10-QPeriod: Q3 FY2015

ORACLE CORP Quarterly Report for Q3 Ended Feb 28, 2015

Filed March 19, 2015For Securities:ORCLORCL-PD

Summary

Oracle Corporation (ORCL) reported its third quarter and nine-month results for the period ending February 28, 2015. Total revenues for the quarter were flat year-over-year at $9.3 billion, with a slight increase to $27.5 billion for the nine months. The company experienced strong growth in its Software and Cloud business, which now represents 77% of total revenues, driven by increases in software license updates and product support, as well as cloud software subscriptions (SaaS/PaaS). Despite flat overall revenue, the company saw a 6% increase in constant currency revenues, indicating resilience against foreign currency headwinds. Acquisitions, notably MICROS Systems, significantly impacted the results, contributing to growth in hardware and services segments. While new software license revenue saw a slight decline, the company's high-margin software license updates and product support business continued to perform well. Oracle also announced an increase in its quarterly cash dividend and continued its share repurchase program, returning capital to shareholders. The company's financial position remains strong, with robust operating cash flow and substantial cash, cash equivalents, and marketable securities.

Financial Highlights

55 data points
Beta

Revenue

$9.33B

Net Income

$2.50B

26.8% Net Margin

EPS (Diluted)

$0.56

Total Assets

$98.82B

Cash & Equivalents

$13.70B

Free Cash Flow

$1.90B

Financial Statements
Beta
Revenue$9.33B
R&D Expenses$1.37B
Operating Expenses$5.94B
Operating Income$3.38B
Interest Expense$273.00M
Net Income$2.50B
EPS (Basic)$0.57
EPS (Diluted)$0.56
Shares Outstanding (Basic)4.39B
Shares Outstanding (Diluted)4.49B

Key Highlights

  • 1Total revenues were $9.33 billion for the third quarter and $27.52 billion for the first nine months of fiscal year 2015, largely flat year-over-year.
  • 2Software and Cloud business revenues grew 1% year-over-year to $7.17 billion for the quarter, representing 77% of total revenues.
  • 3Software license updates and product support revenue, a high-margin segment, increased 2% to $4.66 billion for the quarter.
  • 4Acquisitions, particularly MICROS Systems, contributed to growth in the Hardware Systems and Services businesses.
  • 5Operating income was $3.38 billion for the quarter, a 5% decrease year-over-year, impacted by currency fluctuations and increased operating expenses.
  • 6The company returned $6.1 billion to shareholders through stock repurchases and paid dividends during the nine months ended February 28, 2015.
  • 7Oracle maintained a strong liquidity position with $43.8 billion in cash, cash equivalents, and marketable securities as of February 28, 2015.

Frequently Asked Questions

Oracle's total revenues were flat year-over-year at $9.3 billion for the third quarter ending February 28, 2015. However, when excluding the impact of unfavorable currency fluctuations, revenues increased by 6% on a constant currency basis, primarily driven by the Software and Cloud business.

Recent acquisitions, notably MICROS Systems, Inc., have had a significant impact on Oracle's financial results. They contributed to growth in the Hardware Systems and Services businesses and are reflected in the company's revenue and expense lines. The company continues to view an active acquisition program as a key element of its corporate strategy.

Oracle is returning capital to shareholders through a combination of share repurchases and dividend payments. During the nine months ended February 28, 2015, the company repurchased approximately $6.1 billion of its common stock and paid dividends. The company also announced an increase in its quarterly cash dividend to $0.15 per share in March 2015.

Oracle expects its Software and Cloud business to continue growing, driven by demand for software products and cloud subscriptions, along with strong renewal rates for software license updates and product support. The company is also investing in research and development and expanding its cloud offerings.