Oracle Announces Fiscal 2021 Fourth Quarter and Fiscal Full Year Financial Results

Q4 FISCAL 2021 FINANCIAL RESULTS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in millions, except per share data)

Three Months Ended May 31,

% Increase

% Increase

(Decrease)

% of 

% of 

(Decrease)

in Constant

2021

Revenues

2020

Revenues

in US $

Currency (1)

REVENUES

Cloud services and license support 

$           7,389

66%

$           6,845

66%

4%

Cloud license and on-premise license

2,144

19%

1,959

19%

9%

5%

Hardware

882

8%

901

8%

(6%)

Services

812

7%

735

7%

11%

6%

      Total revenues

11,227

100%

10,440

100%

8%

4%

OPERATING EXPENSES

Cloud services and license support 

1,214

11%

1,012

10%

20%

17%

Hardware

253

2%

288

3%

(12%)

(15%)

Services

655

6%

669

6%

(2%)

(7%)

Sales and marketing

2,077

19%

1,959

19%

6%

2%

Research and development 

1,715

15%

1,479

14%

16%

14%

General and administrative

306

3%

278

3%

10%

6%

Amortization of intangible assets

342

3%

366

3%

(7%)

(7%)

Acquisition related and other

30

0%

11

0%

158%

146%

Restructuring

94

1%

69

1%

37%

25%

      Total operating expenses 

6,686

60%

6,131

59%

9%

6%

OPERATING INCOME 

40%

4,309

41%

5%

0%

Interest expense

(697)

(6%)

(580)

(6%)

20%

20%

Non-operating income (expenses), net

313

3%

(33)

0%

*

*

INCOME BEFORE PROVISION FOR INCOME TAXES

4,157

37%

3,696

35%

12%

6%

Provision for income taxes

(1%)

(580)

(5%)

(79%)

(80%)

NET INCOME 

$           4,033

36%

$           3,116

30%

29%

22%

EARNINGS PER SHARE:

Basic

$              1.42

$              1.01

Diluted

$              1.37

$              0.99

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Basic

2,847

3,091

Diluted

2,943

3,162

(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, 2020, 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 May 31, 2021 compared with the corresponding prior year period increased our revenues by 4 percentage points, operating expenses by 3 percentage points and operating income by 5 percentage points.

*

Not meaningful

ORACLE  CORPORATION

Q4 FISCAL 2021 FINANCIAL RESULTS

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

($ in millions, except per share data)

Three Months Ended May 31,

% Increase
(Decrease)
in US $

% Increase (Decrease) in
Constant Currency (2) 

2021

2021

2020

2020

GAAP

Non-GAAP

GAAP

Non-GAAP

GAAP

Adj.

Non-GAAP

GAAP

Adj.

Non-GAAP

TOTAL REVENUES

$   11,227

$           -

$   11,227

$   10,440

$            1

$   10,441

8%

8%

4%

4%

     Cloud services and license support

7,389

-

7,389

6,845

1

6,846

8%

8%

4%

4%

TOTAL OPERATING EXPENSES

$     6,686

$     5,778

$     6,131

$       (832)

$     5,299

9%

9%

6%

6%

     Stock-based compensation (3)

442

(442)

-

386

(386)

-

15%

*

15%

*

     Amortization of intangible assets (4)

342

(342)

-

366

(366)

-

(7%)

*

(7%)

*

     Acquisition related and other

30

(30)

-

11

(11)

-

158%

*

146%

*

     Restructuring

94

(94)

-

69

(69)

-

37%

*

25%

*

OPERATING INCOME

$     4,541

$        908

$     5,449

$     4,309

$        833

$     5,142

5%

6%

0%

1%

OPERATING MARGIN %

40%

49%

41%

49%

(82) bp.

(71) bp.

(140) bp.

(109) bp.

INCOME TAX EFFECTS (5)

$       (124)

$       (417)

$       (541)

$       (580)

$       (170)

$       (750)

(79%)

(28%)

(80%)

(31%)

NET INCOME 

$     4,033

$        491

$     4,524

$     3,116

$        663

$     3,779

29%

20%

22%

14%

DILUTED EARNINGS PER SHARE

$       1.37

$       1.54

$       0.99

$       1.20

39%

29%

31%

22%

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 

2,943

-

2,943

3,162

-

3,162

(7%)

(7%)

(7%)

(7%)

(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, 2020, 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

May 31, 2021

May 31, 2020

GAAP

Adj.

