13,871 $ 3,522 $ 17,393
OPERATING MARGIN
% 34% 43% 36% 45%
INCOME TAX
EFFECTS (5) $ 2,541 $ 846 $ 3,387 $ 2,896 $ 971 $ 3,867
NET INCOME $ 8,901 $ 2,336 $ 11,237 $ 9,938 $ 2,551 $ 12,489
DILUTED EARNINGS
PER SHARE $ 2.07 $ 2.61 $ 2.21 $ 2.77
DILUTED WEIGHTED
AVERAGE COMMON
SHARES
OUTSTANDING 4,305 - 4,305 4,503 - 4,503
% Increase (Decrease)
% Increase (Decrease) in Constant Currency
in US $ (2)
----------------------- -----------------------
GAAP Non-GAAP GAAP Non-GAAP
---------- ---------- ---------- ----------
TOTAL REVENUES (3%) (3%) 2% 2%
TOTAL CLOUD AND
ON-PREMISE
SOFTWARE
REVENUES (2%) (2%) 3% 3%
Cloud software
as a service
and platform
as a service 49% 48% 52% 52%
Cloud
infrastructure
as a service 6% 6% 11% 11%
New software
licenses (15%) (15%) (11%) (11%)
Software
license
updates and
product
support 0% 0% 5% 5%
TOTAL HARDWARE
REVENUES (10%) (10%) (5%) (5%)
Hardware
products (13%) (13%) (7%) (7%)
Hardware
support (8%) (8%) (3%) (3%)
TOTAL OPERATING
EXPENSES 0% 2% 4% 7%
Stock-based
compensation
(3) 11% * 11% *
Amortization of
intangible
assets (4) (24%) * (24%) *
Acquisition
related and
other (80%) * (80%) *
Restructuring 121% * 145% *
OPERATING INCOME (9%) (9%) (2%) (4%)
OPERATING MARGIN
% (226) bp. (287) bp. (153) bp. (254) bp.
INCOME TAX
EFFECTS (5) (12%) (12%) (5%) (7%)
NET INCOME (10%) (10%) (3%) (4%)
DILUTED EARNINGS
PER SHARE (6%) (6%) 1% 0%
DILUTED WEIGHTED
AVERAGE COMMON
SHARES
OUTSTANDING (4%) (4%) (4%) (4%)
(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, 2015, 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, 2016 May 31, 2015
-------------------------- --------------------------
GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP
-------- ------- -------- -------- ------- --------
Sales and
marketing $ 220 $ (220) $ - $ 180 $ (180) $ -
Cloud software as
a service and
platform as a
service 17 (17) - 10 (10) -
Cloud
infrastructure as
a service 4 (4) - 5 (5) -
Software license
updates and
product support 23 (23) - 21 (21) -
Hardware products 7 (7) - 6 (6) -
Hardware support 5 (5) - 6 (6) -
Services 29 (29) - 30 (30) -
Research and
development 609 (609) - 522 (522) -
General and
administrative 120 (120) - 148 (148) -
-------- ------- -------- -------- ------- --------
Subtotal 1,034 (1,034) - 928 (928) -
-------- ------- -------- -------- ------- --------
Acquisition
related and other 3 (3) - 5 (5) -
-------- ------- -------- -------- ------- --------
Total stock-
based
compensation $ 1,037 $(1,037) $ - $ 933 $ (933) $ -
======== ======= ======== ======== ======= ========
(4) Estimated future annual amortization expense related to intangible
assets as of May 31, 2016 was as follows:
Fiscal 2017 $ 1,026
Fiscal 2018 878
Fiscal 2019 770
Fiscal 2020 621
Fiscal 2021 476
Thereafter 1,172
--------
Total intangible
assets, net $ 4,943
========
(5) Income tax effects were calculated reflecting an effective GAAP tax rate
of 22.2% and 22.6% in fiscal 2016 and 2015, respectively, and an
effective non-GAAP tax rate of 23.2% and 23.6% in fiscal 2016 and 2015,
respectively. The differences between our GAAP and non-GAAP tax rates in
fiscal 2016 and 2015 were primarily due to the net tax effects of
acquisition related items, including the tax effects of amortization of
intangible assets.
