8-K
ORACLE CORP (ORCL)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 15, 2021
Oracle Corporation
(Exact name of registrant as specified in its charter)
| Delaware | 001-35992 | 54-2185193 |
|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission<br><br><br>File Number) | (IRS Employer<br><br><br>Identification No.) |
2300 Oracle Way, Austin, Texas 78741
(Address of principal executive offices) (Zip Code)
(737) 867-1000
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.01 per share<br><br><br>3.125% senior notes due July 2025 | ORCL | New York Stock Exchange<br><br><br>New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Section 2—Financial Information
Item 2.02 Results of Operations and Financial Condition
On June 15, 2021, Oracle Corporation (“Oracle”) issued a press release announcing financial results for its fiscal fourth quarter ended May 31, 2021. A copy of this press release is furnished as Exhibit 99.1 to this report.
Section 8—Other Events
Item 8.01 Other Events
Oracle announced that its Board of Directors has declared a cash dividend of $0.32 per share of outstanding common stock payable on July 29, 2021, to stockholders of record as of the close of business on July 15, 2021.
Section 9—Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| Exhibit No. | Description of Exhibit |
|---|---|
| 99.1 | Press Release dated June 15, 2021 |
| 104 | Cover Page Interactive Data File - the cover page iXBRL tags are embedded within the Inline XBRL document |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ORACLE CORPORATION | ||
|---|---|---|
| Dated: June 15, 2021 | By: | /S/ WILLIAM COREY WEST |
| William Corey West<br><br><br>Executive Vice President, Chief Accounting Officer<br><br><br>(Principal Accounting Officer) |
orcl-ex991_6.htm
Exhibit 99.1
For Immediate Release
| Contact: | Ken Bond | Deborah Hellinger |
|---|---|---|
| Oracle Investor Relations | Oracle Corporate Communications | |
| 1.650.607.0349 | 1.212.508.7935 | |
| ken.bond@oracle.com | deborah.hellinger@oracle.com |
Oracle Announces Fiscal 2021 Fourth Quarter and Fiscal Full Year Financial Results
| • | Q4 FY21 Earnings Per Share: GAAP EPS up 39% to $1.37, Non-GAAP EPS up 29% to $1.54 |
|---|---|
| • | Q4 Cloud Application Revenue: Fusion ERP up 46%, Fusion HCM up 35%, NetSuite ERP up 26% |
| --- | --- |
| • | Q4 Cloud Infrastructure Revenue: Gen2 Cloud plus Autonomous Database up over 100% |
| --- | --- |
AUSTIN, Texas, June 15, 2021 -- Oracle Corporation (NYSE: ORCL) today announced fiscal 2021 Q4 results. Total quarterly revenues were up 8% year-over-year to $11.2 billion. Cloud services and license support revenues were up 8% to $7.4 billion. Cloud license and on-premise license revenues were up 9% to $2.1 billion.
Q4 GAAP operating income was up 5% to $4.5 billion, and GAAP operating margin was 40%. Non-GAAP operating income was up 6% to $5.4 billion and non-GAAP operating margin was 49%. GAAP net income was up 29% to $4.0 billion, and GAAP earnings per share was up 39% to $1.37. Non-GAAP net income was up 20% to $4.5 billion, and non-GAAP earnings per share was up 29% to $1.54.
Short-term deferred revenues were up 10% from last year to $8.8 billion. Operating cash flow was up 21% to a record $15.9 billion during the trailing twelve months.
Fiscal year 2021 total revenues were up 4% year-over-year to $40.5 billion. Cloud services and license support revenues were up 5% to $28.7 billion. Cloud license and on-premise license revenues were up 5% to $5.4 billion.
Fiscal year 2021 GAAP operating income was up 9% to $15.2 billion, and GAAP operating margin was 38%. Non-GAAP operating income was up 9% to $19.0 billion, and non-GAAP operating margin was 47%. GAAP net income was up 36% to $13.7 billion, while non-GAAP net income was up 11% to $14.1 billion. GAAP earnings per share increased 48% to $4.55, while non-GAAP earnings per share was up 21% to $4.67.
“Our Q4 performance was absolutely outstanding with total revenue beating guidance by nearly $200 million, and non-GAAP earnings per share beating guidance by $0.24,” said Oracle CEO, Safra Catz. “Our multi-billion dollar Fusion and NetSuite cloud applications businesses saw dramatic increases in their already rapid revenue growth rates: Fusion ERP was up 30% in Q3 and up 46% in Q4, Fusion HCM was up 23% in Q3 and up 35% in Q4, NetSuite was up 24% in Q3 and up 26% in Q4. Oracle Fusion is the world’s biggest cloud ERP business; Oracle NetSuite is the world’s second biggest cloud ERP business. Revenue from our Gen2 Cloud Infrastructure business including Autonomous Database grew over 100% in Q4. The accelerating growth rates of both our applications and infrastructure cloud businesses this year drove earnings per share growth up to 21% in FY21. That is the fourth consecutive year of double-digit earnings per share growth at Oracle Corporation.”