Non-GAAP

GAAP

Adj.

Non-GAAP

     Cloud services and license support

$          35

$         (35)

$           -

$          27

$         (27)

$           -

     Hardware

3

(3)

-

3

(3)

-

     Services

14

(14)

-

12

(12)

-

     Sales and marketing

80

(80)

-

69

(69)

-

     Research and development

291

(291)

-

254

(254)

-

     General and administrative

19

(19)

-

21

(21)

-

           Total stock-based compensation

$        442

$       (442)

$           -

$        386

$       (386)

$           -

(4)

Estimated future annual amortization expense related to intangible assets as of May 31, 2021 was as follows:

     Fiscal 2022

$     1,122

     Fiscal 2023

698

     Fiscal 2024

453

     Fiscal 2025

123

     Fiscal 2026

24

     Thereafter

10

           Total intangible assets, net

$     2,430

(5)

Income tax effects were calculated reflecting an effective GAAP tax rate of 3.0% and 15.7% in the fourth quarter of fiscal 2021 and 2020, respectively, and an effective non-GAAP tax rate of 10.7% and 16.6% in the fourth quarter of fiscal 2021 and 2020, respectively. The difference in our GAAP and non-GAAP tax rates in each of the fourth quarter of fiscal 2021 and 2020 was primarily due to the net tax effects on stock-based compensation expense and acquisition related items, including the tax effects of amortization of intangible assets.

*   

ORACLE  CORPORATION

FISCAL 2021 YEAR TO DATE FINANCIAL RESULTS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in millions, except per share data)

Year Ended May 31,

% Increase

% Increase

(Decrease)

% of 

% of 

(Decrease)

in Constant

2021

Revenues

2020

Revenues

in US $

Currency (1)

REVENUES

Cloud services and license support 

$         28,700

71%

$         27,392

70%

5%

3%

Cloud license and on-premise license

5,399

13%

5,127

13%

5%

2%

Hardware 

3,359

8%

3,443

9%

(2%)

(4%)

Services

3,021

8%

3,106

8%

(3%)

(5%)

      Total revenues

40,479

100%

39,068

100%

4%

2%

OPERATING EXPENSES

Cloud services and license support 

4,353

11%

4,006

10%

9%

7%

Hardware

972

2%

1,116

3%

(13%)

(14%)

Services

2,530

6%

2,816

7%

(10%)

(12%)

Sales and marketing

7,682

19%

8,094

21%

(5%)

(7%)

Research and development 

6,527

16%

6,067

15%

8%

7%

General and administrative

1,254

3%

1,181

3%

6%

6%

Amortization of intangible assets

1,379

4%

1,586

4%

(13%)

(14%)

Acquisition related and other

138

0%

56

0%

147%

145%

Restructuring

431

1%

250

1%

73%

66%

      Total operating expenses 

25,266

62%

25,172

64%

0%

(1%)

OPERATING INCOME 

15,213

38%

13,896

36%

9%

6%

Interest expense

(2,496)

(6%)

(1,995)

(5%)

25%

25%

Non-operating income, net

282

0%

162

0%

74%

95%

INCOME BEFORE BENEFIT FROM (PROVISION FOR) INCOME TAXES

12,999

32%

12,063

31%

8%

4%

Benefit from (provision for) income taxes

747

2%

(1,928)

(5%)

*

*

NET INCOME 

$         13,746

34%

$         10,135

26%

36%

30%

EARNINGS PER SHARE:

Basic

$              4.67

$              3.16

Diluted

$              4.55

$              3.08

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Basic

2,945

3,211

Diluted

3,022

3,294

(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, 2020, 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 year ended May 31, 2021 compared with the corresponding prior year period increased our revenues by 2 percentage points, operating expenses by 1 percentage point and operating income by 3 percentage points. 

*

Not meaningful

ORACLE  CORPORATION

FISCAL 2021 YEAR TO DATE FINANCIAL RESULTS

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

($ in millions, except per share data)

Year Ended May 31,

% Increase
(Decrease)
in US $

% Increase (Decrease) in
Constant Currency (2) 

2021

2021

2020

2020

GAAP

GAAP

Non-GAAP

GAAP

Adj.

Non-GAAP

GAAP

Adj.

