Q3 FY19 GAAP EPS INCREASED TO $0.76 and NON-GAAP EPS UP 8% TO $0.87

Actualizado el 14 de marzo, 2019 - 21.02hs.

Q3 FY19 GAAP EPS INCREASED TO $0.76 and NON-GAAP EPS UP 8% TO $0.87

Operating Income Up 3% in USD and 7% in Constant Currency

PR Newswire

REDWOOD SHORES, Calif., March 14, 2019 /PRNewswire/ -- Oracle Corporation (NYSE: ORCL) today announced fiscal 2019 Q3 results. Total Revenues were $9.6 billion, down 1% in USD and up 3% in constant currency compared to Q3 last year. Cloud Services and License Support revenues were $6.7 billion, while Cloud License and On-Premise License revenues were $1.3 billion. Total Cloud Services and License Support plus Cloud License and On-Premise License revenues were $7.9 billion, unchanged in USD and up 3% in constant currency.

GAAP Operating Income was up 3% to $3.4 billion and GAAP Operating Margin was 35%. Non-GAAP Operating Income was up 2% to $4.3 billion and non-GAAP Operating Margin was 44%. GAAP Net Income increased to $2.7 billion and non-GAAP Net Income was down 8% to $3.2 billion. GAAP Earnings Per Share increased to $0.76 while non-GAAP Earnings Per Share was up 8% to $0.87.

Short-term deferred revenues were up 1% to $8.0 billion compared to a year ago. Operating Cash Flow was $14.8 billion during the trailing twelve months.

"I'm pleased with Q3 non-GAAP results as revenues grew 3%, operating income increased 5% and EPS grew 12% in constant currency," said Oracle CEO, Safra Catz. "Our overall operating margin improved to 44% as our lower margin hardware business continued to get smaller while our higher margin cloud business continued to get bigger. With year-to-date non-GAAP EPS growth rate now at 16% in constant currency, we will comfortably deliver another year of double-digit EPS growth."

"Our Fusion HCM, ERP, Supply Chain and Manufacturing Cloud applications revenue in total grew 32% in Q3," said Oracle CEO, Mark Hurd. "Our NetSuite ERP Cloud applications also delivered strong results with a revenue growth rate of 30%. That said, let me call your attention to the following approved statement about Oracle's entire applications business from industry analyst IDC."

Per IDC's latest annual market share results, Oracle is the #1 Enterprise Applications vendor in North America based on market share and revenue, surpassing Salesforce.com and SAP.
Source: IDC Semiannual Software Tracker, Oct. 2018. Market share and revenue for 2H2017-1H2018. North America is the USA and Canada. Enterprise Applications refer to the IDC markets CRM, Enterprise Resource Management (including HCM, Financials, Procurement, Order Management, PPM, EAM), SCM, and Production Applications.

"The future of Oracle's Cloud Infrastructure business rests upon our highly-secure Gen2 Cloud Infrastructure featuring the world's first and only Autonomous Database," said Oracle CTO, Larry Ellison. "By the end of Q3 we had nearly 1,000 paying Autonomous Database customers and we added around 4,000 new Autonomous Database trials in Q3. It's early days, but this is the most successful introduction of a new product in Oracle's forty year history."

Oracle also announced that its Board of Directors declared a quarterly cash dividend of $0.24 per share of outstanding common stock, reflecting a 26% increase over the current quarterly dividend of $0.19.  Larry Ellison, Oracle's Chairman of the Board, Chief Technology Officer and largest stockholder, did not participate in the deliberation or the vote on this matter.  This increased dividend will be paid to stockholders of record as of the close of business on April 11, 2019, with a payment date of April 25, 2019.

Q3 Fiscal 2019 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 Q3 results and fiscal 2019 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: 9995836.

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 growth of our EPS and the future of Oracle's Cloud Infrastructure business, are all "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 strategy, including our Oracle Software as a Service and Infrastructure as a Service offerings, may not be successful. (2) If we are unable to develop new or sufficiently differentiated products and services, integrate acquired products and services, or enhance and improve our existing products and support services in a timely manner, or price our products and services to meet market demand, customers may not purchase or subscribe to our software, hardware or cloud offerings or renew software support, hardware support or cloud subscriptions contracts. (3) Enterprise customers rely on our cloud, license and hardware offerings and related services to run their businesses and significant coding, manufacturing or configuration errors in our cloud, license and hardware offerings and related services could expose us to product liability, performance and warranty claims, as well as cause significant harm to our brand and reputation, which could impact our future sales. (4) 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 and we may experience legal claims and reduced sales. (5) 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. (6) 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. (7) Our international sales and operations subject us to additional risks that can adversely affect our operating results. (8) We have a selective and 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 U.S. Securities and Exchange Commission (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 March 14, 2019. Oracle undertakes no duty to update any statement in light of new information or future events.

