Oracle Announces Fiscal 2024 Third Quarter Financial Results
- Strong Q3 results with total revenue of $13.3 billion, up 7% year-over-year
- Cloud revenue growth with Cloud Infrastructure revenue up 49% and Cloud Application revenue up 14%
- GAAP earnings per share at $0.85, non-GAAP earnings per share increased by 16% to $1.41
- Total Remaining Performance Obligations exceeded $80 billion, a new all-time record
- None.
The reported increase in non-GAAP earnings per share by 16% indicates a positive trajectory in Oracle's profitability, which is a critical metric for investors assessing company performance. The 7% year-over-year growth in total revenue suggests a stable expansion, aligning with the broader industry trend of increasing demand for cloud services. However, the 3% decline in cloud license and on-premise license revenues could reflect a shift in consumer preference towards cloud services over traditional software licenses, a trend that financial analysts would monitor for its potential to reshape revenue streams.
The remaining performance obligations (RPO) growing by 29% to $80 billion is a significant indicator of future revenue, providing a robust backlog that assures sustained income. The expectation that 43% of this RPO will be recognized as revenue over the next four quarters provides a clear forecast for short-term financial planning. The substantial operating cash flow and free cash flow figures underscore Oracle's liquidity and financial health, which may influence investor confidence and Oracle's ability to invest in strategic initiatives.
The surge in cloud infrastructure (IaaS) revenue by 49% and the overall 25% increase in cloud revenue reflect the high demand for cloud services, positioning Oracle favorably within the competitive cloud market. This growth is particularly noteworthy against the backdrop of a global cloud infrastructure market that is becoming increasingly saturated. Oracle's specific mention of the Gen2 AI infrastructure exceeding supply suggests a strong product-market fit and potential for continued market share gains.
Oracle's strategic move to transition Cerner customers to its Gen2 Cloud Infrastructure and the upcoming delivery of the Ambulatory Clinic Cloud Application Suite highlight the company's commitment to innovation and expansion within the healthcare sector. The integration of AI-driven systems and voice interfaces could set a new standard for efficiency and accuracy in healthcare technology, potentially opening up new markets and driving customer acquisition.
The emphasis on Oracle's Gen2 AI infrastructure indicates a strategic focus on artificial intelligence capabilities within their cloud offerings, which is a growing area of interest for many enterprises seeking to leverage AI for competitive advantage. The mention of hypergrowth in the Gen2 Cloud Infrastructure business suggests that Oracle is potentially outpacing competitors in a key market segment, which could have implications for its market position and influence on the technology sector.
The introduction of the Clinical Digital Assistant and the Ambulatory Clinic Cloud Application Suite represents a significant advancement in Oracle's healthcare technology offerings. The integration of voice interfaces and automatic updates to Electronic Health Records (EHR) could be a game-changer in terms of efficiency and accuracy in the healthcare industry. These innovations may not only enhance Oracle's reputation as a technology leader but also contribute to long-term revenue growth as healthcare providers seek to modernize their systems.
- Q3 GAAP Earnings per Share
, Non-GAAP Earnings per Share up$0.85 16% to$1.41 - Q3 Total Revenue
, up$13.3 billion 7% in both USD and constant currency - Q3 Total Remaining Performance Obligations up
29% to$80 billion - Q3 Cloud Revenue (IaaS plus SaaS)
, up$5.1 billion 25% in USD, up24% in constant currency - Q3 Cloud Infrastructure (IaaS) Revenue
, up$1.8 billion 49% in both USD and constant currency - Q3 Cloud Application (SaaS) Revenue
, up$3.3 billion 14% in both USD and constant currency - Q3 Fusion Cloud ERP (SaaS) Revenue
, up$0.8 billion 18% in both USD and constant currency - Q3 NetSuite Cloud ERP (SaaS) Revenue
, up$0.8 billion 21% in USD, up20% in constant currency
Q3 GAAP operating income was
Short-term deferred revenues were
"Large new cloud infrastructure contracts signed in Q3 drove Oracle's total Remaining Performance Obligations up
"In Q3, Oracle finished moving the majority of Cerner customers to Oracle's Gen2 Cloud Infrastructure," said Oracle Chairman and CTO, Larry Ellison. "In Q4, Oracle will start delivering its completely new Ambulatory Clinic Cloud Application Suite to these same customers. This new AI-driven system features an integrated voice interface called the Clinical Digital Assistant that automatically generates doctors' notes and updates Electronic Health Records—saving precious time and improving health data accuracy. The delivery of this revolutionary new healthcare technology will enable the rapid modernization of our customers' health systems over the coming year, and transform Cerner and Oracle Health into a high-growth business for years to come."
