10-QPeriod: Q3 FY2009

ORACLE CORP Quarterly Report for Q3 Ended Feb 28, 2009

Filed March 23, 2009For Securities:ORCLORCL-PD

Summary

Oracle Corporation reported its fiscal third quarter and nine-month results for the period ending February 28, 2009. Despite a challenging economic environment, the company demonstrated resilience with revenue growth driven by its software license updates and product support segment, which represents its highest margin business. Total revenues saw an increase, bolstered by ongoing demand for its core software offerings and the contributions from recent acquisitions, particularly BEA Systems. The company also continued its strategy of returning capital to shareholders through significant stock repurchases. While the company navigates the economic downturn, it maintained a strong operating margin and generated substantial cash flow from operations. Oracle also remains focused on innovation and strategic acquisitions to expand its product portfolio and market reach. The company's financial position appears solid, with ample liquidity to fund operations, future investments, and shareholder returns.

Financial Highlights

30 data points
Beta

Revenue

$5.45B

100.0% Gross Margin

Net Income

$1.33B

24.4% Net Margin

EPS (Diluted)

$0.26

Cash & Equivalents

$8.21B

Free Cash Flow

$2.26B

Financial Statements
Beta
Revenue$5.45B
Cost of Revenue$0
Gross Profit$5.45B
Operating Expenses$3.51B
Operating Income$1.94B
Interest Expense-$154.00M
Net Income$1.33B
EPS (Basic)$0.27
EPS (Diluted)$0.26
Shares Outstanding (Basic)5.00B
Shares Outstanding (Diluted)5.06B

Key Highlights

  • 1Total revenues increased by 2% (11% in constant currency) to $5.45 billion for the third quarter and by 8% (12% in constant currency) to $16.39 billion for the first nine months.
  • 2Software license updates and product support revenue, the highest margin business, grew significantly, contributing to overall profitability.
  • 3Operating income increased by 4% (17% in constant currency) to $1.94 billion for the third quarter and by 12% (18% in constant currency) to $5.44 billion for the nine months.
  • 4Net income for the third quarter was $1.33 billion, a slight decrease from $1.34 billion in the prior year period.
  • 5Cash provided by operating activities increased by 22% to $6.25 billion for the nine months ended February 28, 2009.
  • 6The company repurchased approximately $3.7 billion of its common stock during the nine months ended February 28, 2009.
  • 7Oracle ended the period with $8.21 billion in cash and cash equivalents, and $3.08 billion in marketable securities.

Frequently Asked Questions

For the third quarter ended February 28, 2009, Oracle's total revenues increased by 2% to $5.45 billion on an actual basis, and by 11% on a constant currency basis. For the nine months ended February 28, 2009, total revenues increased by 8% to $16.39 billion on an actual basis, and by 12% on a constant currency basis.

Oracle's operating income increased by 4% to $1.94 billion in the third quarter and by 12% to $5.44 billion in the nine-month period. The company's highest margin business, software license updates and product support, showed strong growth. Acquisitions, particularly BEA Systems, contributed to revenue growth but also increased operating expenses, notably amortization of intangible assets. Despite these impacts, the company managed to grow its operating margin on both reported and constant currency bases.

Oracle generated strong operating cash flows, with a 22% increase to $6.25 billion for the nine months ended February 28, 2009. The company continued its aggressive stock repurchase program, buying back approximately $3.7 billion of its common stock during the same period. Oracle ended the quarter with a healthy cash position of over $11.2 billion in cash, cash equivalents, and marketable securities.

The company acknowledged that the global economic crisis was impacting its business, particularly through currency fluctuations which reduced reported revenue growth. While demand for core software remained strong, the company noted potential for customers to delay or reduce purchases. The company highlighted that new software license revenue in the Americas decreased on a constant currency basis, which it attributed partly to weaker global economic conditions.