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Q4 FY18 GAAP EPS UP 8% TO $0.82 and NON-GAAP EPS UP 11% TO $0.99

REDWOOD SHORES, Calif., June 19, 2018 /PRNewswire/ — Oracle Corporation (NYSE: ORCL) today announced fiscal 2018 Q4 results and fiscal 2018 full year results. In Q4, Total Revenues were up 3% to $11.3 billion compared to Q4 last year. Q4 Cloud Services and License Support revenues were up 8% to $6.8 billion. Q4 Cloud License and On-Premise License revenues were down 5% to $2.5 billion.

Q4 GAAP Operating Income was up 8% to $4.4 billion, and GAAP Operating Margin was 39%. Q4 Non-GAAP Operating Income was up 6% to $5.3 billion, and non-GAAP Operating Margin was 47%. Q4 GAAP Net Income was $3.4 billion, and non-GAAP Net Income was $4.1 billion. Q4 GAAP Earnings Per Share was up 8% to $0.82, while non-GAAP Earnings Per Share was up 11% to $0.99.

At the end of Q4, short-term deferred revenues were up 2% to $8.4 billion, while Operating Cash Flow on a trailing twelve-month basis was up 9%, or $1.3 billion, to a record $15.4 billion.

For the full fiscal year 2018, Total Revenues were up 6% to $39.8 billion compared to fiscal 2017. FY18 Cloud Services and License Support revenues were up 10% to $26.3 billion. FY18 Cloud License and On-Premise License revenues were down 4% to $6.2 billion.

FY18 GAAP Operating Income was up 8% to $13.7 billion, and GAAP Operating Margin was 34%. FY18 Non-GAAP Operating Income was up 9% to $17.6 billion, and non-GAAP Operating Margin was 44%. FY18 GAAP Net Income was $3.8 billion, and non-GAAP Net Income was $13.2 billion. FY18 GAAP Earnings Per Share was $0.90, while Non-GAAP Earnings Per Share was $3.12.

“Last year, I forecast double-digit non-GAAP earnings per share growth for FY18 and we delivered 14% growth this year, largely driven by strong growth in our cloud businesses,” said Oracle CEO, Safra Catz. “Looking ahead to FY19, I expect revenue growth will enable us to deliver double-digit non-GAAP earnings per share growth once again.”

“We had a great fourth quarter with total revenues more than $200 million above our constant currency forecast,” said Oracle CEO, Mark Hurd. “Our strategic Fusion ERP and HCM SaaS cloud applications suite revenues grew over 50% in the fourth quarter, and we expect continued strong growth from our Fusion SaaS suites throughout FY19.”

“Some of our largest customers have now begun the process of moving their on-premise Oracle databases to the Oracle Cloud,” said Oracle Chairman and CTO, Larry Ellison. “For example, AT&T is moving thousands of databases and tens of thousands of terabytes of data into the Oracle Cloud. We think that these large scale migrations of Oracle database to the cloud will drive our PaaS and IaaS businesses throughout FY19.”

The Board of Directors also declared a quarterly cash dividend of $0.19 per share of outstanding common stock. This dividend will be paid to stockholders of record as of the close of business on July 17, 2018, with a payment date of July 31, 2018.

Q4 Fiscal 2018 Earnings Conference Call and Webcast

Oracle will hold a conference call and webcast today to discuss these results at 2:00 p.m. Pacific. You may listen to the call by dialing (816) 287-5563, Passcode: 425392. To access the live webcast of this event, please visit the Oracle Investor Relations website at http://www.oracle.com/investor. In addition, Oracle’s Q4 results and fiscal 2018 financial tables are available on the Oracle Investor Relations website.

A replay of the conference call will also be available by dialing (855) 859-2056 or (404) 537-3406, Pass Code: 6866209.

About Oracle

Oracle offers a comprehensive and fully integrated stack of cloud applications and platform services. For more information about Oracle (NYSE: ORCL), visit www.oracle.com or contact Investor Relations at investor_us@oracle.com or (650) 506-4073.

Trademarks

Oracle and Java are registered trademarks of Oracle and/or its affiliates. Other names may be trademarks of their respective owners.

