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Oracle Announces Fiscal 2024 Fourth Quarter and Fiscal Full Year Financial Results

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Oracle (NYSE: ORCL) announced its fiscal 2024 Q4 and full-year results. Q4 total revenues reached $14.3 billion, a 3% increase year-over-year in USD and 4% in constant currency. Cloud revenue comprised $5.3 billion, up 20% in USD and constant currency. Notable segments include Cloud Infrastructure (IaaS) at $2.0 billion (up 42%) and Cloud Application (SaaS) at $3.3 billion (up 10%).

Q4 GAAP EPS was $1.11, while non-GAAP EPS was $1.63. Fiscal 2024 total revenue stood at $53.0 billion, a 6% rise. Operating cash flow hit $18.7 billion, up 9%. Oracle's Q4 GAAP net income was $3.1 billion, with non-GAAP net income at $4.6 billion. The company noted a 44% increase in Total Remaining Performance Obligations to $98 billion, driven by AI-related contracts, including a $12.5 billion deal with Open AI to train ChatGPT. The board declared a $0.40/share dividend, payable on July 25, 2024.

Positive
  • Q4 total revenues increased by 3% YoY to $14.3 billion.
  • Cloud revenue grew by 20% YoY to $5.3 billion.
  • Cloud Infrastructure (IaaS) revenue increased by 42% YoY to $2.0 billion.
  • Fiscal year total revenues up 6% to $53.0 billion.
  • Operating cash flow for fiscal year 2024 increased by 9% to $18.7 billion.
  • Total Remaining Performance Obligations rose by 44% to $98 billion.
  • Non-GAAP operating income increased by 8% YoY to $6.7 billion in Q4.
  • Q4 GAAP net income was $3.1 billion.
Negative
  • Cloud license and on-premise license revenues declined by 15% YoY to $1.8 billion in Q4.
  • Fiscal year 2024 cloud license and on-premise license revenues decreased by 12% to $5.1 billion.
  • GAAP operating margin was 33%, down from non-GAAP margin of 47%.

The reported fiscal Q4 and FY 2024 financial results of Oracle Corporation offer a mixed bag for investors. The increase in total revenues of 3% for Q4 and 6% for the full year in USD terms indicates moderate growth. More notably, the substantial growth in cloud revenue (IaaS and SaaS) at 20% in USD and constant currency shows a strong shift towards cloud services, which is a strategically positive sign. The operating margins are robust, with GAAP operating margins at 33% for Q4 and 29% for the full year, suggesting efficient cost management.

However, there are areas of concern as well. The decline in cloud license and on-premise license revenues of 15% for Q4 suggests a significant drop in traditional software sales. This could imply a cannibalization effect as the company transitions to cloud services, but it also highlights a potential vulnerability in licensing revenue. Additionally, while the large AI contracts and partnerships with Microsoft and Google are promising, their successful integration and realization will need to be closely monitored.

For retail investors, the positive cash flows and declared dividend of $0.40 per share are attractive. However, the mixed revenue signals and dependency on cloud growth warrant a watchful eye on future quarters.

Oracle's focus on AI and cloud partnerships stands out in their latest report. Signing over $12.5 billion in AI contracts, including a significant one with OpenAI for ChatGPT training, underscores Oracle's strategic pivot toward high-growth technology sectors. The expansion of their multicloud cooperation with Microsoft and Google further cements Oracle's position in the cloud market, aiming to leverage the scalability and flexibility of hybrid cloud environments.

The launch of 11 OCI datacenters inside Azure and plans for 12 within Google Cloud, reflect significant infrastructure investments that should enhance Oracle's capabilities to handle large-scale data processing and AI workloads. This move also aligns with the growing trend of cloud interoperability among major tech players, which can be a competitive advantage.

However, the technological shift also comes with challenges, particularly in ensuring seamless integration and maintaining service reliability amid rapid scaling. Investors should remain cautious about potential technical and operational risks associated with such large-scale implementations.

The announcement spotlights Oracle's strategic market moves and potential for future growth. The 44% increase in total remaining performance obligations (RPO) to $98 billion is an indicative metric of future revenue streams, reflecting high demand and strong sales momentum. This rise in RPO, driven by AI and cloud contracts, suggests that Oracle is successfully capturing market demand in these high-growth areas.

In the broader market context, Oracle's multicloud strategy offers a competitive edge. By integrating its services with Microsoft and Google clouds, Oracle is positioning itself to attract a diverse customer base, leveraging existing relationships and infrastructures. This can potentially enhance market penetration and customer retention.

Nonetheless, the company faces stiff competition from other cloud service providers like AWS and Azure. Therefore, while Oracle's strategic initiatives are promising, maintaining market share and continuous innovation will be critical for sustained growth.