* Not meaningful
ORACLE CORPORATION
FISCAL 2016 FINANCIAL RESULTS
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in millions)
May 31, May 31,
2016 2015
------------- -------------
ASSETS
Current Assets:
Cash and cash equivalents $ 20,152 $ 21,716
Marketable securities 35,973 32,652
Trade receivables, net 5,385 5,618
Inventories 212 314
Prepaid expenses and other current assets 2,591 2,220
------------- -------------
Total Current Assets 64,313 62,520
Non-Current Assets:
Property, plant and equipment, net 4,000 3,686
Intangible assets, net 4,943 6,406
Goodwill, net 34,590 34,087
Deferred tax assets 1,291 1,458
Other assets 3,043 2,746
------------- -------------
Total Non-Current Assets 47,867 48,383
------------- -------------
TOTAL ASSETS $ 112,180 $ 110,903
============= =============
LIABILITIES AND EQUITY
Current Liabilities:
Notes payable, current $ 3,750 $ 1,999
Accounts payable 504 806
Accrued compensation and related benefits 1,966 1,839
Deferred revenues 7,655 7,245
Other current liabilities 3,333 3,317
------------- -------------
Total Current Liabilities 17,208 15,206
Non-Current Liabilities:
Notes payable, non-current 40,105 39,959
Income taxes payable 4,908 4,386
Other non-current liabilities 2,169 2,254
------------- -------------
Total Non-Current Liabilities 47,182 46,599
Equity 47,790 49,098
------------- -------------
TOTAL LIABILITIES AND EQUITY $ 112,180 $ 110,903
============= =============
ORACLE CORPORATION
FISCAL 2016 FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in millions)
Year Ended May 31,
--------------------------
2016 2015
------------ ------------
Cash Flows From Operating Activities:
Net income $ 8,901 $ 9,938
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 871 712
Amortization of intangible assets 1,638 2,149
Deferred income taxes (105) (548)
Stock-based compensation 1,037 933
Tax benefits on the exercise of stock
options and vesting of restricted stock-
based awards 311 396
Excess tax benefits on the exercise of stock
options and vesting of restricted stock-
based awards (124) (244)
Other, net 143 327
Changes in operating assets and liabilities,
net of effects from acquisitions:
Decrease in trade receivables, net 226 264
Decrease (increase) in inventories 88 (96)
Increase in prepaid expenses and other
assets (90) (387)
(Decrease) increase in accounts payable
and other liabilities (13) 247
Increase (decrease) in income taxes
payable 2 (10)
Increase in deferred revenues 676 655
------------ ------------
Net cash provided by operating
activities 13,561 14,336
------------ ------------
Cash Flows From Investing Activities:
Purchases of marketable securities and other
investments (24,562) (31,421)
Proceeds from maturities and sales of
marketable securities and other investments 21,247 20,004
Acquisitions, net of cash acquired (650) (6,239)
Capital expenditures (1,189) (1,391)
------------ ------------
Net cash used for investing activities (5,154) (19,047)
------------ ------------
Cash Flows From Financing Activities:
Payments for repurchases of common stock (10,440) (8,087)
Proceeds from issuances of common stock 1,425 1,816
Shares repurchased for tax withholdings upon
vesting of restricted stock-based awards (89) (14)
Payments of dividends to stockholders (2,541) (2,255)
Proceeds from borrowings, net of issuance
costs 3,750 19,842
Repayments of borrowings (2,000) (1,500)
Excess tax benefits on the exercise of stock
options and vesting of restricted stock-based
awards 124 244
Distributions to noncontrolling interests (85) (196)
------------ ------------
Net cash (used for) provided by
financing activities (9,856) 9,850
------------ ------------
Effect of exchange rate changes on cash and cash
equivalents (115) (1,192)
------------ ------------
Net (decrease) increase in cash and cash
equivalents (1,564) 3,947
------------ ------------
Cash and cash equivalents at beginning of period 21,716 17,769
------------ ------------