 

ORACLE  CORPORATION


Q3 FISCAL 2019 FINANCIAL RESULTS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in millions, except per share data)






% Increase




Three Months Ended February 28,

% Increase

(Decrease)





% of 


% of 

(Decrease)

in Constant




2019

Revenues

2018

Revenues

in US $

Currency (1)


REVENUES









Cloud services and license support 

$ 6,662

69%

$   6,587

68%

1%

4%



Cloud license and on-premise license

1,251

13%

1,299

14%

(4%)

0%



Hardware

915

10%

994

10%

(8%)

(4%)



Services

786

8%

796

8%

(1%)

3%



Total revenues

9,614

100%

9,676

100%

(1%)

3%


OPERATING EXPENSES









Cloud services and license support 

937

10%

894

9%

5%

7%



Hardware

339

4%

393

4%

(14%)

(10%)



Services

700

7%

709

7%

(1%)

3%



Sales and marketing

2,051

21%

2,042

21%

0%

4%



Research and development 

1,426

15%

1,496

16%

(5%)

(3%)



General and administrative

316

3%

339

4%

(7%)

(4%)



Amortization of intangible assets

407

4%

394

4%

3%

3%



Acquisition related and other

(4)

0%

3

0%

(208%)

(217%)



Restructuring

43

1%

91

1%

(53%)

(51%)



Total operating expenses 

6,215

65%

6,361

66%

(2%)

0%


OPERATING INCOME 

3,399

35%

3,315

34%

3%

7%



Interest expense

(509)

(5%)

(533)

(5%)

(5%)

(5%)



Non-operating income, net 

198

2%

409

4%

(52%)

(52%)


INCOME BEFORE PROVISION FOR INCOME TAXES

3,088

32%

3,191

33%

(3%)

1%



Provision for income taxes (2)

343

4%

7,238

75%

(95%)

(95%)


NET INCOME (LOSS)

$ 2,745

28%

$ (4,047)

(42%)

168%

168%











EARNINGS (LOSS) PER SHARE:









Basic

$    0.78


$   (0.98)






Diluted

$    0.76


$   (0.98)





WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:









Basic

3,526


4,122






Diluted

3,617


4,122


















































(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, 2018, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during the respective periods. Movements in international currencies relative to the United States dollar during the three months ended February 28, 2019 compared with the corresponding prior year period decreased our revenues by 4 percentage points, operating expenses by 2 percentage points and operating income by 4 percentage points.





(2)

Provision for income taxes for the periods presented included the impacts of the U.S. 2017 Tax Cuts and Jobs Act, which was signed into law during our third quarter of fiscal 2018, and for which additional discussion is included in Appendix A.











 

ORACLE  CORPORATION


Q3 FISCAL 2019 FINANCIAL RESULTS

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

($ in millions, except per share data)




Three Months Ended February 28,


% Increase (Decrease)
in US $

% Increase (Decrease) in
Constant Currency (2) 



2019




2019



2018




2018


GAAP

Non-GAAP

GAAP

Non-GAAP




GAAP


Adj.


Non-GAAP



GAAP


Adj.


Non-GAAP























TOTAL REVENUES

$ 9,614


$       4


$       9,618



$   9,676


$           5


$       9,681


(1%)

(1%)

3%

3%


Cloud services and license support

6,662


4


6,666



6,587


5


6,592


1%

1%

4%

4%





















TOTAL OPERATING EXPENSES

$ 6,215


$ (873)


$       5,342



$   6,361


$     (874)


$       5,487


(2%)

(3%)

0%

0%


Sales and marketing (3)

2,051


(89)


1,962



2,042


(84)


1,958


0%

0%

4%

4%


Stock-based compensation (4)

338


(338)


-



302


(302)


-


12%

*

12%

*


Amortization of intangible assets (5)

407


(407)


-



394


(394)


-


3%

*

3%

*


Acquisition related and other

(4)


4


-



3


(3)


-


(208%)

*

(217%)

*


Restructuring

43


(43)


-



91


(91)


-


(53%)

*

(51%)

*


OPERATING INCOME

$ 3,399


$   877


$       4,276



$   3,315


$      879


$       4,194


3%

2%

7%

5%


OPERATING MARGIN %

35%




44%



34%




43%


110 bp.