  • Q4 Total Remaining Performance Obligations up 44% to $98 billion
  • Q4 GAAP Earnings per Share $1.11, Non-GAAP Earnings per Share $1.63
  • Q4 Total Revenue $14.3 billion, up 3% in USD, up 4% in constant currency
  • Q4 Cloud Revenue (IaaS plus SaaS) $5.3 billion, up 20% in USD and constant currency
  • Q4 Cloud Infrastructure (IaaS) Revenue $2.0 billion, up 42% in USD and constant currency
  • Q4 Cloud Application (SaaS) Revenue $3.3 billion, up 10% in USD and constant currency
  • Q4 Fusion Cloud ERP (SaaS) Revenue $0.8 billion, up 14% in USD and constant currency
  • Q4 NetSuite Cloud ERP (SaaS) Revenue $0.8 billion, up 19% in USD and constant currency
  • FY 2024 Total Revenue $53.0 billion, up 6% in USD and constant currency

AUSTIN, Texas, June 11, 2024 /PRNewswire/ -- Oracle Corporation (NYSE: ORCL) today announced fiscal 2024 Q4 and full-year 2024 results. Total quarterly revenues were up 3% year-over-year in USD and up 4% in constant currency to $14.3 billion. Cloud services and license support revenues were up 9% in USD and up 10% in constant currency to $10.2 billion. Cloud license and on-premise license revenues were down 15% in USD and down 14% in constant currency to $1.8 billion

Q4 GAAP operating income was $4.7 billion. Non-GAAP operating income was $6.7 billion, up 8% in USD and up 9% in constant currency. GAAP operating margin was 33%, and non-GAAP operating margin was 47%. GAAP net income was $3.1 billion, and non-GAAP net income was $4.6 billion. Q4 GAAP earnings per share was $1.11 while non-GAAP earnings per share was $1.63.

Short-term deferred revenues were $9.3 billion. Operating cash flow was $18.7 billion during fiscal year 2024, up 9% in USD.

Fiscal year 2024 total revenues were up 6% in USD and constant currency to $53.0 billion. Cloud services and license support revenues were up 12% in USD and up 11% in constant currency to $39.4 billion. Cloud license and on-premise license revenues were down 12% in USD and constant currency to $5.1 billion.           

Fiscal year 2024 GAAP operating income was $15.4 billion, and GAAP operating margin was 29%. Non-GAAP operating income was $23.1 billion, and non-GAAP operating margin was 44%. GAAP net income was $10.5 billion, while non-GAAP net income was $15.7 billion. GAAP earnings per share was $3.71, while non-GAAP earnings per share was $5.56.

"In Q3 and Q4, Oracle signed the largest sales contracts in our history—driven by enormous demand for training AI large language models in the Oracle Cloud," said Oracle CEO, Safra Catz. "These record level sales drove RPO up 44% to $98 billion. Throughout fiscal year 2025, I expect continued strong AI demand to push Oracle sales and RPO even higher—and result in double-digit revenue growth this fiscal year. I also expect that each successive quarter should grow faster than the previous quarter—as OCI capacity begins to catch up with demand. In Q4 alone, Oracle signed over 30 AI sales contracts totaling more than $12.5 billion—including one with Open AI to train ChatGPT in the Oracle Cloud."

"Our multicloud cooperation with Microsoft expanded significantly in Q4, as we agreed to work together to support Open AI and ChatGPT—and 11 of the 23 OCI datacenters we are building inside Azure went live," said Oracle Chairman and CTO, Larry Ellison. "As this Azure/OCI cloud capacity becomes available to the large installed base of Microsoft and Oracle customers, it will turbocharge our cloud database growth. Now customers can run any and every version of the Oracle database—Autonomous, 23ai Vector DB, etc.— in both the Azure and the Oracle Clouds. As customers continue to choose and use multiple clouds, Hyperscalers like Microsoft and Google are responding by interconnecting their clouds.  Oracle recently signed an agreement with Google to interconnect our clouds—and initially build 12 OCI datacenters inside the Google Cloud. We expect the Oracle database to be available within the Google Cloud in September this year."

The board of directors declared a quarterly cash dividend of $0.40 per share of outstanding common stock. This dividend will be paid to stockholders of record as of the close of business on July 11, 2024, with a payment date of July 25, 2024.

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

Oracle offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. For more information about Oracle (NYSE: ORCL), please visit us at www.oracle.com.

Trademarks

Oracle, Java, MySQL, and NetSuite are registered trademarks of Oracle Corporation. NetSuite was the first cloud company—ushering in the new era of cloud computing.

"Safe Harbor" Statement: Statements in this press release relating to future plans, expectations, beliefs, intentions and prospects, including expectations for AI demand driving revenue growth and the timing of such growth, the effects of our multicloud strategy on cloud database growth, and our plans for datacenters and Oracle database availability inside the Google Cloud, are "forward-looking statements" and are subject to material risks and uncertainties. Risks and uncertainties that could affect our current expectations and our actual results, include, among others: our ability to develop new products and services, integrate acquired products and services and enhance our existing products and services; our management of complex cloud and hardware offerings, including the sourcing of technologies and technology components; significant coding, manufacturing or configuration errors in our offerings; risks associated with acquisitions; economic, political and market conditions; information technology system failures, privacy and data security concerns; cybersecurity breaches; unfavorable legal proceedings, government investigations, and complex and changing laws and regulations. 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's Investor Relations Department at (650) 506-4073 or by clicking on SEC Filings on the Oracle Investor Relations website at www.oracle.com/investor/. All information set forth in this press release is current as of June 11, 2024. Oracle undertakes no duty to update any statement in light of new information or future events.