The board of directors declared a quarterly cash dividend of
- 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 and services see www.oracle.com/corporate/analyst-reports/.
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 demand for Oracle Cloud Infrastructure capacity, expectations for growth in our Cerner, Oracle Health and Gen2 Cloud Infrastructure businesses, the rate and timing of conversion of the Remaining Performance Obligations to revenue and beliefs regarding modernizing digital healthcare systems, 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 March 11, 2024. Oracle undertakes no duty to update any statement in light of new information or future events.
ORACLE CORPORATION | ||||||||
Q3 FISCAL 2024 FINANCIAL RESULTS | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
($ in millions, except per share data) | ||||||||
Three Months Ended | % Increase | |||||||
% Increase | (Decrease) | |||||||
February 29, | % of | February 28, | % of | (Decrease) | in Constant | |||
2024 | Revenues | 2023 | Revenues | in US $ | Currency (1) | |||
REVENUES | ||||||||
Cloud services and license support | $ 9,963 | 75 % | $ 8,923 | 72 % | 12 % | 11 % | ||
Cloud license and on-premise license | 1,256 | 9 % | 1,288 | 10 % | (3 %) | (3 %) | ||
Hardware | 754 | 6 % | 811 | 7 % | (7 %) | (7 %) | ||
Services | 1,307 | 10 % | 1,376 | 11 % | (5 %) | (5 %) | ||
Total revenues | 13,280 | 100 % | 12,398 | 100 % | 7 % | 7 % | ||
OPERATING EXPENSES | ||||||||
Cloud services and license support | 2,452 | 18 % | 1,980 | 16 % | 24 % | 24 % | ||
Hardware | 217 | 2 % | 244 | 2 % | (11 %) | (11 %) | ||
Services | 1,200 | 9 % | 1,215 | 10 % | (1 %) | (1 %) | ||
Sales and marketing | 2,042 | 15 % | 2,150 | 18 % | (5 %) | (6 %) | ||
Research and development | 2,248 | 17 % | 2,146 | 17 % | 5 % | 5 % | ||
General and administrative | 377 | 3 % | 402 | 3 % | (6 %) | (7 %) | ||
Amortization of intangible assets | 749 | 6 % | 886 | 7 % | (15 %) | (15 %) | ||
Acquisition related and other | 155 | 1 % | 37 | 0 % | 317 % | 317 % | ||
Restructuring | 90 | 1 % | 78 | 1 % | 15 % | 14 % | ||
Total operating expenses | 9,530 | 72 % | 9,138 | 74 % | 4 % | 4 % | ||
OPERATING INCOME | 3,750 | 28 % | 3,260 | 26 % | 15 % | 15 % | ||
Interest expense | (876) | (6 %) | (908) | (7 %) | (3 %) | (3 %) | ||
Non-operating expenses, net | (9) | 0 % | (134) | (1 %) | (94 %) | (93 %) | ||
INCOME BEFORE INCOME TAXES | 2,865 | 22 % | 2,218 | 18 % | 29 % | 29 % | ||
Provision for income taxes | 464 | 4 % | 322 | 3 % | 44 % | 44 % | ||
NET INCOME | $ 2,401 | 18 % | $ 1,896 | 15 % | 27 % | 26 % | ||
EARNINGS PER SHARE: | ||||||||
Basic | $ 0.87 | $ 0.70 | ||||||
Diluted | $ 0.85 | $ 0.68 | ||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||
Basic | 2,748 | 2,698 | ||||||
Diluted | 2,819 | 2,776 | ||||||
(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 | |||||||
ORACLE CORPORATION | ||||||||||||||||||||
Q3 FISCAL 2024 FINANCIAL RESULTS | ||||||||||||||||||||
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1) | ||||||||||||||||||||
($ in millions, except per share data) | ||||||||||||||||||||
Three Months Ended | % Increase | % Increase | ||||||||||||||||||