“The world’s two most popular databases are the Oracle Autonomous Database and Oracle MySQL,” said Oracle Chairman and CTO, Larry Ellison. “The Oracle Database once again delivered solid revenue growth in FY21. And while our Oracle Database business as measured by revenue currently dwarfs our MySQL database business—that is about to change because the latest version of Oracle MySQL has been upgraded to include a revolutionary new ultra-high-performance parallel processing query engine called HeatWave. Independent analysts have tested and confirmed that Oracle MySQL with HeatWave runs 10 to 100 times faster than Amazon’s version of MySQL called Aurora. This technological breakthrough is causing several of Amazon’s customers to start moving their Aurora workloads to Oracle MySQL. And industry analysts are telling us they are seeing a 10x increase in Oracle Cloud Infrastructure customer inquiries. Both the Oracle Autonomous Database and Oracle MySQL with HeatWave technology have captured the technology high-ground in the cloud database business—and that bodes well for the future of the Oracle Cloud.”
The board of directors declared a quarterly cash dividend of $0.32 per share of outstanding common stock. This dividend will be paid to stockholders of record as of the close of business on July 15, 2021, with a payment date of July 29, 2021.
| • | A sample list of customers which purchased Oracle Cloud services during the quarter will be available at www.oracle.com/customers/earnings. |
|---|---|
| • | A list of recent technical innovations and announcements is available at www.oracle.com/news. |
| --- | --- |
| • | To learn what industry analysts have been saying about Oracle’s products & services see www.oracle.com/corporate/analyst-reports.html. |
| --- | --- |
Earnings Conference Call and Webcast
Oracle will hold a conference call and webcast today to discuss these results at 4:00 p.m. Central. A live and replay webcast will be available on the Oracle Investor Relations website at www.oracle.com/investor.
About Oracle
The Oracle Cloud offers complete suites of integrated applications plus 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, Java and MySQL are registered trademarks of Oracle.
"Safe Harbor" Statement: Statements in this press release relating to Oracle's future plans, expectations, beliefs, intentions and prospects, including statements regarding future growth in our Oracle Database and Oracle Cloud businesses are "forward-looking statements" and are subject to material risks and uncertainties. Many factors could affect our current expectations and our actual results, and could cause actual results to differ materially. We presently consider the following to be among the important factors that could cause actual results to differ materially from expectations: (1) The COVID-19 pandemic has affected how we and our customers are operating our respective businesses, and the duration and extent to which this will impact our future results of operations and our overall financial performance remains uncertain. (2) Our success depends upon our ability to develop new products and services, integrate acquired products and services and enhance our existing products and services. (3) Our cloud strategy, including our Oracle Cloud Software-as-a-Service and Infrastructure-as-a-Service offerings, may adversely affect our revenues and profitability. (4) We might experience significant coding, manufacturing or configuration errors in our cloud, license and hardware offerings. (5) If the security measures for our products and services are compromised and as a result, our data, our customers' data or our IT systems are accessed improperly, made unavailable, or improperly modified, our products and services may be perceived as vulnerable, our brand and reputation could be damaged, the IT services we provide to our customers could be disrupted, and customers may stop using our products and services, all of which could reduce our revenue and earnings, increase our expenses and expose us to legal claims and regulatory actions. (6) Our business practices with respect to data could give rise to operational interruption, liabilities or reputational harm as a result of governmental regulation, legal requirements or industry standards relating to privacy and data protection. (7) Economic, political and market conditions can adversely affect our business, results of operations and financial condition, including our revenue growth and profitability, which in turn could adversely affect our stock price. (8) If we are unable to compete effectively, the results of operations and prospects for our business could be harmed. (9) Our international sales and operations subject us to additional risks that can adversely affect our operating results. (10) Acquisitions present many risks, and we may not achieve the financial and strategic goals that were contemplated at the time of a transaction. A detailed discussion of these factors and other risks that affect our business is contained in our SEC filings, including our most recent reports on Form 10-K and Form 10-Q, particularly under the heading "Risk Factors." Copies of these filings are available online from the SEC or by contacting Oracle Corporation's Investor Relations Department at (650) 506-4073 or by clicking on SEC Filings on Oracle’s Investor Relations website at http://www.oracle.com/investor. All information set forth in this press release is current as of June 15, 2021. Oracle undertakes no duty to update any statement in light of new information or future events.