 

 ORACLE  CORPORATION




Q4 FISCAL 2024 FINANCIAL RESULTS


 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


($ in millions, except per share data)













Three Months Ended May 31,


% Increase




% Increase

(Decrease)





% of 


% of 

(Decrease)

in Constant




2024

Revenues

2023

Revenues

in US $

Currency (1)


REVENUES









Cloud services and license support 

$ 10,234

72 %

$ 9,370

68 %

9 %

10 %



Cloud license and on-premise license

1,838

13 %

2,152

15 %

(15 %)

(14 %)



Hardware

842

6 %

850

6 %

(1 %)

0 %



Services

1,373

9 %

1,465

11 %

(6 %)

(6 %)



      Total revenues

14,287

100 %

13,837

100 %

3 %

4 %


OPERATING EXPENSES









Cloud services and license support 

2,522

18 %

2,157

16 %

17 %

17 %



Hardware

241

2 %

261

2 %

(7 %)

(7 %)



Services

1,160

8 %

1,312

9 %

(12 %)

(11 %)



Sales and marketing

2,114

15 %

2,289

17 %

(8 %)

(7 %)



Research and development 

2,226

15 %

2,226

16 %

0 %

0 %



General and administrative

402

3 %

400

3 %

1 %

1 %



Amortization of intangible assets

743

5 %

870

6 %

(15 %)

(15 %)



Acquisition related and other

101

1 %

51

0 %

97 %

97 %



Restructuring

92

0 %

131

1 %

(29 %)

(29 %)



      Total operating expenses 

9,601

67 %

9,697

70 %

(1 %)

(1 %)


OPERATING INCOME

4,686

33 %

4,140

30 %

13 %

15 %



Interest expense

(878)

(6 %)

(955)

(7 %)

(8 %)

(8 %)



Non-operating expenses, net

(26)

0 %

(76)

(1 %)

(66 %)

(68 %)


INCOME BEFORE INCOME TAXES

3,782

27 %

3,109

22 %

22 %

24 %



(Provision for) benefit from income taxes

(639)

(5 %)

210

2 %

*

*


NET INCOME

$    3,143

22 %

$ 3,319

24 %

(5 %)

(4 %)











EARNINGS PER SHARE:









Basic

$      1.14


$    1.23






Diluted

$      1.11


$    1.19





WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:









Basic

2,753


2,707






Diluted

2,834


2,796


















































(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, 2023,

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, 2024 compared

with the corresponding prior year period decreased our total revenues by 1 percentage point and operating income by 2 percentage

points.


*

Not meaningful

















 

 

ORACLE  CORPORATION






















Q4 FISCAL 2024 FINANCIAL RESULTS

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

($ in millions, except per share data)

























Three Months Ended May 31,


% Increase (Decrease)
in US $

% Increase (Decrease) in
Constant Currency (2) 




2024




2024



2023




2023


GAAP

Non-GAAP

GAAP

Non-GAAP





GAAP


Adj.


Non-GAAP



GAAP


Adj.


Non-GAAP
























TOTAL REVENUES


$       14,287


$           -


$       14,287



$       13,837


$             -


$       13,837


3 %

3 %

4 %

4 %























TOTAL OPERATING EXPENSES


$         9,601


$   (1,983)


$         7,618



$         9,697


$    (2,016)


$         7,681


(1 %)

(1 %)

(1 %)

(1 %)



     Stock-based compensation (3)


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FAQ

What were Oracle's Q4 2024 total revenues?

Oracle's Q4 2024 total revenues were $14.3 billion, up 3% year-over-year in USD and 4% in constant currency.

How did Oracle's cloud revenue perform in Q4 2024?

Oracle's Q4 2024 cloud revenue was $5.3 billion, a 20% increase year-over-year in USD and constant currency.

What was Oracle's Q4 2024 GAAP earnings per share?

Oracle's Q4 2024 GAAP earnings per share was $1.11.

What was the total revenue for Oracle in fiscal year 2024?

Oracle's total revenue for fiscal year 2024 was $53.0 billion, up 6% in USD and constant currency.

How much did Oracle's Q4 2024 Cloud Infrastructure (IaaS) revenue increase?

Oracle's Q4 2024 Cloud Infrastructure (IaaS) revenue increased by 42% year-over-year to $2.0 billion.

What is Oracle's Total Remaining Performance Obligations (RPO) as of Q4 2024?

Oracle's Total Remaining Performance Obligations (RPO) as of Q4 2024 were $98 billion, up 44% year-over-year.

What was Oracle's fiscal year 2024 operating cash flow?

Oracle's operating cash flow for fiscal year 2024 was $18.7 billion, up 9% year-over-year.

How did Oracle's cloud license and on-premise license revenues perform in fiscal year 2024?

Oracle's cloud license and on-premise license revenues for fiscal year 2024 decreased by 12% to $5.1 billion.

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