115 bp.

139 bp.

119 bp.


INCOME TAX EFFECTS (6)

$     343


$   466


$          809



$   7,238


$  (6,582)


$          656


(95%)

23%

(95%)

28%


NET INCOME (LOSS)

$ 2,745


$   411


$       3,156



$  (4,047)


$   7,461


$       3,414


168%

(8%)

168%

(4%)


DILUTED EARNINGS (LOSS) PER SHARE (7)

$    0.76




$         0.87



$    (0.98)




$         0.81


177%

8%

177%

12%


DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (7) 

3,617


-


3,617



4,122


114


4,236


(12%)

(15%)

(12%)

(15%)










































(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, 2018, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during the respective periods.






















(3)

Non-GAAP adjustments to sales and marketing expenses were as follows:








Three Months Ended


















February 28,


















2019


2018

















Stock-based compensation (4)

$     (89)


$    (87)

















Acquired deferred sales commissions amortization

-


3

















Total non-GAAP sales and marketing adjustments

$     (89)


$    (84)




































(4)

Stock-based compensation was included in the following GAAP operating expense categories:




























Three Months Ended



Three Months Ended









February 28, 2019



February 28, 2018









GAAP


Adj.


Non-GAAP



GAAP


Adj.


Non-GAAP








Cloud services and license support

$       26


$    (26)


$             -



$        21


$       (21)


$             -








Hardware

2


(2)


-



2


(2)


-








Services

12


(12)


-



13


(13)


-








Research and development

254


(254)


-



221


(221)


-








General and administrative

44


(44)


-



45


(45)


-








Subtotal

338


(338)


-



302


(302)


-








Sales and marketing

89


(89)


-



87


(87)


-








Total stock-based compensation

$     427


$ (427)


$             -



$      389


$     (389)


$             -



























(5)

Estimated future annual amortization expense related to intangible assets as of February 28, 2019 was as follows:



Remainder of fiscal 2019

$     401



















Fiscal 2020

1,492



















Fiscal 2021

1,269



















Fiscal 2022

1,018



















Fiscal 2023

622



















Fiscal 2024

391



















Thereafter

485



















Total intangible assets, net

$ 5,678






































(6)

Income tax effects were calculated reflecting an effective GAAP tax rate of 11.1% and 226.8% in the third quarter of fiscal 2019 and 2018, respectively, and an effective non-GAAP tax rate of 20.4% and 16.1% in the third quarter of fiscal 2019 and 2018, respectively. The difference between our GAAP and non-GAAP tax rates in the third quarter of fiscal 2019 and 2018 was primarily due to the impacts of the U.S. Tax Cuts and Jobs Act of 2017 (refer to Appendix A for additional information).


(7)

In the third quarter of fiscal 2018, GAAP diluted loss per share was calculated excluding the dilutive effects of 114 million shares related to employee stock plans as the effect would be anti-dilutive.






















*

Not meaningful













 

ORACLE  CORPORATION


Q3 FISCAL 2019 YEAR TO DATE FINANCIAL RESULTS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in millions, except per share data)






% Increase




Nine Months Ended February 28,

% Increase

(Decrease)





% of 


% of 

(Decrease)

in Constant




2019

Revenues

2018

Revenues

in US $

Currency (1)


REVENUES









Cloud services and license support 

$ 19,908

70%

$ 19,454

69%

2%

4%



Cloud license and on-premise license

3,334

12%

3,525

12%

(5%)

(3%)



Hardware 

2,711

10%

2,878

10%

(6%)

(3%)



Services

2,416

8%

2,512

9%

(4%)

(1%)



Total revenues

28,369

100%

28,369

100%

0%

2%


OPERATING EXPENSES









Cloud services and license support 

2,807

10%

2,645

9%

6%

8%



Hardware

998

4%

1,116

4%

(11%)

(8%)