ORACLE CORPORATION
Q4 FISCAL 2021 FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ in millions, except per share data)
| Three Months Ended May 31, | % Increase | % Increase<br><br><br>(Decrease) | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | % of<br><br><br>Revenues | 2020 | % of<br><br><br>Revenues | (Decrease)<br><br><br>in US $ | in Constant<br><br><br>Currency (1) | |||||
| REVENUES | ||||||||||
| Cloud services and license support | $ | 7,389 | 66% | $ | 6,845 | 66% | 8% | 4% | ||
| Cloud license and on-premise license | 2,144 | 19% | 1,959 | 19% | 9% | 5% | ||||
| Hardware | 882 | 8% | 901 | 8% | (2%) | (6%) | ||||
| Services | 812 | 7% | 735 | 7% | 11% | 6% | ||||
| Total revenues | 11,227 | 100% | 10,440 | 100% | 8% | 4% | ||||
| OPERATING EXPENSES | ||||||||||
| Cloud services and license support | 1,214 | 11% | 1,012 | 10% | 20% | 17% | ||||
| Hardware | 253 | 2% | 288 | 3% | (12%) | (15%) | ||||
| Services | 655 | 6% | 669 | 6% | (2%) | (7%) | ||||
| Sales and marketing | 2,077 | 19% | 1,959 | 19% | 6% | 2% | ||||
| Research and development | 1,715 | 15% | 1,479 | 14% | 16% | 14% | ||||
| General and administrative | 306 | 3% | 278 | 3% | 10% | 6% | ||||
| Amortization of intangible assets | 342 | 3% | 366 | 3% | (7%) | (7%) | ||||
| Acquisition related and other | 30 | 0% | 11 | 0% | 158% | 146% | ||||
| Restructuring | 94 | 1% | 69 | 1% | 37% | 25% | ||||
| Total operating expenses | 6,686 | 60% | 6,131 | 59% | 9% | 6% | ||||
| OPERATING INCOME | 4,541 | 40% | 4,309 | 41% | 5% | 0% | ||||
| Interest expense | (697 | ) | (6%) | (580 | ) | (6%) | 20% | 20% | ||
| Non-operating income (expenses), net | 313 | 3% | (33 | ) | 0% | * | * | |||
| INCOME BEFORE PROVISION FOR INCOME TAXES | 4,157 | 37% | 3,696 | 35% | 12% | 6% | ||||
| Provision for income taxes | (124 | ) | (1%) | (580 | ) | (5%) | (79%) | (80%) | ||
| NET INCOME | $ | 4,033 | 36% | $ | 3,116 | 30% | 29% | 22% | ||
| EARNINGS PER SHARE: | ||||||||||
| Basic | $ | 1.42 | $ | 1.01 | ||||||
| Diluted | $ | 1.37 | $ | 0.99 | ||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||||
| Basic | 2,847 | 3,091 | ||||||||
| Diluted | 2,943 | 3,162 | ||||||||
| (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, 2020, 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, 2021 compared with the corresponding prior year period increased our revenues by 4 percentage points, operating expenses by 3 percentage points and operating income by 5 percentage points. | |||||||||
| --- | --- | |||||||||
| * | Not meaningful | |||||||||
| --- | --- |
ORACLE CORPORATION
Q4 FISCAL 2021 FINANCIAL RESULTS
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)
($ in millions, except per share data)
| Three Months Ended May 31, | % Increase (Decrease)<br>in US | % Increase (Decrease) in<br><br><br>Constant Currency (2) | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021<br><br><br>GAAP | Adj. | 2021<br><br><br>Non-GAAP | 2020<br><br><br>GAAP | Adj. | 2020<br><br><br>Non-GAAP | GAAP | GAAP | Non-GAAP | |||||||||||||
| TOTAL REVENUES | $ | 11,227 | $ | — | $ | 11,227 | $ | 10,440 | $ | 1 | $ | 10,441 | 8% | 4% | 4% | ||||||
| Cloud services and license support | 7,389 | — | 7,389 | 6,845 | 1 | 6,846 | 8% | 4% | 4% | ||||||||||||
| TOTAL OPERATING EXPENSES | $ | 6,686 | $ | (908 | ) | $ | 5,778 | $ | 6,131 | $ | (832 | ) | $ | 5,299 | 9% | 6% | 6% | ||||
| Stock-based compensation (3) | 442 | (442 | ) | — | 386 | (386 | ) | — | 15% | 15% | * | ||||||||||
| Amortization of intangible assets (4) | 342 | (342 | ) | — | 366 | (366 | ) | — | (7%) | (7%) | * | ||||||||||
| Acquisition related and other | 30 | (30 | ) | — | 11 | (11 | ) | — | 158% | 146% | * | ||||||||||
| Restructuring | 94 | (94 | ) | — | 69 | (69 | ) | — | 37% | 25% | * | ||||||||||
| OPERATING INCOME | $ | 4,541 | $ | 908 | $ | 5,449 | $ | 4,309 | $ | 833 | $ | 5,142 | 5% | 0% | 1% | ||||||
| OPERATING MARGIN % | 40% | 49% | 41% | 49% | (82) bp. | (140) bp. | (109) bp. | ||||||||||||||
| INCOME TAX EFFECTS (5) | $ | (124 | ) | $ | (417 | ) | $ | (541 | ) | $ | (580 | ) | $ | (170 | ) | $ | (750 | ) | (79%) | (80%) | (31%) |
| NET INCOME | $ | 4,033 | $ | 491 | $ | 4,524 | $ | 3,116 | $ | 663 | $ | 3,779 | 29% | 22% | 14% | ||||||
| DILUTED EARNINGS PER SHARE | $ | 1.37 | $ | 1.54 | $ | 0.99 | $ | 1.20 | 39% | 31% | 22% | ||||||||||
| DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | 2,943 | — | 2,943 | 3,162 | — | 3,162 | (7%) | (7%) | (7%) |
All values are in US Dollars.
