10-KPeriod: FY2015

ORACLE CORP Annual Report, Year Ended May 31, 2015

Filed June 25, 2015For Securities:ORCLORCL-PD

Summary

Oracle Corporation's (ORCL) fiscal year 2015 filing demonstrates continued revenue generation primarily from its Software and Cloud business, which represented 77% of total revenues. Despite a slight year-over-year dip in total revenues (0% actual, 4% constant currency), the company highlighted growth in its Software License Updates and Product Support, along with SaaS and PaaS offerings, driven by strong renewal rates and contributions from recent acquisitions like MICROS Systems, Inc. The company also managed its capital effectively, with significant cash reserves and ongoing stock repurchase programs and dividend payments. While the Hardware Systems business saw a slight decline in constant currency revenue, the Services business revenue remained flat in constant currency. Oracle's strategic focus on cloud offerings and continued investment in research and development are key themes. The company's financial position remains robust, supported by strong cash flow from operations and a substantial amount of cash, cash equivalents, and marketable securities. However, investors should note the significant debt obligations, which increased substantially in fiscal 2015 due to new senior note issuances, and the impact of foreign currency fluctuations on reported results.

Financial Highlights

57 data points
Beta

Revenue

$38.23B

62.0% Gross Margin

Net Income

$9.94B

26.0% Net Margin

EPS (Diluted)

$2.21

Total Assets

$110.90B

Cash & Equivalents

$21.72B

Free Cash Flow

$13.19B

Financial Statements
Beta
Revenue$38.23B
Gross Profit$23.71B
R&D Expenses$5.52B
Operating Expenses$24.36B
Operating Income$13.87B
Interest Expense$1.14B
Net Income$9.94B
EPS (Basic)$2.26
EPS (Diluted)$2.21
Shares Outstanding (Basic)4.40B
Shares Outstanding (Diluted)4.50B

Key Highlights

  • 1Total revenues were flat year-over-year at $38.226 billion, impacted by a 4% unfavorable currency movement.
  • 2Software and Cloud business remained the dominant revenue driver, accounting for 77% of total revenues, with strong performance in Software License Updates and Product Support, and growth in SaaS/PaaS offerings.
  • 3The company completed significant acquisitions, notably MICROS Systems, Inc. in fiscal 2015 and Responsys, Inc. in fiscal 2014, integrating them to enhance its product and service portfolio.
  • 4Net income decreased slightly to $9.938 billion ($2.21 per diluted share) from $10.955 billion ($2.38 per diluted share) in the prior year.
  • 5Oracle maintained a strong liquidity position with $54.4 billion in cash, cash equivalents, and marketable securities as of May 31, 2015.
  • 6The company returned significant capital to shareholders through stock repurchases ($8.1 billion in fiscal 2015) and dividends ($2.3 billion in fiscal 2015).
  • 7Total debt increased significantly to $42.0 billion, primarily due to the issuance of $20.0 billion in senior notes during fiscal 2015.

Frequently Asked Questions

Oracle reported total revenues of $38.226 billion for fiscal year 2015. This represented a 0% change on an actual currency basis and a 4% increase on a constant currency basis compared to fiscal year 2014, indicating that unfavorable currency movements had a noticeable impact.

Oracle completed several significant acquisitions, including MICROS Systems, Inc. in fiscal 2015 and Responsys, Inc. in fiscal 2014. These acquisitions contributed to revenue growth, particularly in the Software and Cloud business, and expanded the company's offerings in key areas like hospitality and retail technology. However, the acquisitions also contributed to an increase in intangible assets and goodwill on the balance sheet.

Oracle maintained a very strong liquidity position, with $54.4 billion in cash, cash equivalents, and marketable securities as of May 31, 2015. The company actively managed its capital through substantial stock repurchases totaling $8.1 billion in fiscal 2015 and dividend payments of $2.3 billion. However, the company also significantly increased its debt by issuing $20.0 billion in senior notes during fiscal 2015, bringing total borrowings to $42.0 billion.

The Software and Cloud business remained Oracle's largest and most profitable segment, accounting for 77% of total revenues. Within this segment, Software License Updates and Product Support showed strong revenue growth (4% actual, 8% constant currency), as did Cloud SaaS and PaaS offerings (32% actual, 35% constant currency). The Hardware Systems business saw a slight revenue decline, while the Services business revenue was flat in constant currency.