February 29, | February 29, | February 28, | February 28, | GAAP | Non-GAAP | GAAP | Non-GAAP | |||||||||||||
2024 | 2024 | 2023 | 2023 | |||||||||||||||||
GAAP | Adj. | Non-GAAP | GAAP | Adj. | Non-GAAP | |||||||||||||||
TOTAL REVENUES | $ 13,280 | $ - | $ 13,280 | $ 12,398 | $ - | $ 12,398 | 7 % | 7 % | 7 % | 7 % | ||||||||||
TOTAL OPERATING EXPENSES | $ 9,530 | $ (2,042) | $ 7,488 | $ 9,138 | $ (1,925) | $ 7,213 | 4 % | 4 % | 4 % | 3 % | ||||||||||
Stock-based compensation (3) | 1,048 | (1,048) | - | 924 | (924) | - | 13 % | * | 13 % | * | ||||||||||
Amortization of intangible assets (4) | 749 | (749) | - | 886 | (886) | - | (15 %) | * | (15 %) | * | ||||||||||
Acquisition related and other | 155 | (155) | - | 37 | (37) | - | 317 % | * | 317 % | * | ||||||||||
Restructuring | 90 | (90) | - | 78 | (78) | - | 15 % | * | 14 % | * | ||||||||||
OPERATING INCOME | $ 3,750 | $ 2,042 | $ 5,792 | $ 3,260 | $ 1,925 | $ 5,185 | 15 % | 12 % | 15 % | 12 % | ||||||||||
OPERATING MARGIN % | 28 % | 44 % | 26 % | 42 % | 194 bp. | 179 bp. | 194 bp. | 183 bp. | ||||||||||||
INCOME TAX EFFECTS (5) | $ 464 | $ 461 | $ 925 | $ 322 | $ 439 | $ 761 | 44 % | 22 % | 44 % | 21 % | ||||||||||
NET INCOME | $ 2,401 | $ 1,581 | $ 3,982 | $ 1,896 | $ 1,486 | $ 3,382 | 27 % | 18 % | 26 % | 18 % | ||||||||||
DILUTED EARNINGS PER SHARE | $ 0.85 | $ 1.41 | $ 0.68 | $ 1.22 | 25 % | 16 % | 24 % | 16 % | ||||||||||||
DILUTED WEIGHTED AVERAGE COMMON | 2,819 | - | 2,819 | 2,776 | - | 2,776 | 2 % | 2 % | 2 % | 2 % | ||||||||||
(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 | |||||||||||||||||||
(3) | Stock-based compensation was included in the following GAAP operating expense categories: | |||||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||||||
February 29, 2024 | February 28, 2023 | |||||||||||||||||||
GAAP | Adj. | Non-GAAP | GAAP | Adj. | Non-GAAP | |||||||||||||||
Cloud services and license support | $ 138 | $ (138) | $ - | $ 114 | $ (114) | $ - | ||||||||||||||
Hardware | 6 | (6) | - | 5 | (5) | - | ||||||||||||||
Services | 45 | (45) | - | 39 | (39) | - | ||||||||||||||
Sales and marketing | 179 | (179) | - | 158 | (158) | - | ||||||||||||||
Research and development | 584 | (584) | - | 517 | (517) | - | ||||||||||||||
General and administrative | 96 | (96) | - | 91 | (91) | - | ||||||||||||||
Total stock-based compensation | $ 1,048 | $ (1,048) | $ - | $ 924 | $ (924) | $ - | ||||||||||||||
(4) | Estimated future annual amortization expense related to intangible assets as of February 29, 2024 was as follows: | |||||||||||||||||||
Remainder of fiscal 2024 | $ 739 | |||||||||||||||||||
Fiscal 2025 | 2,303 | |||||||||||||||||||
Fiscal 2026 | 1,639 | |||||||||||||||||||
Fiscal 2027 | 672 | |||||||||||||||||||
Fiscal 2028 | 635 | |||||||||||||||||||
Fiscal 2029 | 561 | |||||||||||||||||||
Thereafter | 1,080 | |||||||||||||||||||
Total intangible assets, net | $ 7,629 | |||||||||||||||||||
(5) | Income tax effects were calculated reflecting an effective GAAP tax rate of | |||||||||||||||||||
* | Not meaningful |
ORACLE CORPORATION | ||||||||
Q3 FISCAL 2024 YEAR TO DATE FINANCIAL RESULTS | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
($ in millions, except per share data) | ||||||||