| (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, 2020, 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<br><br><br>May 31, 2021 | Three Months Ended<br><br><br>May 31, 2020 | |||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| GAAP | Adj. | Non-GAAP | GAAP | Adj. | Non-GAAP | |||||||||
| Cloud services and license support | $ | 35 | $ | (35 | ) | $ | — | $ | 27 | $ | (27 | ) | $ | — |
| Hardware | 3 | (3 | ) | — | 3 | (3 | ) | — | ||||||
| Services | 14 | (14 | ) | — | 12 | (12 | ) | — | ||||||
| Sales and marketing | 80 | (80 | ) | — | 69 | (69 | ) | — | ||||||
| Research and development | 291 | (291 | ) | — | 254 | (254 | ) | — | ||||||
| General and administrative | 19 | (19 | ) | — | 21 | (21 | ) | — | ||||||
| Total stock-based compensation | $ | 442 | $ | (442 | ) | $ | — | $ | 386 | $ | (386 | ) | $ | — |
| (4) | Estimated future annual amortization expense related to intangible assets as of May 31, 2021 was as follows: | |||||||||||||
| --- | --- | |||||||||||||
| Fiscal 2022 | $ | 1,122 | ||||||||||||
| --- | --- | --- | ||||||||||||
| Fiscal 2023 | 698 | |||||||||||||
| Fiscal 2024 | 453 | |||||||||||||
| Fiscal 2025 | 123 | |||||||||||||
| Fiscal 2026 | 24 | |||||||||||||
| Thereafter | 10 | |||||||||||||
| Total intangible assets, net | $ | 2,430 | ||||||||||||
| (5) | Income tax effects were calculated reflecting an effective GAAP tax rate of 3.0% and 15.7% in the fourth quarter of fiscal 2021 and 2020, respectively, and an effective non-GAAP tax rate of 10.7% and 16.6% in the fourth quarter of fiscal 2021 and 2020, respectively. The difference in our GAAP and non-GAAP tax rates in each of the fourth quarter of fiscal 2021 and 2020 was primarily due to the net tax effects on stock-based compensation expense and acquisition related items, including the tax effects of amortization of intangible assets. | |||||||||||||
| --- | --- | |||||||||||||
| * | Not meaningful | |||||||||||||
| --- | --- |
ORACLE CORPORATION
FISCAL 2021 YEAR TO DATE FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ in millions, except per share data)
| Year Ended May 31, | % Increase | % Increase<br><br><br>(Decrease) | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | % of<br><br><br>Revenues | 2020 | % of<br><br><br>Revenues | (Decrease)<br><br><br>in US $ | in Constant<br><br><br>Currency (1) | |||||
| REVENUES | ||||||||||
| Cloud services and license support | $ | 28,700 | 71% | $ | 27,392 | 70% | 5% | 3% | ||
| Cloud license and on-premise license | 5,399 | 13% | 5,127 | 13% | 5% | 2% | ||||
| Hardware | 3,359 | 8% | 3,443 | 9% | (2%) | (4%) | ||||
| Services | 3,021 | 8% | 3,106 | 8% | (3%) | (5%) | ||||
| Total revenues | 40,479 | 100% | 39,068 | 100% | 4% | 2% | ||||
| OPERATING EXPENSES | ||||||||||
| Cloud services and license support | 4,353 | 11% | 4,006 | 10% | 9% | 7% | ||||
| Hardware | 972 | 2% | 1,116 | 3% | (13%) | (14%) | ||||
| Services | 2,530 | 6% | 2,816 | 7% | (10%) | (12%) | ||||
| Sales and marketing | 7,682 | 19% | 8,094 | 21% | (5%) | (7%) | ||||
| Research and development | 6,527 | 16% | 6,067 | 15% | 8% | 7% | ||||
| General and administrative | 1,254 | 3% | 1,181 | 3% | 6% | 6% | ||||
| Amortization of intangible assets | 1,379 | 4% | 1,586 | 4% | (13%) | (14%) | ||||
| Acquisition related and other | 138 | 0% | 56 | 0% | 147% | 145% | ||||
| Restructuring | 431 | 1% | 250 | 1% | 73% | 66% | ||||
| Total operating expenses | 25,266 | 62% | 25,172 | 64% | 0% | (1%) | ||||
| OPERATING INCOME | 15,213 | 38% | 13,896 | 36% | 9% | 6% | ||||
| Interest expense | (2,496 | ) | (6%) | (1,995 | ) | (5%) | 25% | 25% | ||
| Non-operating income, net | 282 | 0% | 162 | 0% | 74% | 95% | ||||
| INCOME BEFORE BENEFIT FROM (PROVISION FOR) INCOME TAXES | 12,999 | 32% | 12,063 | 31% | 8% | 4% | ||||
| Benefit from (provision for) income taxes | 747 | 2% | (1,928 | ) | (5%) | * | * | |||
| NET INCOME | $ | 13,746 | 34% | $ | 10,135 | 26% | 36% | 30% | ||
| EARNINGS PER SHARE: | ||||||||||
| Basic | $ | 4.67 | $ | 3.16 | ||||||
| Diluted | $ | 4.55 | $ | 3.08 | ||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||||
| Basic | 2,945 | 3,211 | ||||||||
| Diluted | 3,022 | 3,294 | ||||||||
| (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, 2020, 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, 2021 compared with the corresponding prior year period increased our revenues by 2 percentage points, operating expenses by 1 percentage point and operating income by 3 percentage points. | |||||||||
