Oracle Announces Fiscal 2023 Second Quarter Financial Results

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    <br /> Oracle Announces Fiscal 2023 Second Quarter Financial Results<br />

    PR Newswire



    • Q2 GAAP Earnings per Share





      $0.63





      , Non-GAAP Earnings per Share





      $1.21


    • Q2 Total Revenue




      $12.3




      billion, up




      18%




      in USD, up




      25%




      in constant currency


    • Q2 Cloud Revenue (IaaS plus SaaS)




      $3.8




      billion, up




      43%




      in USD, up




      48%




      in constant currency


    • Q2 Cloud Infrastructure (IaaS) Revenue

      $1.0 billion

      , up




      53%




      in USD, up




      59%




      in constant currency


    • Q2 Cloud Application (SaaS) Revenue

      $2.8 billion

      , up 40% in USD, up 45% in constant currency


    • Q2 Fusion Cloud ERP (SaaS) Revenue

      $0.6 billion

      , up




      23%




      in USD, up




      28%




      in constant currency


    • Q2 NetSuite Cloud ERP (SaaS) Revenue

      $0.6 billion

      , up




      25%




      in USD, up




      29%




      in constant currency



    AUSTIN, Texas


    ,


    Dec. 12, 2022



    /PRNewswire/ — Oracle Corporation (NYSE: ORCL) today announced fiscal 20


    23 Q2 results. Total quarterly revenues were up


    18%


    year-over-year in USD and up


    25%


    in constant currency to


    $12.3


    billion. Cloud services and license support revenues were up


    14%


    in USD and up


    20%


    in constant currency to


    $8.6


    billion. Cloud license and on-premise license revenues were up


    16%


    in USD and up


    23%


    in constant currency to


    $1.4


    billion


    .


    For the second quarter of fiscal 2023, Cerner contributed

    $1.5 billion

    to total revenues.


    Q2 GAAP operating income was


    $3.1


    billion. Non-GAAP operating income was


    $5.1


    billion, up


    5%


    in USD and up


    12%


    in constant currency. GAAP operating margin was


    25%


    , and non-GAAP operating margin was


    41%


    . GAAP net income was


    $1.7


    billion, and non-GAAP net income was


    $3.3


    billion. Q2 GAAP earnings per share was



    $0.63



    while non-GAAP earnings per share was



    $1.21



    .


    Short-term deferred revenues were


    $8.7


    billion. Operating cash flow was


    $15.1


    billion during the trailing twelve months.


    The strengthening of the U.S. dollar compared to foreign currencies had a significant impact on results in the quarter. Without the impact of the U.S. dollar strengthening compared to foreign currencies, Oracle’s reported Q2 non-GAAP


    earnings per share


    would have been

    9 cents

    higher.


    “In Q2, Oracle’s total revenue grew 25% in constant currency—exceeding the high end of our guidance by more than

    $200 million

    ,” said Oracle CEO,

    Safra Catz

    . “That strong overall revenue growth was powered by our infrastructure and applications cloud businesses that grew 59% and 45% respectively, in constant currency. Fusion Cloud ERP grew 28% in constant currency, NetSuite Cloud ERP grew 29% in constant currency—each and every one of our strategic businesses delivered solid revenue growth in the quarter.”


    “Since the acquisition, Cerner has contributed to Oracle’s growth—and Oracle has helped Cerner improve its technology,” said Oracle Chairman and CTO,

    Larry Ellison

    . “But we are just beginning our mission to modernize healthcare information systems. In the wake of the COVID pandemic, there is a worldwide sense of urgency to transform and improve national healthcare systems. Our goals are ambitious: fully automate clinical trials to shorten the time it takes to deliver lifesaving new drugs to patients, enable doctors to easily access better information leading to better patient outcomes, and provide public health professionals with an early warning system that locates and identifies new pathogens in time to prevent the next pandemic. The scale of this opportunity is unprecedented—and so is the responsibility that goes along with it.”


    The board of directors declared a quarterly cash dividend of



    $0.32



    per share of outstanding common stock. This dividend will be paid to stockholders of record as of the close of business on January


    10


    , 2023, with a payment date of

    January 24, 2023

    .



    Earnings Conference Call and Webcast


    Oracle will hold a conference call and webcast today to discuss these results at

    4:00 p.m.

    Central. A live and replay webcast will be available on the Oracle Investor Relations website at

    www.oracle.com/investor/


    .




    About Oracle


    Oracle offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. For more information about Oracle (NYSE: ORCL), please visit us at





    www.oracle.com



    .


    Trademarks


    Oracle, Java, and MySQL are registered trademarks of Oracle Corporation.