Services

2,127

7%

2,126

8%

0%

3%



Sales and marketing

6,191

22%

6,118

22%

1%

4%



Research and development 

4,464

16%

4,541

16%

(2%)

0%



General and administrative

935

3%

977

3%

(4%)

(2%)



Amortization of intangible assets

1,265

4%

1,205

4%

5%

5%



Acquisition related and other

29

0%

32

0%

(10%)

(7%)



Restructuring

275

1%

506

2%

(46%)

(45%)



Total operating expenses 

19,091

67%

19,266

68%

(1%)

1%


OPERATING INCOME 

9,278

33%

9,103

32%

2%

5%



Interest expense

(1,557)

(5%)

(1,477)

(5%)

5%

5%



Non-operating income, net 

681

2%

891

3%

(23%)

(24%)


INCOME BEFORE PROVISION FOR INCOME TAXES

8,402

30%

8,517

30%

(1%)

2%



Provision for income taxes (2) 

1,059

4%

8,206

29%

(87%)

(87%)


NET INCOME 

$    7,343

26%

$       311

1%

2,263%

3,666%











EARNINGS PER SHARE:









Basic

$      1.98


$      0.07






Diluted

$      1.93


$      0.07





WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:









Basic

3,716


4,146






Diluted

3,811


4,268


















































(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, 2018, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during the respective periods. Movements in international currencies relative to the United States dollar during the nine months ended February 28, 2019 compared with the corresponding prior year period decreased our revenues by 2 percentage points, operating expenses by 2 percentage points and operating income by 3 percentage points.





(2)

Provision for income taxes for the periods presented included the impacts of the U.S. 2017 Tax Cuts and Jobs Act, which was signed into law during our third quarter of fiscal 2018, and for which additional discussion is included in Appendix A.











 

ORACLE  CORPORATION


Q3 FISCAL 2019 YEAR TO DATE FINANCIAL RESULTS

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

($ in millions, except per share data)




Nine Months Ended
February 28,


% Increase (Decrease)
in US $

% Increase (Decrease) in
Constant Currency (2) 



2019




2019



2018




2018


GAAP

Non-GAAP

GAAP

Non-GAAP




GAAP


Adj.


Non-GAAP



GAAP


Adj.


Non-GAAP























TOTAL REVENUES

$ 28,369


$        17


$    28,386



$ 28,369


$        39


$    28,408


0%

0%

2%

2%



Cloud services and license support

19,908


17


19,925



19,454


39


19,493


2%

2%

4%

4%






















TOTAL OPERATING EXPENSES

$ 19,091


$  (2,828)


$    16,263



$ 19,266


$  (2,933)


$    16,333


(1%)

0%

1%

2%



Sales and marketing (3)

6,191


(278)


5,913



6,118


(255)


5,863


1%

1%

4%

3%



Stock-based compensation (4)

981


(981)


-



935


(935)


-


5%

*

5%

*



Amortization of intangible assets (5)

1,265


(1,265)


-



1,205


(1,205)


-


5%

*

5%

*



Acquisition related and other

29


(29)


-



32


(32)


-


(10%)

*

(7%)

*



Restructuring

275


(275)


-



506


(506)


-


(46%)

*

(45%)

*


OPERATING INCOME

$    9,278


$   2,845


$    12,123



$    9,103


$   2,972


$    12,075


2%

0%

5%

3%


OPERATING MARGIN %

33%




43%



32%




43%


62 bp.

20 bp.

81 bp.

20 bp.


INCOME TAX EFFECTS (6)

$    1,059


$   1,122


$       2,181



$    8,206


$  (5,688)


$       2,518


(87%)

(13%)

(87%)

(11%)


NET INCOME 

$    7,343


$   1,723


$       9,066



$       311


$   8,660


$       8,971


2,263%

1%

3,666%

4%


DILUTED EARNINGS PER SHARE

$      1.93




$         2.38



$      0.07




$         2.10


2,547%

13%

4,117%

16%


DILUTED WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING

3,811


-


3,811



4,268


-


4,268


(11%)

(11%)

(11%)

(11%)










































(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, 2018, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during the respective periods.






