Nine Months Ended | % Increase | |||||||
% Increase | (Decrease) | |||||||
February 29, | % of | February 28, | % of | (Decrease) | in Constant | |||
2024 | Revenues | 2023 | Revenues | in US $ | Currency (1) | |||
REVENUES | ||||||||
Cloud services and license support | $ 29,149 | 75 % | $ 25,938 | 72 % | 12 % | 11 % | ||
Cloud license and on-premise license | 3,243 | 8 % | 3,627 | 10 % | (11 %) | (11 %) | ||
Hardware | 2,224 | 6 % | 2,424 | 7 % | (8 %) | (9 %) | ||
Services | 4,058 | 11 % | 4,129 | 11 % | (2 %) | (2 %) | ||
Total revenues | 38,674 | 100 % | 36,118 | 100 % | 7 % | 6 % | ||
OPERATING EXPENSES | ||||||||
Cloud services and license support | 6,905 | 18 % | 5,606 | 16 % | 23 % | 22 % | ||
Hardware | 649 | 2 % | 780 | 2 % | (17 %) | (18 %) | ||
Services | 3,665 | 9 % | 3,448 | 10 % | 6 % | 6 % | ||
Sales and marketing | 6,161 | 16 % | 6,544 | 18 % | (6 %) | (7 %) | ||
Research and development | 6,689 | 17 % | 6,397 | 18 % | 5 % | 4 % | ||
General and administrative | 1,146 | 3 % | 1,179 | 3 % | (3 %) | (4 %) | ||
Amortization of intangible assets | 2,267 | 6 % | 2,712 | 7 % | (16 %) | (16 %) | ||
Acquisition related and other | 214 | 0 % | 140 | 0 % | 53 % | 52 % | ||
Restructuring | 311 | 1 % | 359 | 1 % | (13 %) | (14 %) | ||
Total operating expenses | 28,007 | 72 % | 27,165 | 75 % | 3 % | 3 % | ||
OPERATING INCOME | 10,667 | 28 % | 8,953 | 25 % | 19 % | 17 % | ||
Interest expense | (2,636) | (7 %) | (2,550) | (7 %) | 3 % | 3 % | ||
Non-operating expenses, net | (72) | 0 % | (386) | (2 %) | (81 %) | (82 %) | ||
INCOME BEFORE INCOME TAXES | 7,959 | 21 % | 6,017 | 16 % | 32 % | 29 % | ||
Provision for income taxes | 636 | 2 % | 833 | 2 % | (24 %) | (25 %) | ||
NET INCOME | $ 7,323 | 19 % | $ 5,184 | 14 % | 41 % | 38 % | ||
EARNINGS PER SHARE: | ||||||||
Basic | $ 2.67 | $ 1.93 | ||||||
Diluted | $ 2.60 | $ 1.88 | ||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||
Basic | 2,741 | 2,692 | ||||||
Diluted | 2,820 | 2,757 | ||||||
(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 | |||||||
ORACLE CORPORATION | ||||||||||||||||||||
Q3 FISCAL 2024 YEAR TO DATE FINANCIAL RESULTS | ||||||||||||||||||||
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1) | ||||||||||||||||||||
($ in millions, except per share data) | ||||||||||||||||||||
Nine Months Ended | % Increase | % Increase | ||||||||||||||||||
February 29, | February 29, | February 28, | February 28, | GAAP | Non-GAAP | GAAP | Non-GAAP | |||||||||||||
2024 | 2024 | 2023 | 2023 | |||||||||||||||||
GAAP | Adj. | Non-GAAP | GAAP | Adj. | Non-GAAP | |||||||||||||||
TOTAL REVENUES | $ 38,674 | $ - | $ 38,674 | $ 36,118 | $ - | $ 36,118 | 7 % | 7 % | 6 % | 6 % | ||||||||||
TOTAL OPERATING EXPENSES | $ 28,007 | $ (5,719) | $ 22,288 | $ 27,165 | $ (5,794) | $ 21,371 | 3 % | 4 % | 3 % | 4 % | ||||||||||
Stock-based compensation (3) | 2,927 | (2,927) | - | 2,583 | (2,583) | - | 13 % | * | 13 % | * | ||||||||||
Amortization of intangible assets (4) | 2,267 | (2,267) | - | 2,712 | (2,712) | - | (16 %) | * | (16 %) | * | ||||||||||
Acquisition related and other | 214 | (214) | - | 140 | (140) | - | 53 % | * | 52 % | * | ||||||||||
Restructuring | 311 | (311) | - | 359 | (359) | - | (13 %) | * | (14 %) | * | ||||||||||
