ORCL Oracle Corp

ORACLE  CORPORATION

Q2 FISCAL 2025 FINANCIAL RESULTS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in millions, except per share data)

Three Months Ended November 30,

% Increase

% Increase

(Decrease)

% of

% of

(Decrease)

in Constant

Revenues

2023

Revenues

in US $

Currency (1)

REVENUES

Cloud services and license support

$         10,806

77 %

$           9,639

74 %

12 %

12 %

Cloud license and on-premise license

1,195

9 %

1,178

9 %

1 %

3 %

Hardware

728

5 %

756

6 %

(4 %)

(3 %)

Services

1,330

9 %

1,368

11 %

(3 %)

(3 %)

      Total revenues

14,059

100 %

12,941

100 %

9 %

9 %

OPERATING EXPENSES

Cloud services and license support

2,746

19 %

2,274

17 %

21 %

21 %

Hardware

172

1 %

213

2 %

(20 %)

(19 %)

Services

1,167

8 %

1,253

10 %

(7 %)

(7 %)

Sales and marketing

2,190

16 %

2,093

16 %

5 %

5 %

Research and development

2,471

18 %

2,226

17 %

11 %

11 %

General and administrative

387

3 %

375

3 %

3 %

3 %

Amortization of intangible assets

591

4 %

755

6 %

(22 %)

(22 %)

Acquisition related and other

31

0 %

47

0 %

(34 %)

(33 %)

Restructuring

84

1 %

83

1 %

0 %

1 %

      Total operating expenses

9,839

70 %

9,319

72 %

6 %

6 %

OPERATING INCOME

4,220

30 %

3,622

28 %

17 %

16 %

Interest expense

(866)

(6 %)

(888)

(7 %)

(3 %)

(3 %)

Non-operating income (expenses), net

36

0 %

(14)

0 %

*

*

INCOME BEFORE INCOME TAXES

3,390

24 %

2,720

21 %

25 %

24 %

Provision for income taxes

239

2 %

217

2 %

11 %

10 %

NET INCOME

$           3,151

22 %

$           2,503

19 %

26 %

26 %

EARNINGS PER SHARE:

Basic

$              1.13

$              0.91

Diluted

$              1.10

$              0.89

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Basic

2,790

2,746

Diluted

2,869

2,817

(1)

We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in effect on May 31, 2024, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during the respective periods. Movements in international currencies relative to the United States dollar during the three months ended November 30, 2024 compared with the corresponding prior year period increased our operating income by 1 percentage point.

Not meaningful

ORACLE  CORPORATION

Q2 FISCAL 2025 FINANCIAL RESULTS

RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)

($ in millions, except per share data)

Three Months Ended November 30,

% Increase
(Decrease)
in US $

% Increase
(Decrease)
in Constant
Currency (2)

2024

2024

2023

2023

GAAP

Non-GAAP

GAAP

Non-GAAP

GAAP

Adj.

Non-GAAP

GAAP

Adj.

Non-GAAP

TOTAL REVENUES

$       14,059

$            -

$       14,059

$       12,941

$            -

$       12,941

9 %

9 %

9 %

9 %

TOTAL OPERATING EXPENSES

$         9,839

$   (1,876)

$         7,963

$         9,319

$   (1,914)

$         7,405

6 %

8 %

6 %

8 %

     Stock-based compensation (3)

1,170

(1,170)

-

1,029

(1,029)

-

14 %

*

14 %

*

     Amortization of intangible assets (4)

591

(591)

-

755

(755)

-

(22 %)

*

(22 %)

*

     Acquisition related and other

31

(31)

-

47

(47)

-

(34 %)

*

(33 %)

*

     Restructuring

84

(84)

-

83

(83)

-

0 %

*

1 %

*

OPERATING INCOME

$         4,220

$     1,876

$         6,096

$         3,622

$     1,914

$         5,536

17 %

10 %

16 %

10 %

OPERATING MARGIN %

30 %

43 %

28 %

43 %

203 bp.

58 bp.

196 bp.

52 bp.

