10-QPeriod: Q3 FY2013

ORACLE CORP Quarterly Report for Q3 Ended Feb 28, 2013

Filed March 22, 2013For Securities:ORCLORCL-PD

Summary

Oracle Corporation's (ORCL) Form 10-Q for the period ending February 28, 2013, shows a stable revenue picture compared to the prior year, with total revenues at $8.96 billion for the quarter and $26.23 billion for the nine months. While new software license and cloud subscription revenues saw a slight dip in the quarter, overall software business revenue grew due to strong performance in license updates and product support. The company continues to execute its strategy of strategic acquisitions, notably the pending acquisition of Acme Packet for approximately $2.1 billion and the recent acquisition of Eloqua for $935 million. Oracle is actively returning capital to shareholders through share repurchases, with $8.2 billion spent in the nine-month period. Financially, Oracle maintains a strong liquidity position with $16.1 billion in cash and cash equivalents and $17.3 billion in marketable securities as of February 28, 2013. The company also generated robust operating cash flow of $9.66 billion for the nine months. Management anticipates continued investment in research and development and a strategic focus on integrating acquired technologies to drive future growth and maintain its competitive edge in the enterprise software and hardware markets.

Financial Statements
Beta
Revenue$8.96B
R&D Expenses$1.19B
Operating Expenses$5.62B
Operating Income$3.33B
Interest Expense$205.00M
Net Income$2.50B
EPS (Basic)$0.53
EPS (Diluted)$0.52
Shares Outstanding (Basic)4.74B
Shares Outstanding (Diluted)4.81B

Key Highlights

  • 1Total revenues for the nine months ended February 28, 2013, were $26.23 billion, flat compared to the prior year's $26.21 billion. The third quarter revenues were $8.96 billion, a slight decrease from $9.04 billion in the prior year.
  • 2The software business remains the core revenue driver, with revenues of $19.04 billion for the nine months, up 5.8% year-over-year. Software license updates and product support showed strong growth, increasing by 5.7% to $12.74 billion for the nine months.
  • 3Cloud software subscriptions revenue more than doubled year-over-year for the nine-month period, reaching $653 million, indicating a successful shift towards cloud offerings.
  • 4Oracle announced a proposed acquisition of Acme Packet, a session border control technology provider, for an estimated $2.1 billion. The company also recently acquired Eloqua, a cloud-based marketing automation software provider, for approximately $935 million.
  • 5The company repurchased approximately $8.2 billion of its common stock during the nine months ended February 28, 2013, demonstrating a commitment to returning capital to shareholders.
  • 6Operating income for the nine months was $9.68 billion, an increase of 6.3% year-over-year, indicating improved operational efficiency and profitability.
  • 7Cash and cash equivalents and marketable securities totaled $33.41 billion as of February 28, 2013, providing significant financial flexibility.

Frequently Asked Questions

For the nine months ended February 28, 2013, Oracle reported total revenues of $26.23 billion, which was approximately flat compared to $26.21 billion in the same period last year. The third quarter revenues were $8.96 billion, a slight decrease from $9.04 billion in the prior year's quarter. The software business continued to be the primary revenue driver, with a notable increase in software license updates and product support, and strong growth in cloud software subscriptions.

Oracle continues to pursue a strategy of growth through acquisitions. During this period, the company announced a proposed acquisition of Acme Packet for approximately $2.1 billion and recently completed the acquisition of Eloqua for about $935 million. These acquisitions are aimed at strengthening Oracle's product portfolio, particularly in cloud-based solutions and emerging technologies.

Oracle maintains a strong liquidity position with over $33.4 billion in cash, cash equivalents, and marketable securities as of February 28, 2013. The company actively returned capital to shareholders through significant share repurchases, spending $8.2 billion on stock buybacks in the nine-month period. Additionally, Oracle declared an accelerated cash dividend of $0.18 per share in December 2012.

Oracle's cloud software subscriptions revenue showed significant growth, more than doubling year-over-year to $653 million for the nine months ended February 28, 2013. This strong performance indicates positive customer adoption and successful integration of cloud-based solutions.