    “Safe Harbor” Statement:



    Statements in this press release relating to Oracle’s future plans, expectations, beliefs, intentions and prospects, including statements regarding our plans to modernize healthcare information systems and improve public health, are “forward-looking statements” and are subject to material risks and uncertainties. Risks and uncertainties that could affect our current expectations and our actual results, include, among others: our ability to develop new products and services, integrate acquired products and services and enhance our existing products and services; supply chain constraints and third-party manufacturing and logistics delays; significant coding, manufacturing or configuration errors in our offerings; risks associated with acquisitions; the COVID-19 pandemic; economic, political and market conditions; information technology system failures, privacy concerns and cybersecurity breaches; unfavorable legal proceedings, government investigations, and complex and changing laws and regulations. A detailed discussion of these factors and other risks that affect our business is contained in our 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’s Investor Relations Department at (650) 506-4073 or by clicking on SEC Filings on the Oracle Investor Relations website at

    www.oracle.com/investor/

    . All information set forth in this press release is current as of

    December 12, 2022

    . Oracle undertakes no duty to update any statement in light of new information or future events.



    ORACLE  CORPORATION



    Q2 FISCAL 2023 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



    2022



    Revenues



    2021



    Revenues



    in US $



    Currency (1)



    REVENUES


    Cloud services and license support


    $           8,598


    70 %


    $          7,554


    73 %


    14 %


    20 %


    Cloud license and on-premise license


    1,435


    12 %


    1,237


    12 %


    16 %


    23 %


    Hardware


    850


    7 %


    767


    7 %


    11 %


    16 %


    Services


    1,392


    11 %


    802


    8 %


    74 %


    83 %



    Total revenues


    12,275


    100 %


    10,360


    100 %


    18 %


    25 %



    OPERATING EXPENSES


    Cloud services and license support


    1,891


    15 %


    1,259


    12 %


    50 %


    55 %


    Hardware


    286


    2 %


    229


    2 %


    25 %


    31 %


    Services


    1,181


    10 %


    671


    7 %


    76 %


    85 %


    Sales and marketing


    2,216


    18 %


    1,954


    19 %


    13 %


    18 %


    Research and development


    2,158


    18 %


    1,754


    17 %


    23 %


    26 %


    General and administrative


    366


    3 %


    319


    3 %


    15 %


    19 %


    Amortization of intangible assets


    907


    7 %


    299


    3 %


    203 %


    204 %


    Acquisition related and other (2)


    62


    1 %


    4,667


    45 %


    (99 %)


    (99 %)


    Restructuring


    137


    1 %


    32


    0 %


    330 %


    376 %



    Total operating expenses


    9,204


    75 %


    11,184


    108 %


    (18 %)


    (15 %)



    OPERATING INCOME (LOSS)


    3,071


    25 %


    (824)


    (8 %)


    *


    *


    Interest expense


    (856)


    (7 %)


    (679)


    (6 %)


    26 %


    26 %


    Non-operating (expenses) income, net


    (71)


    (1 %)


    7


    0 %


    *


    *



    INCOME (LOSS) BEFORE INCOME TAXES


    2,144


    17 %


    (1,496)


    (14 %)


    *


    *


    (Provision for) benefit from income taxes


    (403)


    (3 %)


    249


    2 %


    *


    *



    NET INCOME (LOSS)


    $            1,741


    14 %


    $          (1,247)


    (12 %)


    *


    *



    EARNINGS (LOSS) PER SHARE:


    Basic


    $              0.65


    $            (0.46)


    Diluted


    $              0.63


    $            (0.46)



    WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:


    Basic


    2,695


    2,694


    Diluted


    2,746


    2,694


    (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, 2022, 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, 2022 compared with the corresponding prior year period decreased

    our total revenues by 7 percentage points and total operating expenses by 3 percentage points.


    (2)


    Acquisition related and other for the three months ended November 30, 2021 included the impact of litigation related charges totaling

    $4.7 billion.


    *


    Not meaningful



    ORACLE  CORPORATION



    Q2 FISCAL 2023 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)



    2022



    2022



    2021



    2021



    GAAP



    Non-GAAP



    GAAP



    Non-GAAP



    GAAP



    Adj.



    Non-GAAP



    GAAP



    Adj.



    Non-GAAP



    TOTAL REVENUES


    $   12,275


    $            –


    $   12,275


    $  10,360


    $            –


    $   10,360


    18 %


    18 %


    25 %


    25 %



    TOTAL OPERATING EXPENSES


    $     9,204


    $   (2,015)


    $     7,189


    $  11,184


    $   (5,679)


    $     5,505


    (18 %)


    31 %


    (15 %)


    36 %


    Stock-based compensation (3)


    909


    (909)


    –


    681


    (681)


    –


    33 %


    *


    33 %


    *


    Amortization of intangible assets (4)


    907


    (907)


    –


    299


    (299)


    –


    203 %


    *


    204 %


    *


    Acquisition related and other


    62


    (62)


    –


    4,667


    (4,667)


    –


    (99 %)


    *


    (99 %)


    *


    Restructuring


    137


    (137)


    –


    32


    (32)


    –


    330 %


    *


    376 %


    *



    OPERATING INCOME (LOSS)


    $     3,071


    $     2,015


    $     5,086


    $      (824)


    $     5,679


    $     4,855


    *


    5 %


    *


    12 %



    OPERATING MARGIN %


    25 %


    41 %


    (8 %)


    47 %


    *


    (543) bp.