| --- | --- | |||||||||
| * | Not meaningful | |||||||||
| --- | --- |
ORACLE CORPORATION
FISCAL 2021 YEAR TO DATE FINANCIAL RESULTS
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)
($ in millions, except per share data)
| Year Ended May 31, | % Increase (Decrease)<br>in US | % Increase (Decrease) in<br><br><br>Constant Currency (2) | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021<br><br><br>GAAP | Adj. | 2021<br><br><br>Non-GAAP | 2020<br><br><br>GAAP | Adj. | 2020<br><br><br>Non-GAAP | GAAP | GAAP | Non-GAAP | ||||||||||||
| TOTAL REVENUES | $ | 40,479 | $ | 2 | $ | 40,481 | $ | 39,068 | $ | 4 | $ | 39,072 | 4% | 2% | 2% | |||||
| Cloud services and license support | 28,700 | 2 | 28,702 | 27,392 | 4 | 27,396 | 5% | 3% | 3% | |||||||||||
| TOTAL OPERATING EXPENSES | $ | 25,266 | $ | (3,785 | ) | $ | 21,481 | $ | 25,172 | $ | (3,482 | ) | $ | 21,690 | 0% | (1%) | (2%) | |||
| Stock-based compensation (3) | 1,837 | (1,837 | ) | — | 1,590 | (1,590 | ) | — | 16% | 16% | * | |||||||||
| Amortization of intangible assets (4) | 1,379 | (1,379 | ) | — | 1,586 | (1,586 | ) | — | (13%) | (14%) | * | |||||||||
| Acquisition related and other | 138 | (138 | ) | — | 56 | (56 | ) | — | 147% | 145% | * | |||||||||
| Restructuring | 431 | (431 | ) | — | 250 | (250 | ) | — | 73% | 66% | * | |||||||||
| OPERATING INCOME | $ | 15,213 | $ | 3,787 | $ | 19,000 | $ | 13,896 | $ | 3,486 | $ | 17,382 | 9% | 6% | 6% | |||||
| OPERATING MARGIN % | 38% | 47% | 36% | 44% | 201 bp. | 151 bp. | 206 bp. | |||||||||||||
| INCOME TAX EFFECTS (5) | $ | 747 | $ | (3,408 | ) | $ | (2,661 | ) | $ | (1,928 | ) | $ | (939 | ) | $ | (2,867 | ) | * | * | (10%) |
| NET INCOME | $ | 13,746 | $ | 379 | $ | 14,125 | $ | 10,135 | $ | 2,547 | $ | 12,682 | 36% | 30% | 8% | |||||
| DILUTED EARNINGS PER SHARE | $ | 4.55 | $ | 4.67 | $ | 3.08 | $ | 3.85 | 48% | 43% | 18% | |||||||||
| DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | 3,022 | — | 3,022 | 3,294 | — | 3,294 | (8%) | (8%) | (8%) |
All values are in US Dollars.
| (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, 2020, 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<br><br><br>May 31, 2021 | Year Ended<br><br><br>May 31, 2020 | |||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| GAAP | Adj. | Non-GAAP | GAAP | Adj. | Non-GAAP | |||||||||
| Cloud services and license support | $ | 134 | $ | (134 | ) | $ | — | $ | 110 | $ | (110 | ) | $ | — |
| Hardware | 11 | (11 | ) | — | 11 | (11 | ) | — | ||||||
| Services | 55 | (55 | ) | — | 54 | (54 | ) | — | ||||||
| Sales and marketing | 313 | (313 | ) | — | 261 | (261 | ) | — | ||||||
| Research and development | 1,188 | (1,188 | ) | — | 1,035 | (1,035 | ) | — | ||||||
| General and administrative | 136 | (136 | ) | — | 119 | (119 | ) | — | ||||||
| Total stock-based compensation | $ | 1,837 | $ | (1,837 | ) | $ | — | $ | 1,590 | $ | (1,590 | ) | $ | — |
| (4) | Estimated future annual amortization expense related to intangible assets as of May 31, 2021 was as follows: | |||||||||||||
| --- | --- | |||||||||||||
| Fiscal 2022 | $ | 1,122 | ||||||||||||
| --- | --- | --- | ||||||||||||
| Fiscal 2023 | 698 | |||||||||||||
| Fiscal 2024 | 453 | |||||||||||||
| Fiscal 2025 | 123 | |||||||||||||
| Fiscal 2026 | 24 | |||||||||||||
| Thereafter | 10 | |||||||||||||
| Total intangible assets, net | $ | 2,430 | ||||||||||||
| (5) | Income tax effects were calculated reflecting an effective GAAP tax rate of (5.7%) and 16.0% in fiscal 2021 and 2020, respectively, and an effective non-GAAP tax rate of 15.9% and 18.4% in fiscal 2021 and 2020, respectively. The difference in our GAAP and non-GAAP tax rates for fiscal 2021 was primarily due to a net tax benefit of $2.3 billion related to the partial realignment of our legal entity structure (refer to Appendix A for additional information), the net tax effects on stock-based compensation expense, and the net tax effects related to acquisition related items, including the net tax effects on amortization of intangible assets. The difference between our GAAP and non-GAAP tax rates in fiscal 2020 was primarily due to the net tax effects on stock-based compensation expense and acquisition related items, including the tax effects of amortization of intangible assets. | |||||||||||||