OPERATING INCOME | $ 10,667 | $ 5,719 | $ 16,386 | $ 8,953 | $ 5,794 | $ 14,747 | 19 % | 11 % | 17 % | 10 % | ||||||||||
OPERATING MARGIN % | 28 % | 42 % | 25 % | 41 % | 279 bp. | 154 bp. | 260 bp. | 147 bp. | ||||||||||||
INCOME TAX EFFECTS (5) | $ 636 | $ 1,939 | $ 2,575 | $ 833 | $ 1,457 | $ 2,290 | (24 %) | 12 % | (25 %) | 11 % | ||||||||||
NET INCOME | $ 7,323 | $ 3,780 | $ 11,103 | $ 5,184 | $ 4,337 | $ 9,521 | 41 % | 17 % | 38 % | 15 % | ||||||||||
DILUTED EARNINGS PER SHARE | $ 2.60 | $ 3.94 | $ 1.88 | $ 3.45 | 38 % | 14 % | 35 % | 13 % | ||||||||||||
DILUTED WEIGHTED AVERAGE COMMON | 2,820 | - | 2,820 | 2,757 | - | 2,757 | 2 % | 2 % | 2 % | 2 % | ||||||||||
(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 | |||||||||||||||||||
(3) | Stock-based compensation was included in the following GAAP operating expense categories: | |||||||||||||||||||
Nine Months Ended | Nine Months Ended | |||||||||||||||||||
February 29, 2024 | February 28, 2023 | |||||||||||||||||||
GAAP | Adj. | Non-GAAP | GAAP | Adj. | Non-GAAP | |||||||||||||||
Cloud services and license support | $ 386 | $ (386) | $ - | $ 319 | $ (319) | $ - | ||||||||||||||
Hardware | 17 | (17) | - | 13 | (13) | - | ||||||||||||||
Services | 123 | (123) | - | 99 | (99) | - | ||||||||||||||
Sales and marketing | 488 | (488) | - | 433 | (433) | - | ||||||||||||||
Research and development | 1,642 | (1,642) | - | 1,448 | (1,448) | - | ||||||||||||||
General and administrative | 271 | (271) | - | 271 | (271) | - | ||||||||||||||
Total stock-based compensation | $ 2,927 | $ (2,927) | $ - | $ 2,583 | $ (2,583) | $ - | ||||||||||||||
(4) | Estimated future annual amortization expense related to intangible assets as of February 29, 2024 was as follows: | |||||||||||||||||||
Remainder of fiscal 2024 | $ 739 | |||||||||||||||||||
Fiscal 2025 | 2,303 | |||||||||||||||||||
Fiscal 2026 | 1,639 | |||||||||||||||||||
Fiscal 2027 | 672 | |||||||||||||||||||
Fiscal 2028 | 635 | |||||||||||||||||||
Fiscal 2029 | 561 | |||||||||||||||||||
Thereafter | 1,080 | |||||||||||||||||||
Total intangible assets, net | $ 7,629 | |||||||||||||||||||
(5) | Income tax effects were calculated reflecting an effective GAAP tax rate of | |||||||||||||||||||
* | Not meaningful | |||||||||||||||||||
ORACLE CORPORATION | ||||||
Q3 FISCAL 2024 FINANCIAL RESULTS | ||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
($ in millions) | ||||||
February 29, | May 31, | |||||
2024 | 2023 | |||||
ASSETS | ||||||
Current Assets: | ||||||
Cash and cash equivalents | $ 9,481 | $ 9,765 | ||||
Marketable securities | 423 | 422 | ||||
Trade receivables, net | 7,297 | 6,915 | ||||
Prepaid expenses and other current assets | 3,862 | 3,902 | ||||
Total Current Assets | 21,063 | 21,004 | ||||
Non-Current Assets: | ||||||
Property, plant and equipment, net | 19,117 | 17,069 | ||||
Intangible assets, net | 7,629 | 9,837 | ||||
Goodwill, net | 62,222 | 62,261 | ||||
Deferred tax assets | 12,688 | 12,226 | ||||
Other non-current assets | 14,363 | 11,987 | ||||
Total Non-Current Assets | 116,019 | 113,380 | ||||
TOTAL ASSETS | $ 137,082 | $ 134,384 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Current Liabilities: | ||||||