(3)

Non-GAAP adjustments to sales and marketing expenses were as follows:




























Nine Months Ended


















February 28,


















2019


2018

















Stock-based compensation (4)

$     (278)


$     (275)

















Acquired deferred sales commissions amortization

-


20

















Total non-GAAP sales and marketing adjustments

$     (278)


$     (255)




































(4)

Stock-based compensation was included in the following GAAP operating expense categories:




























Nine Months Ended



Nine Months Ended









February 28, 2019



February 28, 2018









GAAP


Adj.


Non-GAAP



GAAP


Adj.


Non-GAAP








Cloud services and license support

$         74


$       (74)


$             -



$         58


$       (58)


$             -








Hardware

7


(7)


-



8


(8)


-








Services

37


(37)


-



41


(41)


-








Research and development

732


(732)


-



693


(693)


-








General and administrative

131


(131)


-



135


(135)


-








Subtotal

981


(981)


-



935


(935)


-








Sales and marketing

278


(278)


-



275


(275)


-








Acquisition related and other

-


-


-



1


(1)


-








Total stock-based compensation

$    1,259


$  (1,259)


$             -



$    1,211


$  (1,211)


$             -



























(5)

Estimated future annual amortization expense related to intangible assets as of February 28, 2019 was as follows:



Remainder of fiscal 2019

$       401



















Fiscal 2020

1,492



















Fiscal 2021

1,269



















Fiscal 2022

1,018



















Fiscal 2023

622



















Fiscal 2024

391



















Thereafter

485



















Total intangible assets, net

$    5,678






































(6)

Income tax effects were calculated reflecting an effective GAAP tax rate of 12.6% and 96.4% in the first nine months of fiscal 2019 and 2018, respectively, and an effective non-GAAP tax rate of 19.4% and 21.9% in the first nine months of fiscal 2019 and 2018, respectively. The difference between our GAAP and non-GAAP tax rates in the first nine months of fiscal 2019 and 2018 was primarily due to the impacts of the U.S. Tax Cuts and Jobs Act of 2017 (refer to Appendix A for additional information).






















*

Not meaningful












 

ORACLE  CORPORATION








Q3 FISCAL 2019 FINANCIAL RESULTS

CONDENSED CONSOLIDATED BALANCE SHEETS

($ in millions)











February 28,

May 31,




2019

2018

ASSETS





Current Assets:






Cash and cash equivalents

$   14,720


$   21,620



Marketable securities

25,310


45,641



Trade receivables, net

3,993


5,136



Prepaid expenses and other current assets

3,594


3,762




Total Current Assets

47,617


76,159


Non-Current Assets:






   Property, plant and equipment, net

6,197


5,897



   Intangible assets, net

5,678


6,670



   Goodwill, net

43,776


43,755



   Deferred tax assets

2,033


1,395



   Other non-current assets

4,137


3,975




Total Non-Current Assets

61,821


61,692


TOTAL ASSETS

$ 109,438


$ 137,851


LIABILITIES AND EQUITY





Current Liabilities:






Notes payable and other borrowings, current 

$      4,487


$      4,491



Accounts payable

603


529



Accrued compensation and related benefits

1,258


1,806



Deferred revenues

8,007


8,341



Other current liabilities

3,631


3,957




Total Current Liabilities

17,986


19,124


Non-Current Liabilities:






Notes payable and other borrowings, non-current

51,672


56,128



Income taxes payable

13,208


13,429



Other non-current liabilities

2,334


2,297




Total Non-Current Liabilities

67,214


71,854


Equity

24,238


46,873


TOTAL LIABILITIES AND EQUITY

$ 109,438


$ 137,851









 

     ORACLE  CORPORATION 


Q3 FISCAL 2019 FINANCIAL RESULTS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

($ in millions)



Nine Months Ended February 28,


2019

2018

Cash Flows From Operating Activities:





Net income 

$   7,343


$       311


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





Depreciation

900


878


Amortization of intangible assets

1,265


1,205


Deferred income taxes

(741)


(740)


Stock-based compensation

1,259


1,211


Other, net

144


(62)


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





Decrease in trade receivables, net

1,106


1,633


Decrease (increase) in prepaid expenses and other assets

168


(105)


Decrease in accounts payable and other liabilities

(647)


(607)


(Decrease) increase in income taxes payable

(410)


7,444


Decrease in deferred revenues

(258)


(442)


Net cash provided by operating activities

10,129


10,726


Cash Flows From Investing Activities:





Purchases of marketable securities and other investments

(1,310)


(24,496)


