10-KPeriod: FY2014

ORACLE CORP Annual Report, Year Ended May 31, 2014

Filed June 26, 2014For Securities:ORCLORCL-PD

Summary

Oracle Corporation's fiscal year 2014 filing (ending May 31, 2014) demonstrates continued revenue growth, primarily driven by its software and cloud segment, which represented 76% of total revenues. The company highlighted significant investments in research and development, totaling $5.2 billion, to enhance its existing product portfolio and develop new offerings, particularly in cloud computing. Oracle's strategy emphasizes acquiring companies and technologies to expand its market reach and product capabilities, with ongoing efforts to integrate acquired businesses. The hardware systems segment showed flat revenue growth, while the services segment experienced a slight decline. The company's financial position remains strong, supported by substantial cash reserves and a robust operating margin. Oracle continued its share repurchase program and dividend payments, signaling confidence in its financial health and commitment to returning value to shareholders. However, the report also notes significant ongoing amortization expenses related to past acquisitions and potential risks associated with global economic conditions, competition, and the evolving cloud computing landscape.

Financial Highlights

54 data points
Beta

Revenue

$38.27B

Net Income

$10.96B

28.6% Net Margin

EPS (Diluted)

$2.38

Total Assets

$90.27B

Cash & Equivalents

$17.77B

Free Cash Flow

$14.34B

Financial Statements
Beta
Revenue$38.27B
R&D Expenses$5.15B
Operating Expenses$23.52B
Operating Income$14.76B
Interest Expense$914.00M
Net Income$10.96B
EPS (Basic)$2.42
EPS (Diluted)$2.38
Shares Outstanding (Basic)4.53B
Shares Outstanding (Diluted)4.60B

Key Highlights

  • 1Total revenues increased by 3% to $38.28 billion in fiscal year 2014.
  • 2Software and Cloud business remains the dominant revenue driver, accounting for 76% of total revenues, showing a 5% increase.
  • 3Investments in research and development were $5.2 billion, representing 13% of total revenues, focused on enhancing software and cloud offerings.
  • 4The company continued its share repurchase program, with approximately $4.3 billion remaining available as of May 31, 2014.
  • 5Oracle declared and paid cash dividends totaling $0.48 per share in fiscal year 2014.
  • 6The hardware systems business revenues remained flat at $5.37 billion, while the services segment saw a 5% decrease in revenues.
  • 7Significant amortization of intangible assets, totaling $2.3 billion, continued to impact operating expenses due to past acquisitions.

Frequently Asked Questions

Oracle's primary growth driver in fiscal year 2014 was its Software and Cloud business segment, which accounted for 76% of total revenues and saw a 5% increase, largely due to growth in software license updates and product support, as well as contributions from cloud SaaS and PaaS offerings from recent acquisitions.

Oracle continued to emphasize its cloud strategy, expanding its Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), and Infrastructure-as-a-Service (IaaS) offerings. The filing notes increased investments in these areas and mentions the establishment of a dedicated cloud IaaS segment. Acquisitions also played a role in broadening the company's cloud capabilities.

Acquisitions are a significant part of Oracle's strategy, contributing to revenue growth, particularly in the software and cloud segment. However, they also result in substantial amortization of intangible assets, which impacts operating expenses. The filing also details acquisition-related expenses and the accounting treatment for acquired assets and liabilities.

Oracle is returning value to shareholders through its ongoing stock repurchase program and by paying cash dividends. In fiscal year 2014, the company repurchased $9.8 billion of its common stock and paid $2.2 billion in cash dividends ($0.48 per share).