Cash and cash equivalents at end of period $ 20,152 $ 21,716
============ ============
ORACLE CORPORATION
FISCAL 2016 FINANCIAL RESULTS
FREE CASH FLOW - TRAILING 4-QUARTERS (1)
($ in millions)
Fiscal 2015
-----------------------------------------
Q1 Q2 Q3 Q4
--------- --------- -------- --------
GAAP Operating Cash Flow $ 15,357 $ 15,273 $ 14,509 $ 14,336
Capital Expenditures (628) (727) (948) (1,391)
--------- --------- -------- --------
Free Cash Flow $ 14,729 $ 14,546 $ 13,561 $ 12,945
========= ========= ======== ========
% Growth over prior year 4% 0% (6)% (10)%
--------- --------- -------- --------
GAAP Net Income $ 10,948 $ 10,896 $ 10,827 $ 9,938
Free Cash Flow as a % of Net
Income 135% 133% 125% 130%
--------- --------- -------- --------
Fiscal 2016
-----------------------------------------
Q1 Q2 Q3 Q4
-------- -------- -------- --------
GAAP Operating Cash Flow $ 13,464 $ 12,903 $ 14,114 $ 13,561
Capital Expenditures (1,636) (1,606) (1,606) (1,189)
-------- -------- -------- --------
Free Cash Flow $ 11,828 $ 11,297 $ 12,508 $ 12,372
======== ======== ======== ========
% Growth over prior year (20)% (22)% (8)% (4)%
-------- -------- -------- --------
GAAP Net Income $ 9,501 $ 9,198 $ 8,844 $ 8,901
Free Cash Flow as a % of Net
Income 124% 123% 141% 139%
-------- -------- -------- --------
(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 2016 FINANCIAL RESULTS
SUPPLEMENTAL ANALYSIS OF GAAP REVENUES AND HEADCOUNT (1)
($ in millions)
Fiscal 2015
----------------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
-------- -------- -------- -------- --------
REVENUES
Cloud software as a
service and
platform as a
service $ 337 $ 361 $ 372 $ 416 $ 1,485
Cloud
infrastructure as
a service 138 155 155 160 608
-------- -------- -------- -------- --------
Total cloud
revenues 475 516 527 576 2,093
New software
licenses 1,370 2,045 1,982 3,138 8,535
Software license
updates and
product support 4,731 4,768 4,661 4,686 18,847
-------- -------- -------- -------- --------
Total on-premise
software
revenues 6,101 6,813 6,643 7,824 27,382
-------- -------- -------- -------- --------
Total cloud and
on-premise
software
revenues 6,576 7,329 7,170 8,400 29,475
Hardware products 578 717 712 818 2,825
Hardware support 587 617 587 589 2,380
-------- -------- -------- -------- --------
Total hardware
revenues 1,165 1,334 1,299 1,407 5,205
Total services
revenues 855 935 858 899 3,546
-------- -------- -------- -------- --------
Total
revenues $ 8,596 $ 9,598 $ 9,327 $ 10,706 $ 38,226
======== ======== ======== ======== ========
AS REPORTED REVENUE
GROWTH RATES
Cloud software as a
service and
platform as a
service 32% 39% 30% 29% 32%
Cloud
infrastructure as
a service 26% 60% 28% 25% 33%
Total cloud
revenues 31% 45% 29% 28% 33%
New software
licenses (2%) (4%) (7%) (17%) (9%)
Software license
updates and
product support 7% 6% 2% 0% 4%
Total on-premise
software
revenues 5% 3% (1%) (8%) (1%)
Total cloud and
on-premise
software
revenues 6% 5% 1% (6%) 1%
Hardware products (14%) 0% (2%) (6%) (5%)
Hardware support (1%) 1% (2%) (1%) (1%)
Total hardware
revenues (8%) 1% (2%) (4%) (3%)
Total services
revenues (7%) (3%) (3%) (4%) (4%)
Total
revenues 3% 3% 0% (5%) 0%
CONSTANT CURRENCY
GROWTH RATES (2)
Cloud software as a
service and
platform as a
service 32% 41% 34% 35% 35%
Cloud
infrastructure as
a service 25% 62% 32% 31% 36%
Total cloud
revenues 30% 47% 33% 34% 36%
New software
licenses (2%) 0% 0% (10%) (4%)
Software license
updates and
product support 6% 9% 8% 8% 8%
Total on-premise
software
revenues 4% 6% 6% 0% 4%
Total cloud and
on-premise
software
revenues 6% 8% 7% 2% 5%
Hardware products (14%) 4% 6% 3% 0%
Hardware support (2%) 5% 4% 7% 4%
Total hardware
revenues (8%) 4% 5% 5% 2%
Total services
revenues (8%) 1% 3% 5% 0%
Total
revenues 2% 7% 6% 3% 4%
-------- -------- -------- -------- --------
GEOGRAPHIC REVENUES
REVENUES
Americas $ 4,620 $ 5,221 $ 5,134 $ 6,133 $ 21,107
Europe, Middle East