Proceeds from maturities of marketable securities and other investments

10,210


14,808


Proceeds from sales of marketable securities 

11,328


2,261


Acquisitions, net of cash acquired

(330)


-


Capital expenditures

(1,247)


(1,358)


Net cash provided by (used for) investing activities

18,651


(8,785)


Cash Flows From Financing Activities:





Payments for repurchases of common stock

(29,887)


(6,421)


Proceeds from issuances of common stock

1,468


2,116


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

(455)


(467)


Payments of dividends to stockholders

(2,126)


(2,362)


Proceeds from borrowings, net of issuance costs

-


9,945


Repayments of borrowings

(4,500)


(7,300)


Other, net

(95)


(34)


Net cash used for financing activities

(35,595)


(4,523)


Effect of exchange rate changes on cash and cash equivalents

(85)


285


Net decrease in cash and cash equivalents

(6,900)


(2,297)


Cash and cash equivalents at beginning of period

21,620


21,784


Cash and cash equivalents at end of period

$ 14,720


$ 19,487







 

 ORACLE  CORPORATION 

 Q3 FISCAL 2019 FINANCIAL RESULTS 

 FREE CASH FLOW - TRAILING 4-QUARTERS (1) 

 ($ in millions) 














 Fiscal 2018 

 Fiscal 2019 




 Q1 

 Q2 

 Q3 

 Q4 

 Q1 

 Q2 

 Q3 

 Q4 












GAAP Operating Cash Flow

$ 14,817

$ 14,581

$ 15,192

$ 15,386

$ 15,542

$ 15,238

$ 14,789














Capital Expenditures

(2,195)

(2,037)

(1,883)

(1,736)

(1,646)

(1,468)

(1,625)














Free Cash Flow

$ 12,622

$ 12,544

$ 13,309

$ 13,650

$ 13,896

$ 13,770

$ 13,164














% Growth over prior year

0%

(1%)

13%

13%

10%

10%

(1%)

























GAAP Net Income

$   9,745

$   9,932

$   3,643

$   3,587

$   3,708

$   3,827

$ 10,619














Free Cash Flow as a % of Net Income

130%

126%

365%

381%

375%

360%

124%

























(1)

To supplement our statements of cash flows presented on a GAAP basis, we use non-GAAP measures of cash flows on a trailing 4-quarter basis to analyze cash flow generated from operations. We believe free cash flow is also useful as one of the bases for comparing our performance with our competitors. The presentation of non-GAAP free cash flow is not meant to be considered in isolation or as an alternative to net income as an indicator of our performance, or as an alternative to cash flows from operating activities as a measure of liquidity.





 


 ORACLE  CORPORATION 

 Q3 FISCAL 2019 FINANCIAL RESULTS 

 SUPPLEMENTAL ANALYSIS OF GAAP REVENUES (1) 

 ($ in millions) 





 Fiscal 2018 

 Fiscal 2019 




 Q1 

 Q2 

 Q3 

 Q4 

 TOTAL 


 Q1 

 Q2 

 Q3 

 Q4 

 TOTAL 



REVENUES BY OFFERINGS














Cloud services and license support  

$ 6,407

$ 6,461

$          6,587

$    6,768

$ 26,222


$ 6,609

$ 6,637

$          6,662


$ 19,908



Cloud license and on-premise license 

894

1,331

1,299

2,247

5,772


867

1,217

1,251


3,334



Hardware 

943

941

994

1,116

3,994


904

891

915


2,711



Services  

860

856

796

883

3,395


813

817

786


2,416



















Total revenues 

$ 9,104

$ 9,589

$          9,676

$ 11,014

$ 39,383


$ 9,193

$ 9,562

$          9,614


$ 28,369


















AS REPORTED REVENUE GROWTH RATES 














Cloud services and license support  

11%

11%

11%

8%

10%


3%

3%

1%


2%



Cloud license and on-premise license 

(13%)

(1%)

(9%)

(18%)

(12%)


(3%)

(9%)

(4%)


(5%)



Hardware  

(5%)

(7%)

(3%)

0%

(4%)


(4%)

(5%)

(8%)


(6%)



Services  

6%

1%

(2%)

(1%)

1%


(5%)

(5%)

(1%)


(4%)



















Total revenues 

6%

6%

5%

0%

4%


1%

0%

(1%)


0%


















CONSTANT CURRENCY GROWTH RATES (2)














