01—Abstract
Summary
Summary of the 10-K filed June 22, 2018. Cited figures are marked; the original filing is the authoritative source.
Oracle Corporation's fiscal year 2018 10-K filing indicates a period of continued growth, with total revenues reaching $39.8 billiona, a 6% increase year-over-year, driven primarily by its cloud and license business which now represents 82% of total revenue.
The company continues its strategic emphasis on cloud services, evident in the ongoing investments in research and development and a history of strategic acquisitions. The company's financial performance was impacted by the U.S. Tax Cuts and Jobs Act of 2017, which resulted in a significant one-time tax expense impacting net income. Oracle also continued its robust share repurchase program and dividend payments, signaling a commitment to returning capital to shareholders.
02—Key points
Key Highlights
- Total revenues increased by 6% to $39.8 billion in FY2018, primarily driven by growth in the Cloud and License business.
- The Cloud and License business represented 82% of total revenues, showcasing a continued shift towards cloud offerings.
- The company made significant investments in research and development, totaling $6.1 billion, underscoring its commitment to innovation.
- Oracle's hardware business saw a revenue decline of 4% in FY2018, reflecting a strategic pivot towards its more profitable cloud offerings.
- Net income was significantly impacted by a one-time tax expense of $7.8 billion related to the U.S. Tax Cuts and Jobs Act of 2017, leading to a reported net income of $3.8 billion.
- The company returned substantial capital to shareholders through share repurchases ($11.5 billion) and dividends ($3.1 billion) in FY2018.
- Oracle continued its active acquisition strategy, notably acquiring Aconex Limited for approximately $1.2 billion in FY2018.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2018, Oracle Corp kept $0.09.
- Revenue$39.38B100.0%
- Cost of revenue−$15.10B38.3%
- Gross profit$24.29B61.7%
- Operating costs−$11.02B28.0%
- Operating income$13.26B33.7%
- Interest, other & tax−$9.68B24.6%
- Net income$3.59B9.1%
Where FY2018 revenue went
$39.38B- Cost of revenue: $15.10B, 38% of revenue
- Interest, other & tax: $9.68B, 25% of revenue
- R&D: $6.08B, 15% of revenue
- Other operating costs: $4.94B, 13% of revenue
- Net income: $3.59B, 9.1% of revenue
Kept 9.1% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2018filed June 22, 2018Financial Statements
FY2018 against FY2017
| Line item | FY2018FY2017 | Change |
|---|---|---|
| Revenue | $39.38B$37.79B | +4.2% |
| Gross Profit | $24.29B$23.02B | +5.5% |
| R&D Expenses | $6.08B$6.15B | −1.1% |
| Operating Expenses | $26.12B$24.88B | +5.0% |
| Operating Income | $13.26B$12.91B | +2.7% |
| Interest Expense | $2.02B$1.80B | +12.6% |
| Net Income | $3.59B$9.45B | −62.1% |
| EPS (Basic) | $0.87$2.30 | −62.2% |
| EPS (Diluted) | $0.85$2.24 | −62.1% |
| Shares Outstanding (Basic) | 4.12B4.12B | +0.1% |
| Shares Outstanding (Diluted) | 4.24B4.22B | +0.5% |
05—Questions
Frequently Asked Questions
What was Oracle's revenue performance in fiscal year 2018?
Oracle reported total revenues of $39.8 billion for fiscal year 2018, an increase of 6% compared to the previous year. This growth was largely driven by its Cloud and License business, which now accounts for 82% of total revenues.
How did the U.S. Tax Cuts and Jobs Act of 2017 affect Oracle's financial results?
The Tax Cuts and Jobs Act of 2017 resulted in a one-time transition tax expense of $7.8 billion in fiscal year 2018, significantly impacting net income. While this created a high effective tax rate for the year, the company anticipates long-term benefits from the reduced corporate tax rate and greater flexibility in accessing foreign cash.
What is Oracle's strategy regarding its Cloud offerings?
Oracle continues to place a significant strategic emphasis on growing its cloud offerings across SaaS, PaaS, and IaaS. The company is investing heavily in research and development for its cloud services and has made strategic acquisitions to enhance its cloud portfolio, reflecting a clear commitment to this segment of its business.
How did Oracle return capital to shareholders in FY2018?
In fiscal year 2018, Oracle returned substantial capital to shareholders through its stock repurchase program, repurchasing $11.5 billion of its common stock, and by paying cash dividends totaling $3.1 billion.
06—Continue