| --- | --- | |||||||||||||
| * | Not meaningful | |||||||||||||
| --- | --- |
ORACLE CORPORATION
FISCAL 2021 FINANCIAL RESULTS
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in millions)
| May 31,<br><br><br>2021 | May 31,<br><br><br>2020 | |||
|---|---|---|---|---|
| ASSETS | ||||
| Current Assets: | ||||
| Cash and cash equivalents | $ | 30,098 | $ | 37,239 |
| Marketable securities | 16,456 | 5,818 | ||
| Trade receivables, net | 5,409 | 5,551 | ||
| Prepaid expenses and other current assets | 3,604 | 3,532 | ||
| Total Current Assets | 55,567 | 52,140 | ||
| Non-Current Assets: | ||||
| Property, plant and equipment, net | 7,049 | 6,244 | ||
| Intangible assets, net | 2,430 | 3,738 | ||
| Goodwill, net | 43,935 | 43,769 | ||
| Deferred tax assets | 13,636 | 3,252 | ||
| Other non-current assets | 8,490 | 6,295 | ||
| Total Non-Current Assets | 75,540 | 63,298 | ||
| TOTAL ASSETS | $ | 131,107 | $ | 115,438 |
| LIABILITIES AND EQUITY | ||||
| Current Liabilities: | ||||
| Notes payable, current | $ | 8,250 | $ | 2,371 |
| Accounts payable | 745 | 637 | ||
| Accrued compensation and related benefits | 2,017 | 1,453 | ||
| Deferred revenues | 8,775 | 8,002 | ||
| Other current liabilities | 4,377 | 4,737 | ||
| Total Current Liabilities | 24,164 | 17,200 | ||
| Non-Current Liabilities: | ||||
| Notes payable and other borrowings, non-current | 75,995 | 69,226 | ||
| Income taxes payable | 12,345 | 12,463 | ||
| Deferred tax liabilities | 7,864 | 41 | ||
| Other non-current liabilities | 4,787 | 3,791 | ||
| Total Non-Current Liabilities | 100,991 | 85,521 | ||
| Equity | 5,952 | 12,717 | ||
| TOTAL LIABILITIES AND EQUITY | $ | 131,107 | $ | 115,438 |
ORACLE CORPORATION
FISCAL 2021 FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in millions)
| Year Ended May 31, | ||||||
|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||
| Cash Flows From Operating Activities: | ||||||
| Net income | $ | 13,746 | $ | 10,135 | ||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
| Depreciation | 1,537 | 1,382 | ||||
| Amortization of intangible assets | 1,379 | 1,586 | ||||
| Deferred income taxes | (2,425 | ) | (851 | ) | ||
| Stock-based compensation | 1,837 | 1,590 | ||||
| Other, net | (39 | ) | 239 | |||
| Changes in operating assets and liabilities, net of effects from acquisitions: | ||||||
| Decrease (increase) in trade receivables, net | 333 | (445 | ) | |||
| Decrease in prepaid expenses and other assets | 622 | 665 | ||||
| Decrease in accounts payable and other liabilities | (23 | ) | (496 | ) | ||
| Decrease in income taxes payable | (1,485 | ) | (444 | ) | ||
| Increase (decrease) in deferred revenues | 405 | (222 | ) | |||
| Net cash provided by operating activities | 15,887 | 13,139 | ||||
| Cash Flows From Investing Activities: | ||||||
| Purchases of marketable securities and other investments | (37,982 | ) | (5,731 | ) | ||
| Proceeds from maturities of marketable securities | 26,024 | 4,687 | ||||
| Proceeds from sales of marketable securities and other investments | 1,036 | 12,575 | ||||
| Acquisitions, net of cash acquired | (41 | ) | (124 | ) | ||
| Capital expenditures | (2,135 | ) | (1,564 | ) | ||
| Net cash (used for) provided by investing activities | (13,098 | ) | 9,843 | |||
| Cash Flows From Financing Activities: | ||||||
| Payments for repurchases of common stock | (20,934 | ) | (19,240 | ) | ||
| Proceeds from issuances of common stock | 1,786 | 1,588 | ||||
| Shares repurchased for tax withholdings upon vesting of restricted stock-based awards | (666 | ) | (665 | ) | ||
| Payments of dividends to stockholders | (3,063 | ) | (3,070 | ) | ||
| Proceeds from borrowings, net of issuance costs | 14,934 | 19,888 | ||||
| Repayments of borrowings | (2,631 | ) | (4,500 | ) | ||
| Other, net | 196 | (133 | ) | |||
| Net cash used for financing activities | (10,378 | ) | (6,132 | ) | ||
| Effect of exchange rate changes on cash and cash equivalents | 448 | (125 | ) | |||
| Net (decrease) increase in cash and cash equivalents | (7,141 | ) | 16,725 | |||
| Cash and cash equivalents at beginning of period | 37,239 | 20,514 | ||||
| Cash and cash equivalents at end of period | $ | 30,098 | $ | 37,239 |
ORACLE CORPORATION
FISCAL 2021 FINANCIAL RESULTS
FREE CASH FLOW - TRAILING 4-QUARTERS (1)
($ in millions)
| Fiscal 2020 | Fiscal 2021 | |||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | |||||||||||||||||