Cloud services and license support  

10%

9%

7%

6%

8%


4%

5%

4%


4%



Cloud license and on-premise license 

(14%)

(3%)

(13%)

(18%)

(13%)


0%

(6%)

0%


(3%)



Hardware  

(6%)

(9%)

(7%)

(2%)

(6%)


(3%)

(3%)

(4%)


(3%)



Services  

6%

0%

(6%)

(3%)

(1%)


(4%)

(2%)

3%


(1%)



















Total revenues 

5%

5%

1%

(1%)

2%


2%

2%

3%


2%


















CLOUD AND LICENSE REVENUES BY ECOSYSTEM (3)














Applications revenues 

$ 2,616

$ 2,668

$          2,717

$    3,022

$ 11,023


$ 2,761

$ 2,808

$          2,841


$    8,410



Infrastructure revenues 

4,685

5,124

5,169

5,993

20,971


4,715

5,046

5,072


14,832




Total cloud and license revenues 

$ 7,301

$ 7,792

$          7,886

$    9,015

$ 31,994


$ 7,476

$ 7,854

$          7,913


$ 23,242


















AS REPORTED REVENUE GROWTH RATES 














Applications revenues 

17%

15%

9%

5%

11%


6%

5%

5%


5%



Infrastructure revenues 

3%

6%

6%

(2%)

3%


1%

(2%)

(2%)


(1%)




Total cloud and license revenues 

7%

9%

7%

1%

6%


2%

1%

0%


1%


















CONSTANT CURRENCY GROWTH RATES (2)














Applications revenues 

17%

13%

7%

4%

10%


7%

7%

7%


7%



Infrastructure revenues 

1%

4%

1%

(3%)

1%


2%

1%

2%


2%




Total cloud and license revenues 

7%

7%

3%

(1%)

4%


4%

3%

3%


3%


















GEOGRAPHIC REVENUES














Americas 

$ 5,098

$ 5,281

$          5,253

$    6,016

$ 21,648


$ 5,161

$ 5,243

$          5,266


$ 15,671



Europe/Middle East/Africa 

2,535

2,796

2,881

3,197

11,409


2,576

2,782

2,781


8,139



Asia Pacific 

1,471

1,512

1,542

1,801

6,326


1,456

1,537

1,567


4,559




Total revenues 

$ 9,104

$ 9,589

$          9,676

$ 11,014

$ 39,383


$ 9,193

$ 9,562

$          9,614


$ 28,369

































(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, 2018 and 2017 for the fiscal 2019 and fiscal 2018 constant currency growth rate calculations presented, respectively, rather than the actual exchange rates in effect during the respective periods.



(3)

Applications ecosystem revenues represent the sum of applications related cloud services and license support revenues; and applications related license revenues. Infrastructure ecosystem revenues represent the sum of infrastructure related cloud services and license support revenues; and infrastructure related license revenues.  

















APPENDIX A

ORACLE CORPORATION
Q3 FISCAL 2019 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.
  • Deferred sales commissions amortization: Certain acquired companies capitalized sales commissions associated with subscription agreements and amortized these amounts over the related contractual terms. Business combination accounting rules generally require us to eliminate these capitalized sales commissions balances as of the acquisition date and our post-combination GAAP sales and marketing expenses generally do not reflect the amortization of these deferred sales commissions balances. The non-GAAP adjustment to increase our sales and marketing expenses is intended to include, and thus reflect, the full amount of amortization related to such balances as though the acquired companies operated independently in the periods presented. We believe this adjustment to sales and marketing expenses is useful to investors as a measure of the ongoing performance of our business.
  • 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 primarily consist of personnel related costs and stock-based compensation expenses for transitional and certain other employees, integration related professional services, 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 the three and nine months ended February 28, 2019, we recorded a net benefit of $236 million and $389 million, respectively, 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 recorded a net charge of $6.9 billion during the three and nine months ended February 28, 2018 related to our preliminary assessment of the one-time effects of the Act, including the one-time transition tax on certain foreign subsidiary earnings and the remeasurement of net deferred income tax balances affected by the Act. We have excluded the impacts of these items from our non-GAAP income taxes and net income measures for the third quarter and first nine months of fiscal 2019 and 2018. We believe making these adjustments provides insight to our operating performance and comparability to past operating results.

 

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SOURCE Oracle

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