INCOME TAX EFFECTS (5)

$            239

$        820

$         1,059

$            217

$        655

$            872

11 %

22 %

10 %

21 %

NET INCOME

$         3,151

$     1,056

$         4,207

$         2,503

$     1,259

$         3,762

26 %

12 %

26 %

12 %

DILUTED EARNINGS PER SHARE

$           1.10

$           1.47

$           0.89

$           1.34

24 %

10 %

23 %

10 %

DILUTED WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING

2,869

-

2,869

2,817

-

2,817

2 %

2 %

2 %

2 %

(1)

This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A.

(2)

We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in effect on May 31, 2024, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during the respective periods.

(3)

Stock-based compensation was included in the following GAAP operating expense categories:

Three Months Ended

Three Months Ended

November 30, 2024

November 30, 2023

GAAP

Adj.

Non-GAAP

GAAP

Adj.

Non-GAAP

     Cloud services and license support

$            158

$      (158)

$               -

$            137

$      (137)

$               -

     Hardware

8

(8)

-

6

(6)

-

     Services

53

(53)

-

45

(45)

-

     Sales and marketing

195

(195)

-

174

(174)

-

     Research and development

657

(657)

-

573

(573)

-

     General and administrative

99

(99)

-

94

(94)

-

           Total stock-based compensation

$         1,170

$   (1,170)

$               -

$         1,029

$   (1,029)

$               -

(4)

Estimated future annual amortization expense related to intangible assets as of November 30, 2024 was as follows:

     Remainder of fiscal 2025

$         1,092

     Fiscal 2026

1,639

     Fiscal 2027

672

     Fiscal 2028

635

     Fiscal 2029

561

     Fiscal 2030

522

     Thereafter

558

           Total intangible assets, net

$         5,679

(5)

Income tax effects were calculated reflecting an effective GAAP tax rate of 7.1% and 8.0% in the second quarter of fiscal 2025 and 2024, respectively, and an effective non-GAAP tax rate of 20.1% and 18.8% in the second quarter of fiscal 2025 and 2024, respectively. The difference in our GAAP and non-GAAP tax rates in each of the second quarters of fiscal 2025 and 2024 was primarily due to the net tax effects related to stock-based compensation expense; acquisition related and other items, including the tax effects on amortization of intangible assets; and restructuring expense, partially offset by the net deferred tax effects related to an income tax benefit that was previously recorded due to the partial realignment of our legal entity structure.

Not meaningful

ORACLE  CORPORATION

Q2 FISCAL 2025 YEAR TO DATE FINANCIAL RESULTS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in millions, except per share data)

Six Months Ended November 30,

% Increase

% Increase

(Decrease)

% of

% of

(Decrease)

in Constant

2024

Revenues

2023

Revenues

in US $

Currency (1)

REVENUES

Cloud services and license support

$         21,324

78 %

$         19,186

75 %

11 %

11 %

Cloud license and on-premise license

2,065

8 %

1,987

8 %

4 %

5 %

Hardware

1,383

5 %

1,470

6 %

(6 %)

(5 %)

Services

2,594

9 %

2,751

11 %

(6 %)

(5 %)

      Total revenues

27,366

100 %

25,394

100 %

8 %

8 %

OPERATING EXPENSES

Cloud services and license support

5,344

20 %

4,452

18 %

20 %

20 %

Hardware

333

1 %

432

2 %

(23 %)

(22 %)

Services

2,314

8 %

2,465

10 %

(6 %)

(6 %)

Sales and marketing

4,226

15 %

4,118

16 %

3 %

3 %

Research and development

4,777

18 %

4,442

17 %

8 %

8 %

General and administrative

745

3 %

769

3 %

(3 %)

(3 %)

Amortization of intangible assets

1,215

4 %

1,518

6 %

(20 %)

(20 %)

Acquisition related and other

44

0 %

58

0 %

(25 %)

(25 %)

Restructuring

157

1 %

222

1 %

(29 %)

(29 %)

      Total operating expenses

19,155

70 %

18,476

73 %

4 %

4 %

OPERATING INCOME

8,211

30 %

6,918

27 %

19 %

19 %

Interest expense

(1,708)