| GAAP Operating Cash Flow | $ | 13,829 | $ | 13,796 | $ | 13,947 | $ | 13,139 | $ | 13,092 | $ | 13,967 | $ | 14,659 | $ | 15,887 | ||||||||
| Capital Expenditures | (1,663 | ) | (1,591 | ) | (1,544 | ) | (1,564 | ) | (1,614 | ) | (1,833 | ) | (1,851 | ) | (2,135 | ) | ||||||||
| Free Cash Flow | $ | 12,166 | $ | 12,205 | $ | 12,403 | $ | 11,575 | $ | 11,478 | $ | 12,134 | $ | 12,808 | $ | 13,752 | ||||||||
| % Growth over prior year | (12%) | (11%) | (6%) | (10%) | (6%) | (1%) | 3% | 19% | ||||||||||||||||
| GAAP Net Income | $ | 10,955 | $ | 10,933 | $ | 10,759 | $ | 10,135 | $ | 10,249 | $ | 10,380 | $ | 12,830 | $ | 13,746 | ||||||||
| Free Cash Flow as a % of Net Income | 111% | 112% | 115% | 114% | 112% | 117% | 100% | 100% | ||||||||||||||||
| (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 2021 FINANCIAL RESULTS
SUPPLEMENTAL ANALYSIS OF GAAP REVENUES (1)
($ in millions)
| Fiscal 2020 | Fiscal 2021 | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Q1 | Q2 | Q3 | Q4 | TOTAL | Q1 | Q2 | Q3 | Q4 | TOTAL | |||||||||||
| REVENUES BY OFFERINGS | ||||||||||||||||||||
| Cloud services and license support | $ | 6,805 | $ | 6,811 | $ | 6,930 | $ | 6,845 | $ | 27,392 | $ | 6,947 | $ | 7,112 | $ | 7,252 | $ | 7,389 | $ | 28,700 |
| Cloud license and on-premise license | 812 | 1,126 | 1,231 | 1,959 | 5,127 | 886 | 1,092 | 1,276 | 2,144 | 5,399 | ||||||||||
| Hardware | 815 | 871 | 857 | 901 | 3,443 | 814 | 844 | 820 | 882 | 3,359 | ||||||||||
| Services | 786 | 806 | 778 | 735 | 3,106 | 720 | 752 | 737 | 812 | 3,021 | ||||||||||
| Total revenues | $ | 9,218 | $ | 9,614 | $ | 9,796 | $ | 10,440 | $ | 39,068 | $ | 9,367 | $ | 9,800 | $ | 10,085 | $ | 11,227 | $ | 40,479 |
| AS REPORTED REVENUE GROWTH RATES | ||||||||||||||||||||
| Cloud services and license support | 3% | 3% | 4% | 1% | 3% | 2% | 4% | 5% | 8% | 5% | ||||||||||
| Cloud license and on-premise license | (6%) | (7%) | (2%) | (22%) | (12%) | 9% | (3%) | 4% | 9% | 5% | ||||||||||
| Hardware | (10%) | (2%) | (6%) | (9%) | (7%) | 0% | (3%) | (4%) | (2%) | (2%) | ||||||||||
| Services | (3%) | (1%) | (1%) | (11%) | (4%) | (8%) | (7%) | (5%) | 11% | (3%) | ||||||||||
| Total revenues | 0% | 1% | 2% | (6%) | (1%) | 2% | 2% | 3% | 8% | 4% | ||||||||||
| CONSTANT CURRENCY REVENUE GROWTH RATES (2) | ||||||||||||||||||||
| Cloud services and license support | 4% | 4% | 5% | 3% | 4% | 2% | 4% | 2% | 4% | 3% | ||||||||||
| Cloud license and on-premise license | (6%) | (7%) | 0% | (21%) | (11%) | 8% | (5%) | 0% | 5% | 2% | ||||||||||
| Hardware | (9%) | (1%) | (5%) | (7%) | (6%) | 0% | (3%) | (6%) | (6%) | (4%) | ||||||||||
| Services | (2%) | 0% | 0% | (8%) | (3%) | (8%) | (8%) | (8%) | 6% | (5%) | ||||||||||
| Total revenues | 2% | 1% | 3% | (4%) | 0% | 2% | 1% | 0% | 4% | 2% | ||||||||||
| CLOUD SERVICES AND LICENSE SUPPORT REVENUES BY ECOSYSTEM | ||||||||||||||||||||
| Applications cloud services and license support | $ | 2,704 | $ | 2,753 | $ | 2,809 | $ | 2,749 | $ | 11,015 | $ | 2,816 | $ | 2,901 | $ | 2,952 | $ | 3,043 | $ | 11,712 |
| Infrastructure cloud services and license support | 4,101 | 4,058 | 4,121 | 4,096 | 16,377 | 4,131 | 4,211 | 4,300 | 4,346 | 16,988 | ||||||||||
| Total cloud services and license support revenues | $ | 6,805 | $ | 6,811 | $ | 6,930 | $ | 6,845 | $ | 27,392 | $ | 6,947 | $ | 7,112 | $ | 7,252 | $ | 7,389 | $ | 28,700 |
| AS REPORTED REVENUE GROWTH RATES | ||||||||||||||||||||
| Applications cloud services and license support | 5% | 5% | 6% | 1% | 4% | 4% | 5% | 5% | 11% | 6% | ||||||||||
| Infrastructure cloud services and license support | 2% | 1% | 2% | 0% | 1% | 1% | 4% | 4% | 6% | 4% | ||||||||||
| Total cloud services and license support revenues | 3% | 3% | 4% | 1% | 3% | 2% | 4% | 5% | 8% | 5% | ||||||||||
| CONSTANT CURRENCY REVENUE GROWTH RATES (2) | ||||||||||||||||||||
| Applications cloud services and license support | 6% | 6% | 7% | 3% | 5% | 4% | 5% | 3% | 7% | 5% | ||||||||||
| Infrastructure cloud services and license support | 3% | 2% | 4% | 3% | 3% | 1% | 3% | 2% | 2% | 2% | ||||||||||
| Total cloud services and license support revenues | 4% | 4% | 5% | 3% | 4% | 2% | 4% | 2% | 4% | 3% | ||||||||||
| GEOGRAPHIC REVENUES | ||||||||||||||||||||
| Americas | $ | 5,150 | $ | 5,304 | $ | 5,363 | $ | 5,746 | $ | 21,563 | $ | 5,068 | $ | 5,259 | $ | 5,424 | $ | 6,076 | $ | 21,828 |
