10-QPeriod: Q3 FY2022

ORACLE CORP Quarterly Report for Q3 Ended Feb 28, 2022

Filed March 11, 2022For Securities:ORCLORCL-PD

Summary

Oracle Corporation's (ORCL) Q3 FY2022 results, filed on March 10, 2022, indicate a period of revenue growth driven primarily by its cloud services and license support segment, which continues to be the main revenue contributor. Despite an increase in total revenues to $10.51 billion for the quarter, the company's net income saw a significant decrease to $2.32 billion from $5.02 billion in the prior year period. This decline is largely attributable to a substantial $4.7 billion charge related to litigation, as detailed in the acquisition-related and other expenses. Financially, the company demonstrated strong cash flow from operations, although it declined year-over-year. Significant financing activities included substantial stock repurchases and debt repayments. Oracle also announced a significant pending acquisition of Cerner Corporation for approximately $28.5 billion, which is expected to close in calendar year 2022. The company has also secured new credit facilities, including a $6.0 billion revolving credit agreement and a $15.7 billion delayed draw term loan, to support its operations and the Cerner acquisition.

Financial Highlights

54 data points
Beta

Revenue

$10.51B

Net Income

$2.32B

22.1% Net Margin

EPS (Diluted)

$0.84

Total Assets

$108.64B

Cash & Equivalents

$22.68B

Free Cash Flow

$2.74B

Financial Statements
Beta
Revenue$10.51B
R&D Expenses$1.82B
Operating Expenses$6.69B
Operating Income$3.82B
Interest Expense$667.00M
Net Income$2.32B
EPS (Basic)$0.87
EPS (Diluted)$0.84
Shares Outstanding (Basic)2.67B
Shares Outstanding (Diluted)2.75B

Key Highlights

  • 1Total revenues increased by 4% to $10.51 billion for the third quarter, driven by a 5% increase in Cloud and License revenues.
  • 2Net income for the quarter significantly decreased to $2.32 billion from $5.02 billion in the prior year, largely due to a $4.7 billion litigation charge.
  • 3Cloud services and license support revenue, Oracle's largest segment, grew 5% year-over-year to $7.64 billion.
  • 4The company announced a definitive agreement to acquire Cerner Corporation for approximately $28.5 billion.
  • 5Cash provided by operating activities was $5.55 billion for the nine months ended February 28, 2022, a decrease from $11.05 billion in the prior year.
  • 6Oracle repurchased $15.6 billion of its common stock during the nine months ended February 28, 2022.
  • 7The company secured new credit agreements totaling $21.7 billion in March 2022 to support general corporate purposes and the Cerner acquisition.

Frequently Asked Questions

Revenue growth was primarily driven by the Cloud and License segment, specifically Cloud services and license support revenues, which increased by 5% year-over-year.

The substantial decrease in net income was primarily due to a significant litigation-related charge of $4.7 billion recorded in 'Acquisition related and other expenses' during the nine months ended February 28, 2022. This charge impacted the overall profitability for the period.

Oracle entered into an Agreement and Plan of Merger with Cerner Corporation on December 20, 2021, for a preliminary estimated purchase price of approximately $28.5 billion. A tender offer commenced in January 2022, and the transaction is expected to close during calendar year 2022, subject to regulatory approvals and other customary closing conditions.

Oracle generated $5.55 billion in cash from operations for the nine months, although this was down from the prior year. Significant financing activities included $15.6 billion in stock repurchases and $5.8 billion in debt repayments. The company also secured new revolving and delayed draw credit facilities totaling $21.7 billion in March 2022.