Non-GAAP

TOTAL REVENUES

$   40,479

$            2

$   40,481

$   39,068

$            4

$   39,072

4%

4%

2%

2%

Cloud services and license support

28,700

2

28,702

27,392

4

27,396

5%

5%

3%

3%

TOTAL OPERATING EXPENSES

$   25,266

$   (3,785)

$   21,481

$   25,172

$   (3,482)

$   21,690

0%

(1%)

(1%)

(2%)

Stock-based compensation (3)

1,837

(1,837)

-

1,590

(1,590)

-

16%

*

16%

*

Amortization of intangible assets (4)

1,379

(1,379)

-

1,586

(1,586)

-

(13%)

*

(14%)

*

Acquisition related and other

138

(138)

-

56

(56)

-

147%

*

145%

*

Restructuring

431

(431)

-

250

(250)

-

73%

*

66%

*

OPERATING INCOME

$   15,213

$     3,787

$   19,000

$   13,896

$     3,486

$   17,382

9%

9%

6%

6%

OPERATING MARGIN %

38%

47%

36%

44%

201 bp.

245 bp.

151 bp.

206 bp.

INCOME TAX EFFECTS (5)

$        747

$   (3,408)

$   (2,661)

$   (1,928)

$       (939)

$   (2,867)

*

(7%)

*

(10%)

NET INCOME 

$   13,746

$        379

$   14,125

$   10,135

$     2,547

$   12,682

36%

11%

30%

8%

DILUTED EARNINGS PER SHARE

$       4.55

$       4.67

$       3.08

$       3.85

48%

21%

43%

18%

DILUTED WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING

3,022

-

3,022

3,294

-

3,294

(8%)

(8%)

(8%)

(8%)

(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, 2020, 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:

Year Ended

Year Ended

May 31, 2021

May 31, 2020

GAAP

Adj.

Non-GAAP

GAAP

Adj.

Non-GAAP

     Cloud services and license support

$        134

$       (134)

$           -

$        110

$       (110)

$           -

     Hardware

11

(11)

-

11

(11)

-

     Services

55

(55)

-

54

(54)

-

     Sales and marketing

313

(313)

-

261

(261)

-

     Research and development

1,188

(1,188)

-

1,035

(1,035)

-

     General and administrative

136

(136)

-

119

(119)

-

           Total stock-based compensation

$     1,837

$   (1,837)

$           -

$     1,590

$   (1,590)

$           -

(4)

Estimated future annual amortization expense related to intangible assets as of May 31, 2021 was as follows:

     Fiscal 2022

$     1,122

     Fiscal 2023

698

     Fiscal 2024

453

     Fiscal 2025

123

     Fiscal 2026

24

     Thereafter

10

           Total intangible assets, net

$     2,430

(5)

Income tax effects were calculated reflecting an effective GAAP tax rate of (5.7%) and 16.0% in fiscal 2021 and 2020, respectively, and an effective non-GAAP tax rate of 15.9% and 18.4% in fiscal 2021 and 2020, respectively. The difference in our GAAP and non-GAAP tax rates for fiscal 2021 was primarily due to a net tax benefit of $2.3 billion related to the partial realignment of our legal entity structure (refer to Appendix A for additional information), the net tax effects on stock-based compensation expense, and the net tax effects related to acquisition related items, including the net tax effects on amortization of intangible assets. The difference between our GAAP and non-GAAP tax rates in fiscal 2020 was primarily due to the net tax effects on stock-based compensation expense and acquisition related items, including the tax effects of amortization of intangible assets.

Not meaningful

ORACLE  CORPORATION

FISCAL 2021 FINANCIAL RESULTS

CONDENSED CONSOLIDATED BALANCE SHEETS

($ in millions)

May 31,

2020

ASSETS

Current Assets:

Cash and cash equivalents

$               30,098

$               37,239

Marketable securities

16,456

5,818

Trade receivables, net

5,409

5,551

Prepaid expenses and other current assets

3,604

3,532

Total Current Assets

52,140

Non-Current Assets:

   Property, plant and equipment, net

7,049

6,244

   Intangible assets, net

2,430

3,738

   Goodwill, net

43,935

43,769

   Deferred tax assets

13,636

3,252

   Other non-current assets

8,490

6,295

Total Non-Current Assets

75,540

63,298