Notes payable and other borrowings, current | $ 5,510 | $ 4,061 | ||||
Accounts payable | 1,658 | 1,204 | ||||
Accrued compensation and related benefits | 1,796 | 2,053 | ||||
Deferred revenues | 8,931 | 8,970 | ||||
Other current liabilities | 6,990 | 6,802 | ||||
Total Current Liabilities | 24,885 | 23,090 | ||||
Non-Current Liabilities: | ||||||
Notes payable and other borrowings, non-current | 82,470 | 86,420 | ||||
Income taxes payable | 10,451 | 11,077 | ||||
Deferred tax liabilities | 4,483 | 5,772 | ||||
Other non-current liabilities | 8,611 | 6,469 | ||||
Total Non-Current Liabilities | 106,015 | 109,738 | ||||
Stockholders' Equity | 6,182 | 1,556 | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 137,082 | $ 134,384 | ||||
ORACLE CORPORATION | |||||
Q3 FISCAL 2024 FINANCIAL RESULTS | |||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
($ in millions) | |||||
Nine Months Ended | |||||
February 29, | February 28, | ||||
Cash Flows From Operating Activities: | |||||
Net income | $ 7,323 | $ 5,184 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Depreciation | 2,318 | 1,810 | |||
Amortization of intangible assets | 2,267 | 2,712 | |||
Deferred income taxes | (1,755) | (1,253) | |||
Stock-based compensation | 2,927 | 2,583 | |||
Other, net | 631 | 487 | |||
Changes in operating assets and liabilities, net of effects from acquisitions: | |||||
(Increase) decrease in trade receivables, net | (409) | 460 | |||
Decrease in prepaid expenses and other assets | 457 | 515 | |||
Decrease in accounts payable and other liabilities | (682) | (783) | |||
Decrease in income taxes payable | (788) | (453) | |||
Increase in deferred revenues | 303 | 256 | |||
Net cash provided by operating activities | 12,592 | 11,518 | |||
Cash Flows From Investing Activities: | |||||
Purchases of marketable securities and other investments | (674) | (921) | |||
Proceeds from sales and maturities of marketable securities and other investments | 207 | 552 | |||
Acquisitions, net of cash acquired | (59) | (27,721) | |||
Capital expenditures | (4,068) | (6,782) | |||
Net cash used for investing activities | (4,594) | (34,872) | |||
Cash Flows From Financing Activities: | |||||
Payments for repurchases of common stock | (1,050) | (1,150) | |||
Proceeds from issuances of common stock | 454 | 759 | |||
Shares repurchased for tax withholdings upon vesting of restricted stock-based awards | (1,865) | (1,040) | |||
Payments of dividends to stockholders | (3,289) | (2,586) | |||
Proceeds from issuances of commercial paper, net of repayments | 936 | 1,874 | |||
Proceeds from issuances of senior notes and other borrowings, net of issuance costs | - | 33,494 | |||
Repayments of senior notes and other borrowings | (3,500) | (21,050) | |||
Other, net | 34 | 49 | |||
Net cash (used for) provided by financing activities | (8,280) | 10,350 | |||
Effect of exchange rate changes on cash and cash equivalents | (2) | (160) | |||
Net decrease in cash and cash equivalents | (284) | (13,164) | |||
Cash and cash equivalents at beginning of period | 9,765 | 21,383 | |||
Cash and cash equivalents at end of period | $ 9,481 | $ 8,219 | |||
ORACLE CORPORATION | ||||||||||
Q3 FISCAL 2024 FINANCIAL RESULTS | ||||||||||
