ORACLE CORP Quarterly Report for Q1 Ended Aug 31, 2008

Summary

Oracle Corporation's (ORCL) 10-Q filing for the period ending August 31, 2008, demonstrates robust financial performance driven by strong revenue growth across its software and services segments. Total revenues saw a significant increase of 18% year-over-year, reaching $5.33 billion, with software revenues up 20% and services revenues up 9%. This growth was supported by a combination of organic demand for its core database and middleware products, a strong performance in software license updates and product support, and the impact of strategic acquisitions, most notably BEA Systems, Inc. The company's profitability also improved, with operating income rising by 25% to $1.52 billion. This was achieved despite increased operating expenses, which were up 15%, largely due to higher personnel costs, increased amortization of intangible assets from recent acquisitions, and integration-related expenses. Oracle maintained a healthy operating margin of 29%, reflecting its efficient cost structure and the high-margin nature of its software support business. The company also reported a significant increase in cash from operations, highlighting its strong cash-generating capabilities.

Key Highlights

• 1Total revenues increased 18% year-over-year to $5.33 billion.
• 2Software revenues grew 20% to $4.17 billion, driven by new software licenses and product support.
• 3Services revenues increased 9% to $1.16 billion.
• 4Operating income rose 25% to $1.52 billion, with operating margin improving to 29%.
• 5Net income increased to $1.08 billion, resulting in diluted EPS of $0.21, up from $0.16 in the prior year.
• 6Cash provided by operating activities increased 20% to $3.24 billion.
• 7The company continued its share repurchase program, repurchasing approximately 22.7 million shares for $500 million during the quarter.

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