& Africa 2,589 2,911 2,813 3,067 11,380
Asia Pacific 1,387 1,466 1,380 1,506 5,739
-------- -------- -------- -------- --------
Total
revenues $ 8,596 $ 9,598 $ 9,327 $ 10,706 $ 38,226
======== ======== ======== ======== ========
-------- -------- -------- -------- --------
HEADCOUNT
GEOGRAPHIC AREA
Americas 54,073 57,243 58,117 58,415
Europe, Middle East
& Africa 23,349 26,997 26,989 26,988
Asia Pacific 45,496 46,312 46,456 46,962
-------- -------- -------- -------- --------
Total company 122,918 130,552 131,562 132,365
======== ======== ======== ======== ========
Fiscal 2016
----------------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
-------- -------- -------- -------- --------
REVENUES
Cloud software as a
service and
platform as a
service $ 451 $ 484 $ 583 $ 690 $ 2,207
Cloud
infrastructure as
a service 160 165 152 169 646
-------- -------- -------- -------- --------
Total cloud
revenues 611 649 735 859 2,853
New software
licenses 1,151 1,677 1,680 2,766 7,276
Software license
updates and
product support 4,696 4,683 4,669 4,814 18,861
-------- -------- -------- -------- --------
Total on-premise
software
revenues 5,847 6,360 6,349 7,580 26,137
-------- -------- -------- -------- --------
Total cloud and
on-premise
software
revenues 6,458 7,009 7,084 8,439 28,990
Hardware products 570 573 604 725 2,471
Hardware support 558 550 531 558 2,197
-------- -------- -------- -------- --------
Total hardware
revenues 1,128 1,123 1,135 1,283 4,668
Total services
revenues 862 861 793 872 3,389
-------- -------- -------- -------- --------
Total
revenues $ 8,448 $ 8,993 $ 9,012 $ 10,594 $ 37,047
======== ======== ======== ======== ========
AS REPORTED REVENUE
GROWTH RATES
Cloud software as a
service and
platform as a
service 34% 34% 57% 66% 49%
Cloud
infrastructure as
a service 16% 7% (2%) 5% 6%
Total cloud
revenues 29% 26% 40% 49% 36%
New software
licenses (16%) (18%) (15%) (12%) (15%)
Software license
updates and
product support (1%) (2%) 0% 3% 0%
Total on-premise
software
revenues (4%) (7%) (4%) (3%) (5%)
Total cloud and
on-premise
software
revenues (2%) (4%) (1%) 0% (2%)
Hardware products (1%) (20%) (15%) (11%) (13%)
Hardware support (5%) (11%) (10%) (5%) (8%)
Total hardware
revenues (3%) (16%) (13%) (9%) (10%)
Total services
revenues 1% (8%) (7%) (3%) (4%)
Total
revenues (2%) (6%) (3%) (1%) (3%)
CONSTANT CURRENCY
GROWTH RATES (2)
Cloud software as a
service and
platform as a
service 38% 39% 61% 68% 52%
Cloud
infrastructure as
a service 23% 11% 2% 8% 11%
Total cloud
revenues 34% 31% 44% 51% 40%
New software
licenses (9%) (12%) (11%) (10%) (11%)
Software license
updates and
product support 8% 5% 5% 4% 5%
Total on-premise
software
revenues 4% 0% 0% (2%) 0%
Total cloud and
on-premise
software
revenues 6% 2% 3% 2% 3%
Hardware products 9% (14%) (10%) (10%) (7%)
Hardware support 4% (5%) (5%) (4%) (3%)
Total hardware
revenues 6% (10%) (8%) (7%) (5%)
Total services
revenues 10% 0% (2%) (1%) 2%
Total
revenues 7% 0% 1% 0% 2%
-------- -------- -------- -------- --------
GEOGRAPHIC REVENUES
REVENUES
Americas $ 4,716 $ 4,960 $ 4,942 $ 5,847 $ 20,466
Europe, Middle East
& Africa 2,456 2,645 2,661 3,120 10,881
Asia Pacific 1,276 1,388 1,409 1,627 5,700
-------- -------- -------- -------- --------
Total
revenues $ 8,448 $ 8,993 $ 9,012 $ 10,594 $ 37,047
======== ======== ======== ======== ========
-------- -------- -------- -------- --------
HEADCOUNT
GEOGRAPHIC AREA
Americas 59,901 59,999 60,437 60,329
Europe, Middle East
& Africa 27,030 27,541 27,275 27,061
Asia Pacific 48,139 48,620 48,694 48,872
-------- -------- -------- -------- --------
Total company 135,070 136,160 136,406 136,262
======== ======== ======== ======== ========
(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, 2015 and 2014 for the fiscal 2016 and fiscal
2015 constant currency growth rate calculations presented, respectively,
rather than the actual exchange rates in effect during the respective
periods.