FREE CASH FLOW - TRAILING 4-QUARTERS (1) | ||||||||||
($ in millions) | ||||||||||
Fiscal 2023 | Fiscal 2024 | |||||||||
Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | |||
GAAP Operating Cash Flow | $ 10,542 | $ 15,073 | $ 15,503 | $ 17,165 | $ 17,745 | $ 17,039 | $ 18,239 | |||
Capital Expenditures | (5,168) | (6,678) | (8,205) | (8,695) | (8,290) | (6,935) | (5,981) | |||
Free Cash Flow | $ 5,374 | $ 8,395 | $ 7,298 | $ 8,470 | $ 9,455 | $ 10,104 | $ 12,258 | |||
Operating Cash Flow % Growth over prior year | (31 %) | 47 % | 49 % | 80 % | 68 % | 13 % | 18 % | |||
Free Cash Flow % Growth over prior year | (57 %) | 18 % | 11 % | 68 % | 76 % | 20 % | 68 % | |||
GAAP Net Income | $ 5,808 | $ 8,797 | $ 8,373 | $ 8,503 | $ 9,375 | $ 10,137 | $ 10,642 | |||
Operating Cash Flow as a % of Net Income | 182 % | 171 % | 185 % | 202 % | 189 % | 168 % | 171 % | |||
Free Cash Flow as a % of Net Income | 93 % | 95 % | 87 % | 100 % | 101 % | 100 % | 115 % | |||
(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 | ||||||||||
ORACLE CORPORATION | ||||||||||||||
Q3 FISCAL 2024 FINANCIAL RESULTS | ||||||||||||||
SUPPLEMENTAL ANALYSIS OF GAAP REVENUES (1) | ||||||||||||||
($ in millions) | ||||||||||||||
Fiscal 2023 | Fiscal 2024 | |||||||||||||
Q1 | Q2 | Q3 | Q4 | TOTAL | Q1 | Q2 | Q3 | Q4 | TOTAL | |||||
REVENUES BY OFFERINGS | ||||||||||||||
Cloud services | $ 3,579 | $ 3,813 | $ 4,053 | $ 4,437 | $ 15,881 | $ 4,635 | $ 4,775 | $ 5,054 | $ 14,464 | |||||
License support | 4,838 | 4,785 | 4,870 | 4,933 | 19,426 | 4,912 | 4,864 | 4,909 | 14,685 | |||||
Cloud services and license support | 8,417 | 8,598 | 8,923 | 9,370 | 35,307 | 9,547 | 9,639 | 9,963 | 29,149 | |||||
Cloud license and on-premise license | 904 | 1,435 | 1,288 | 2,152 | 5,779 | 809 | 1,178 | 1,256 | 3,243 | |||||
Hardware | 763 | 850 | 811 | 850 | 3,274 | 714 | 756 | 754 | 2,224 | |||||
Services | 1,361 | 1,392 | 1,376 | 1,465 | 5,594 | 1,383 | 1,368 | 1,307 | 4,058 | |||||
Total revenues | $ 11,445 | $ 12,275 | $ 12,398 | $ 13,837 | $ 49,954 | $ 12,453 | $ 12,941 | $ 13,280 | $ 38,674 | |||||
AS REPORTED REVENUE GROWTH RATES | ||||||||||||||
Cloud services | 45 % | 43 % | 45 % | 54 % | 47 % | 30 % | 25 % | 25 % | 26 % | |||||
License support | (1 %) | (2 %) | 0 % | 4 % | 0 % | 2 % | 2 % | 1 % | 1 % | |||||
Cloud services and license support | 14 % | 14 % | 17 % | 23 % | 17 % | 13 % | 12 % | 12 % | 12 % | |||||
Cloud license and on-premise license | 11 % | 16 % | 0 % | (15 %) | (2 %) | (10 %) | (18 %) | (3 %) | (11 %) | |||||
Hardware | 0 % | 11 % | 2 % | (1 %) | 3 % | (6 %) | (11 %) | (7 %) | (8 %) | |||||
Services | 74 % | 74 % | 74 % | 76 % | 75 % | 2 % | (2 %) | (5 %) | (2 %) | |||||
Total revenues | 18 % | 18 % | 18 % | 17 % | 18 % | 9 % | 5 % | 7 % | 7 % | |||||
CONSTANT CURRENCY REVENUE GROWTH RATES (2) | ||||||||||||||
Cloud services | 50 % | 48 % | 48 % | 55 % | 50 % | 29 % | 24 % | 24 % | 25 % | |||||
License support | 4 % | 4 % | 3 % | 6 % | 4 % | 0 % | 0 % | 1 % | 0 % | |||||
Cloud services and license support | 20 % | 20 % | 20 % | 25 % | 21 % | 12 % | 11 % | 11 % | 11 % | |||||
Cloud license and on-premise license | 19 % | 23 % | 4 % | (14 %) | 2 % | (11 %) | (19 %) | (3 %) | (11 %) | |||||