(6 %)

(1,760)

(7 %)

(3 %)

(3 %)

Non-operating income (expenses), net

57

0 %

(63)

0 %

*

*

INCOME BEFORE INCOME TAXES

6,560

24 %

5,095

20 %

29 %

30 %

Provision for income taxes

480

2 %

172

1 %

179 %

181 %

NET INCOME

$           6,080

22 %

$           4,923

19 %

24 %

24 %

EARNINGS PER SHARE:

Basic

$              2.19

$              1.80

Diluted

$              2.13

$              1.75

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Basic

2,775

2,737

Diluted

2,860

2,820

(1)

We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in effect on May 31, 2024, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during the respective periods. Movements in international currencies relative to the United States dollar during the six months ended November 30, 2024 compared with the corresponding prior year period had no impact to our total revenues, total operating expenses and operating income.

Not meaningful

ORACLE  CORPORATION

Q2 FISCAL 2025 YEAR TO DATE FINANCIAL RESULTS

RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)

($ in millions, except per share data)

Six Months Ended November 30,

% Increase
(Decrease)
in US $

% Increase 
(Decrease)
in Constant
Currency (2)

2024

2024

2023

2023

GAAP

Non-GAAP

GAAP

Non-GAAP

GAAP

Adj.

Non-GAAP

GAAP

Adj.

Non-GAAP

TOTAL REVENUES

$       27,366

$            -

$       27,366

$       25,394

$           -

$       25,394

8 %

8 %

8 %

8 %

TOTAL OPERATING EXPENSES

$       19,155

$   (3,592)

$       15,563

$       18,476

$   (3,676)

$       14,800

4 %

5 %

4 %

6 %

     Stock-based compensation (3)

2,176

(2,176)

-

1,878

(1,878)

-

16 %

*

16 %

*

     Amortization of intangible assets (4)

1,215

(1,215)

-

1,518

(1,518)

-

(20 %)

*

(20 %)

*

     Acquisition related and other

44

(44)

-

58

(58)

-

(25 %)

*

(25 %)

*

     Restructuring

157

(157)

-

222

(222)

-

(29 %)

*

(29 %)

*

OPERATING INCOME

$         8,211

$     3,592

$       11,803

$         6,918

$     3,676

$       10,594

19 %

11 %

19 %

12 %

OPERATING MARGIN %

30 %

43 %

27 %

42 %

276 bp.

141 bp.

279 bp.

140 bp.

INCOME TAX EFFECTS (5)

$            480

$     1,500

$         1,980

$            172

$     1,478

$         1,650

179 %

20 %

181 %

21 %

NET INCOME

$         6,080

$     2,092

$         8,172

$         4,923

$     2,198

$         7,121

24 %

15 %

24 %

15 %

DILUTED EARNINGS PER SHARE

$           2.13

$           2.86

$           1.75

$           2.53

22 %

13 %

23 %

14 %

DILUTED WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING

2,860

-

2,860

2,820

-

2,820

1 %

1 %

1 %

1 %

(1)

This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A.

(2)

We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in effect on May 31, 2024, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during the respective periods.

(3)

Stock-based compensation was included in the following GAAP operating expense categories:

Six Months Ended

Six Months Ended

November 30, 2024

November 30, 2023

GAAP

Adj.

Non-GAAP

GAAP

Adj.

Non-GAAP

     Cloud services and license support

$            299

$      (299)

$               -

$            248

$      (248)

$               -

     Hardware

14

(14)

-

11

(11)

-

     Services

96

(96)

-

78

(78)

-

     Sales and marketing

356

(356)

-

309

(309)

-

     Research and development

1,226

(1,226)

-

1,057

(1,057)

-

     General and administrative

185

(185)

-

175

(175)

-

           Total stock-based compensation

$         2,176

$   (2,176)

$               -

$         1,878

$   (1,878)

$               -

(4)

Estimated future annual amortization expense related to intangible assets as of November 30, 2024 was as follows:

     Remainder of fiscal 2025

$         1,092

     Fiscal 2026

1,639

     Fiscal 2027

672

     Fiscal 2028

635

     Fiscal 2029

561

     Fiscal 2030

522

     Thereafter

558

           Total intangible assets, net

$         5,679

(5)

Income tax effects were calculated reflecting an effective GAAP tax rate of 7.3% and 3.4% in the first half of fiscal 2025 and 2024, respectively, and an effective non-GAAP tax rate of 19.5% and 18.8% in the first half of fiscal 2025 and 2024, respectively. The difference in our GAAP and non-GAAP tax rates in each of the first half of fiscal 2025 and 2024 was primarily due to the net tax effects related to stock-based compensation expense; acquisition related and other items, including the tax effects on amortization of intangible assets; and restructuring expense, partially offset by the net deferred tax effects related to an income tax benefit that was previously recorded due to the partial realignment of our legal entity structure.

Not meaningful

ORACLE  CORPORATION

Q2 FISCAL 2025 FINANCIAL RESULTS

CONDENSED CONSOLIDATED BALANCE SHEETS

($ in millions)

November 30,

May 31,

2024

2024

ASSETS

Current Assets:

Cash and cash equivalents

$               10,941

$               10,454

Marketable securities

370

207

Trade receivables, net

8,177

7,874

Prepaid expenses and other current assets

4,015

4,019

     Total Current Assets

23,503

22,554

Non-Current Assets:

   Property, plant and equipment, net

26,432

21,536

   Intangible assets, net

5,679

6,890

   Goodwill, net

62,204

62,230

   Deferred tax assets

11,984

12,273

   Other non-current assets

18,681

15,493

     Total Non-Current Assets

124,980

118,422

TOTAL ASSETS

$            148,483

$            140,976

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

Notes payable and other borrowings, current

$                 8,162

$               10,605

Accounts payable

2,679

2,357

Accrued compensation and related benefits

1,653

1,916

Deferred revenues

9,430

9,313

Other current liabilities

7,128

7,353

     Total Current Liabilities

29,052

31,544

Non-Current Liabilities:

Notes payable and other borrowings, non-current

80,462

76,264

Income taxes payable

9,553

10,817

Deferred tax liabilities

2,864

3,692

Other non-current liabilities

12,316

9,420

     Total Non-Current Liabilities

105,195

100,193

Stockholders' Equity

14,236

9,239

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$            148,483

$            140,976

Q2 FISCAL 2025 FINANCIAL RESULTS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

($ in millions)

Six Months Ended November 30,

Cash Flows From Operating Activities:

Net income

$        6,080

$        4,923

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

1,712

1,510

Amortization of intangible assets

1,215

1,518

Deferred income taxes

(601)

(1,049)

Stock-based compensation

2,176

1,878

Other, net

298

331

Changes in operating assets and liabilities:

(Increase) decrease in trade receivables, net

(451)

145

Decrease in prepaid expenses and other assets

676

301

Decrease in accounts payable and other liabilities

(1,143)

(1,048)

Decrease in income taxes payable

(1,685)

(1,541)

Increase in deferred revenues

454

149

Net cash provided by operating activities

8,731

7,117

Cash Flows From Investing Activities:

Purchases of marketable securities and other investments

(636)

(515)

Proceeds from sales and maturities of marketable securities and other investments

356

157

Acquisitions, net of cash acquired

-

(59)

Capital expenditures

(6,273)

(2,394)

Net cash used for investing activities

(6,553)

(2,811)

Cash Flows From Financing Activities:

Payments for repurchases of common stock

(300)

(600)

Proceeds from issuances of common stock

307

426

Shares repurchased for tax withholdings upon vesting of restricted stock-based awards

(898)

(1,733)

Payments of dividends to stockholders

(2,221)

(2,190)

(Repayments of) proceeds from issuances of commercial paper, net

(396)

1,749

Proceeds from issuances of senior notes and term loan credit agreements, net of issuance costs

11,837

-

Repayments of senior notes and term loan credit agreements

(9,700)

(3,500)

Other, net

(276)

31