ORACLE CORPORATION
FISCAL 2016 FINANCIAL RESULTS
SUPPLEMENTAL GEOGRAPHIC REVENUES ANALYSIS (1)
($ in millions)
Fiscal 2015
----------------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
-------- -------- -------- -------- --------
AMERICAS
Total cloud and on-
premise software
revenues $ 3,614 $ 4,044 $ 4,021 $ 4,926 $ 16,604
======== ======== ======== ======== ========
Total hardware
revenues $ 583 $ 716 $ 686 $ 751 $ 2,737
======== ======== ======== ======== ========
AS REPORTED GROWTH
RATES
Total cloud and on-
premise software
revenues 5% 6% 5% 6% 6%
Total hardware
revenues (9%) 3% 5% 1% 0%
CONSTANT CURRENCY
GROWTH RATES (2)
Total cloud and on-
premise software
revenues 6% 8% 7% 9% 7%
Total hardware
revenues (8%) 5% 7% 4% 2%
-------- -------- -------- -------- --------
EUROPE / MIDDLE EAST
/ AFRICA
Total cloud and on-
premise software
revenues $ 1,992 $ 2,234 $ 2,169 $ 2,369 $ 8,764
======== ======== ======== ======== ========
Total hardware
revenues $ 338 $ 380 $ 379 $ 423 $ 1,519
======== ======== ======== ======== ========
AS REPORTED GROWTH
RATES
Total cloud and on-
premise software
revenues 10% 4% (3%) (22%) (5%)
Total hardware
revenues (6%) 2% (6%) (4%) (3%)
CONSTANT CURRENCY
GROWTH RATES (2)
Total cloud and on-
premise software
revenues 7% 9% 9% (8%) 3%
Total hardware
revenues (7%) 8% 8% 15% 6%
-------- -------- -------- -------- --------
ASIA PACIFIC
Total cloud and on-
premise software
revenues $ 970 $ 1,051 $ 980 $ 1,105 $ 4,107
======== ======== ======== ======== ========
Total hardware
revenues $ 244 $ 238 $ 234 $ 233 $ 949
======== ======== ======== ======== ========
AS REPORTED GROWTH
RATES
Total cloud and on-
premise software
revenues 3% 2% (3%) (10%) (3%)
Total hardware
revenues (8%) (7%) (12%) (16%) (11%)
CONSTANT CURRENCY
GROWTH RATES (2)
Total cloud and on-
premise software
revenues 2% 7% 4% (1%) 3%
Total hardware
revenues (8%) (3%) (6%) (8%) (6%)
-------- -------- -------- -------- --------
TOTAL COMPANY
Total cloud and on-
premise software
revenues $ 6,576 $ 7,329 $ 7,170 $ 8,400 $ 29,475
======== ======== ======== ======== ========
Total hardware
revenues $ 1,165 $ 1,334 $ 1,299 $ 1,407 $ 5,205
======== ======== ======== ======== ========
AS REPORTED GROWTH
RATES
Total cloud and on-
premise software
revenues 6% 5% 1% (6%) 1%
Total hardware
revenues (8%) 1% (2%) (4%) (3%)
CONSTANT CURRENCY
GROWTH RATES (2)
Total cloud and on-
premise software
revenues 6% 8% 7% 2% 5%
Total hardware
revenues (8%) 4% 5% 5% 2%
-------- -------- -------- -------- --------
Fiscal 2016
----------------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
-------- -------- -------- -------- --------
AMERICAS
Total cloud and on-
premise software
revenues $ 3,684 $ 3,927 $ 3,964 $ 4,771 $ 16,346
======== ======== ======== ======== ========
Total hardware
revenues $ 589 $ 595 $ 571 $ 650 $ 2,404
======== ======== ======== ======== ========
AS REPORTED GROWTH
RATES
Total cloud and on-
premise software
revenues 2% (3%) (1%) (3%) (2%)
Total hardware
revenues 1% (17%) (17%) (14%) (12%)
CONSTANT CURRENCY
GROWTH RATES (2)
Total cloud and on-
premise software
revenues 6% 0% 1% (2%) 1%
Total hardware
revenues 6% (14%) (13%) (11%) (9%)
-------- -------- -------- -------- --------
EUROPE / MIDDLE EAST
/ AFRICA
Total cloud and on-
premise software
revenues $ 1,873 $ 2,066 $ 2,069 $ 2,462 $ 8,471
======== ======== ======== ======== ========
Total hardware
revenues $ 330 $ 316 $ 349 $ 382 $ 1,377
======== ======== ======== ======== ========
AS REPORTED GROWTH
RATES
Total cloud and on-
premise software
revenues (6%) (8%) (5%) 4% (3%)
Total hardware
revenues (2%) (17%) (8%) (10%) (9%)
CONSTANT CURRENCY
GROWTH RATES (2)
Total cloud and on-
premise software
revenues 7% 3% 2% 5% 4%
Total hardware
revenues 14% (6%) (1%) (8%) (1%)
-------- -------- -------- -------- --------
ASIA PACIFIC
Total cloud and on-
premise software
revenues $ 901 $ 1,016 $ 1,051 $ 1,206 $ 4,173
======== ======== ======== ======== ========
Total hardware
revenues $ 209 $ 212 $ 215 $ 251 $ 887
======== ======== ======== ======== ========
AS REPORTED GROWTH
RATES
Total cloud and on-
premise software
revenues (7%) (3%) 7% 9% 2%
Total hardware
revenues (14%) (11%) (8%) 8% (7%)
CONSTANT CURRENCY