| Europe/Middle East/Africa | 2,553 | 2,695 | 2,835 | 2,952 | 11,035 | 2,738 | 2,852 | 2,981 | 3,324 | 11,894 | ||||||||||
| Asia Pacific | 1,515 | 1,615 | 1,598 | 1,742 | 6,470 | 1,561 | 1,689 | 1,680 | 1,827 | 6,757 | ||||||||||
| Total revenues | $ | 9,218 | $ | 9,614 | $ | 9,796 | $ | 10,440 | $ | 39,068 | $ | 9,367 | $ | 9,800 | $ | 10,085 | $ | 11,227 | $ | 40,479 |
| (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, 2020 and 2019 for the fiscal 2021 and fiscal 2020 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 2021 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, with the exception of the item described under income tax effects related to the partial realignment of our legal entity structure:
• Cloud services and license support revenues: Business combination accounting rules require us to account for the fair values of cloud services and license support contracts assumed in connection with our acquisitions. The non-GAAP adjustments to our cloud services and license support revenues are intended to include, and thus reflect, the full amount of such revenues. We believe the adjustments to these revenues are useful to investors as a measure of the ongoing performance of our business as we generally expect to experience high renewal rates for these contracts at their stated values during the post combination periods.
• Stock-based compensation expenses: We have excluded the effect of stock-based compensation expenses from our non-GAAP operating expenses and net income measures. Although stock-based compensation is a key incentive offered to our employees, and we believe such compensation contributed to the revenues earned during the periods presented and also believe it will contribute to the generation of future period revenues, we continue to evaluate our business performance excluding stock-based compensation expenses. Stock-based compensation expenses will recur in future periods.
• Amortization of intangible assets: We have excluded the effect of amortization of intangible assets from our non-GAAP operating expenses and net income measures. Amortization of intangible assets is inconsistent in amount and frequency and is significantly affected by the timing and size of our acquisitions. Investors should note that the use of intangible assets contributed to our revenues earned during the periods presented and will contribute to our future period revenues as well. Amortization of intangible assets will recur in future periods.
• Acquisition related and other expenses; and restructuring expenses: We have excluded the effect of acquisition related and other expenses and the effect of restructuring expenses from our non-GAAP operating expenses and net income measures. We incurred expenses in connection with our acquisitions and also incurred certain other operating expenses or income, which we generally would not have otherwise incurred in the periods presented as a part of our continuing operations. Acquisition related and other expenses primarily consist of personnel related costs for transitional and certain other employees, certain business combination adjustments including adjustments after the measurement period has ended and certain other operating items, net. Restructuring expenses consist of employee severance and other exit costs. We believe it is useful for investors to understand the effects of these items on our total operating expenses. Although acquisition related and other expenses and restructuring expenses generally diminish over time with respect to past acquisitions and/or strategic initiatives, we generally will incur these expenses in connection with any future acquisitions and/or strategic initiatives.
• Income tax effects related to the partial realignment of our legal entity structure: We recorded a net income tax benefit of $2.3 billion during fiscal 2021 which related to the partial realignment of our legal entity structure that resulted in the intra-group transfer of certain intellectual property rights. A portion of this net benefit will reduce cash tax paid and give rise to a net deferred tax expense. We have excluded the net benefit and related net deferred tax expense from our non-GAAP income tax effects and net income measures for fiscal 2021. We believe making these adjustments provides insight to our operating performance and comparability to past operating results.
9