Hardware | 5 % | 16 % | 4 % | 1 % | 6 % | (8 %) | (12 %) | (7 %) | (9 %) | |||||
Services | 84 % | 83 % | 80 % | 78 % | 81 % | 1 % | (3 %) | (5 %) | (2 %) | |||||
Total revenues | 23 % | 25 % | 21 % | 18 % | 22 % | 8 % | 4 % | 7 % | 6 % | |||||
CLOUD SERVICES AND LICENSE SUPPORT REVENUES | ||||||||||||||
BY ECOSYSTEM | ||||||||||||||
Applications cloud services and license support | $ 4,016 | $ 4,080 | $ 4,166 | $ 4,390 | $ 16,651 | $ 4,471 | $ 4,474 | $ 4,584 | $ 13,529 | |||||
Infrastructure cloud services and license support | 4,401 | 4,518 | 4,757 | 4,980 | 18,656 | 5,076 | 5,165 | 5,379 | 15,620 | |||||
Total cloud services and license support revenues | $ 8,417 | $ 8,598 | $ 8,923 | $ 9,370 | $ 35,307 | $ 9,547 | $ 9,639 | $ 9,963 | $ 29,149 | |||||
AS REPORTED REVENUE GROWTH RATES | ||||||||||||||
Applications cloud services and license support | 32 % | 30 % | 31 % | 36 % | 32 % | 11 % | 10 % | 10 % | 10 % | |||||
Infrastructure cloud services and license support | 2 % | 3 % | 7 % | 14 % | 6 % | 15 % | 14 % | 13 % | 14 % | |||||
Total cloud services and license support revenues | 14 % | 14 % | 17 % | 23 % | 17 % | 13 % | 12 % | 12 % | 12 % | |||||
CONSTANT CURRENCY REVENUE GROWTH RATES (2) | ||||||||||||||
Applications cloud services and license support | 37 % | 35 % | 33 % | 37 % | 35 % | 11 % | 9 % | 10 % | 10 % | |||||
Infrastructure cloud services and license support | 7 % | 9 % | 10 % | 15 % | 10 % | 14 % | 12 % | 13 % | 13 % | |||||
Total cloud services and license support revenues | 20 % | 20 % | 20 % | 25 % | 21 % | 12 % | 11 % | 11 % | 11 % | |||||
GEOGRAPHIC REVENUES | ||||||||||||||
Americas | $ 7,192 | $ 7,786 | $ 7,671 | $ 8,577 | $ 31,226 | $ 7,841 | $ 8,067 | $ 8,270 | $ 24,177 | |||||
Europe/ | 2,691 | 2,895 | 3,067 | 3,457 | 12,109 | 3,005 | 3,170 | 3,316 | 9,491 | |||||
Asia Pacific | 1,562 | 1,594 | 1,660 | 1,803 | 6,619 | 1,607 | 1,704 | 1,694 | 5,006 | |||||
Total revenues | $ 11,445 | $ 12,275 | $ 12,398 | $ 13,837 | $ 49,954 | $ 12,453 | $ 12,941 | $ 13,280 | $ 38,674 | |||||
(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 | ||||||||||||||
APPENDIX A
ORACLE CORPORATION
Q3 FISCAL 2024 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:
- Stock-based compensation expenses: We have excluded the effect of stock-based compensation expenses from our non-GAAP operating expenses, income tax effects 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, income tax effects 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, income tax effects 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 consisted of personnel related costs for transitional and certain other employees, certain business combination adjustments including certain adjustments after the measurement period has ended, and certain other operating items, net. Restructuring expenses consisted 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 may diminish over time with respect to past acquisitions and/or strategic initiatives, we generally will incur certain of these expenses in connection with any future acquisitions and/or strategic initiatives.
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SOURCE Oracle Corporation