GROWTH RATES (2)
Total cloud and on-
premise software
revenues 7% 6% 13% 11% 9%
Total hardware
revenues (3%) (3%) (3%) 9% 0%
-------- -------- -------- -------- --------
TOTAL COMPANY
Total cloud and on-
premise software
revenues $ 6,458 $ 7,009 $ 7,084 $ 8,439 $ 28,990
======== ======== ======== ======== ========
Total hardware
revenues $ 1,128 $ 1,123 $ 1,135 $ 1,283 $ 4,668
======== ======== ======== ======== ========
AS REPORTED GROWTH
RATES
Total cloud and on-
premise software
revenues (2%) (4%) (1%) 0% (2%)
Total hardware
revenues (3%) (16%) (13%) (9%) (10%)
CONSTANT CURRENCY
GROWTH RATES (2)
Total cloud and on-
premise software
revenues 6% 2% 3% 2% 3%
Total hardware
revenues 6% (10%) (8%) (7%) (5%)
-------- -------- -------- -------- --------
(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, 2015 and 2014 for the fiscal 2016 and fiscal
2015 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 2016 FINANCIAL RESULTS
EXPLANATION OF NON-GAAP MEASURES
To supplement our financial results presented on a GAAP basis, we use the non-GAAP measures indicated in the tables, which exclude certain business combination accounting entries and expenses related to acquisitions, as well as other significant expenses including stock-based compensation, that we believe are helpful in understanding our past financial performance and our future results. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Compensation of our executives is based in part on the performance of our business based on these non-GAAP measures. Our non-GAAP financial measures reflect adjustments based on the following items, as well as the related income tax effects:
- Cloud software as a service and platform as a service, software license updates and product support and hardware support deferred revenues: Business combination accounting rules require us to account for the fair values of cloud software as a service and platform as a service contracts, software license updates and product support contracts and hardware support contracts assumed in connection with our acquisitions. Because these contracts are generally one year in duration, our GAAP revenues generally for the one year period subsequent to our acquisition of a business do not reflect the full amount of revenues on these assumed cloud and support contracts that would have otherwise been recorded by the acquired entity. The non-GAAP adjustment to our cloud software as a service and platform as a service revenues, software license updates and product support revenues and hardware support revenues is intended to include, and thus reflect, the full amount of such revenues. We believe the adjustment to these revenues is useful to investors as a measure of the ongoing performance of our business. We have historically experienced high renewal rates on our software license updates and product support contracts and our objective is to increase the renewal rates on acquired and new cloud software as a service and platform as a service and hardware support contracts; however, we cannot be certain that our customers will renew our cloud software as a service and platform as a service contracts, software license updates and product support contracts or our hardware support contracts.
- 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 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 personnel related costs for transitional employees, other acquired employee related costs, stock-based compensation expenses (in addition to the stock-based compensation expenses described above), integration related professional services, certain business combination adjustments including adjustments after the measurement period has ended and certain other operating items, 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 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 generally diminish over time with respect to past acquisitions, we generally will incur these expenses in connection with any future acquisitions.
Contact: Ken Bond Oracle Investor Relations 1.650.607.0349 Email Contact Deborah Hellinger Oracle Corporate Communications 1.212.508.7935 Email Contact
Source: Oracle Corporation
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