“Safe Harbor” Statement: Statements in this press release relating to Oracle’s future plans, expectations, beliefs, intentions and prospects, including statements regarding our expectations for future growth in revenues, non-GAAP earnings per share and our Fusion SaaS suite of products, and our beliefs that large scale customer cloud migrations will drive our PaaS and IaaS businesses in FY19, are “forward-looking statements” and are subject to material risks and uncertainties. Many factors could affect our current expectations and our actual results, and could cause actual results to differ materially. We presently consider the following to be among the important factors that could cause actual results to differ materially from expectations: (1) Our cloud computing strategy, including our Oracle Cloud SaaS, PaaS, IaaS and data as a service offerings, may not be successful. (2) If we are unable to develop new or sufficiently differentiated products and services, enhance and improve our products and support services in a timely manner or position and price our products and services to meet demand, customers may not buy cloud licenses and on-premise licenses, cloud services or hardware products or purchase or renew support contracts. (3) If the security measures for our products and services are compromised or if our products and services contain significant coding, manufacturing or configuration errors, we may experience reputational harm, legal claims and reduced sales.  (4) Economic, political and market conditions can adversely affect our business, results of operations and financial condition, including our revenue growth and profitability, which in turn could adversely affect our stock price. (5) Our international sales and operations subject us to additional risks that can adversely affect our operating results, including risks relating to foreign currency gains and losses. (6) We have an active acquisition program and our acquisitions may not be successful, may involve unanticipated costs or other integration issues or may disrupt our existing operations. (7) We may fail to achieve our financial forecasts due to such factors as delays or size reductions in transactions, fewer large transactions in a particular quarter, fluctuations in currency exchange rates, delays in delivery of new products or releases or a decline in our renewal rates for support contracts. A detailed discussion of these factors and other risks that affect our business is contained in our U.S. Securities and Exchange Commission (SEC) filings, including our most recent reports on Form 10-K and Form 10-Q, particularly under the heading “Risk Factors.” Copies of these filings are available online from the SEC or by contacting Oracle Corporation’s Investor Relations Department at (650) 506-4073 or by clicking on SEC Filings on Oracle’s Investor Relations website at http://www.oracle.com/investor. All information set forth in this press release is current as of June 19, 2018. Oracle undertakes no duty to update any statement in light of new information or future events.

 

ORACLE  CORPORATION

Q4 FISCAL 2018 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

2018

Revenues

2017

Revenues

in US $

Currency (1)

REVENUES

Cloud services and license support 

$ 6,770

60%

$ 6,258

58%

8%

6%

Cloud license and on-premise license

2,483

22%

2,626

24%

(5%)

(6%)

Hardware

1,115

10%

1,114

10%

0%

(2%)

Services

883

8%

894

8%

(1%)

(3%)

      Total revenues

11,251

100%

10,892

100%

3%

2%

OPERATING EXPENSES

Cloud services and license support 

962

8%

835

8%

15%

14%

Hardware

462

4%

440

4%

5%

3%

Services

755

7%

728

7%

4%

2%

Sales and marketing

2,324

20%

2,313

21%

0%

(1%)

Research and development 

1,544

14%

1,609

15%

(4%)

(4%)

General and administrative

308

3%

317

3%

(3%)

(5%)

Amortization of intangible assets

415

4%

441

4%

(6%)

(6%)

Acquisition related and other

20

0%

18

0%

9%

8%

Restructuring

81

1%

118

1%

(32%)

(34%)

      Total operating expenses 

6,871

61%

6,819

63%

1%

0%

OPERATING INCOME 

4,380

39%

4,073

37%

8%

5%

Interest expense

(547)

(5%)

(481)

(4%)

14%

14%

Non-operating income, net 

308

3%

168

2%

83%

87%

INCOME BEFORE PROVISION FOR INCOME TAXES

4,141

37%

3,760

35%

10%

8%

Provision for income taxes

733

7%

529

5%

39%

39%

NET INCOME

$ 3,408

30%

$ 3,231

30%

5%

2%

EARNINGS PER SHARE:

Basic

$    0.84

$    0.78

Diluted

$    0.82

$    0.76

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Basic

4,046

4,132

Diluted

4,149

4,248

(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, 2017, 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, 2018 compared with the corresponding prior year period increased our revenues by 1 percentage point, operating expenses by 1 percentage point and operating income by 3 percentage points.

 

ORACLE  CORPORATION

 Q4 FISCAL 2018 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) 

2018

2018

2017

2017

GAAP

Non-GAAP

GAAP

Non-GAAP

GAAP

Adj.

Non-GAAP

GAAP

Adj.

Non-GAAP

TOTAL REVENUES

$ 11,251

$       9

$   11,260

$ 10,892

$     50

$   10,942

3%

3%

2%

1%

Cloud services and license support

6,770

9

6,779

6,258

50

6,308

8%

7%

6%

5%

TOTAL OPERATING EXPENSES

$    6,871

$ (909)

$     5,962

$    6,819

$ (893)

$     5,926

1%

1%

0%

(1%)

Sales and marketing (3)

2,324

(84)

2,240

2,313

(62)

2,251

0%

0%

(1%)

(2%)

Stock-based compensation (4)

309

(309)

254

(254)

22%

*

22%

*

Amortization of intangible assets (5)

415

(415)

441

(441)

(6%)

*

(6%)

*

Acquisition related and other

20

(20)

18

(18)

9%

*

8%

*

Restructuring

81

(81)

118

(118)

(32%)

*

(34%)

*

OPERATING INCOME

$    4,380

$   918

$     5,298

$    4,073

$   943

$     5,016

8%

6%

5%

4%

OPERATING MARGIN %

39%

47%

37%

46%

154 bp.

121 bp.

128 bp.

108 bp.

INCOME TAX EFFECTS (6)

$       733

$   239

$        972

$       529

$   412

$        941

39%

3%

39%

1%

NET INCOME

$    3,408

$   679

$     4,087

$    3,231

$   531

$     3,762

5%

9%

2%

7%

DILUTED EARNINGS PER SHARE 

$      0.82

$       0.99

$      0.76

$       0.89

8%

11%

5%

9%

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 

4,149

4,149

4,248

4,248

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