    *


    (485) bp.



    INCOME TAX EFFECTS (5)


    $       (403)


    $       (444)


    $       (847)


    $       249


    $    (1,052)


    $       (803)


    *


    5 %


    *


    14 %



    NET INCOME (LOSS)


    $     1,741


    $     1,571


    $     3,312


    $   (1,247)


    $     4,627


    $     3,380


    *


    (2 %)


    *


    6 %



    DILUTED EARNINGS (LOSS) PER SHARE (6)


    $       0.63


    $       1.21


    $     (0.46)


    $       1.21


    *


    (1 %)


    *


    7 %



    DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (6)


    2,746


    –


    2,746


    2,694


    91


    2,785


    2 %


    (1 %)


    2 %


    (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, 2022, 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,

    2022


    November 30,

    2021


    GAAP


    Adj.


    Non-GAAP


    GAAP


    Adj.


    Non-GAAP


    Cloud services and license support


    $        113


    $      (113)


    $           –


    $          50


    $         (50)


    $           –


    Hardware


    5


    (5)


    –


    4


    (4)


    –


    Services


    35


    (35)


    –


    18


    (18)


    –


    Sales and marketing


    151


    (151)


    –


    120


    (120)


    –


    Research and development


    510


    (510)


    –


    423


    (423)


    –


    General and administrative


    95


    (95)


    –


    66


    (66)


    –


    Total stock-based compensation


    $        909


    $      (909)


    $           –


    $        681


    $      (681)


    $           –


    (4)


    Estimated future annual amortization expense related to intangible assets as of November 30, 2022 was as follows:


    Remainder of fiscal 2023


    $     1,755


    Fiscal 2024


    2,995


    Fiscal 2025


    2,283


    Fiscal 2026


    1,620


    Fiscal 2027


    664


    Fiscal 2028


    635


    Thereafter


    1,641


    Total intangible assets, net


    $  11,593


    (5)


    Income tax effects were calculated reflecting an effective GAAP tax rate of 18.8% and (16.6%) in the second quarter of fiscal 2023 and 2022, respectively, and an effective non-GAAP tax

    rate of 20.4% and 19.2% in the second quarter of fiscal 2023 and 2022, respectively. The difference in our GAAP and non-GAAP tax rates in the second quarter of fiscal 2023 was primarily

    due to the net tax effects related to stock-based compensation expense and acquisition related and other items, including the tax effects on amortization of intangible assets,

    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. The difference

    in our GAAP and non-GAAP tax rates in the second quarter of fiscal 2022 was primarily due to the net tax effects related to stock-based compensation expense and acquisition related

    and other items, including the net tax effects for litigation related charges (refer to Appendix A for additional information), and the net tax effects on amortization of intangible assets,

    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.


    (6)


    In the second quarter of fiscal 2022, GAAP diluted loss per share was calculated excluding the dilutive effects of 91 million shares related to employee stock plans as the effect would

    be anti-dilutive.


    *


    Not meaningful



    ORACLE  CORPORATION



    Q2 FISCAL 2023 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



    2022



    Revenues



    2021



    Revenues



    in US $



    Currency (1)



    REVENUES


    Cloud services and license support


    $         17,015


    72 %


    $         14,925


    74 %


    14 %


    20 %


    Cloud license and on-premise license


    2,339


    10 %


    2,049


    10 %


    14 %


    21 %


    Hardware


    1,613


    7 %


    1,530


    8 %


    5 %


    11 %


    Services


    2,753


    11 %


    1,583


    8 %


    74 %


    83 %



    Total revenues


    23,720


    100 %


    20,087


    100 %


    18 %


    24 %



    OPERATING EXPENSES


    Cloud services and license support


    3,626


    15 %


    2,472


    12 %


    47 %


    52 %


    Hardware


    536


    2 %


    474


    2 %


    13 %


    18 %


    Services


    2,233


    9 %


    1,315


    7 %


    70 %


    79 %


    Sales and marketing


    4,393


    19 %


    3,808


    19 %


    15 %


    20 %


    Research and development


    4,251


    18 %


    3,438


    17 %


    24 %


    26 %


    General and administrative


    777


    3 %


    618


    3 %


    26 %


    30 %


    Amortization of intangible assets


    1,826


    8 %


    603


    3 %


    203 %


    204 %


    Acquisition related and other (2)


    103


    1 %


    4,687


    24 %


    (98 %)


    (98 %)


    Restructuring


    281


    1 %


    70


    0 %


    301 %


    340 %



    Total operating expenses


    18,026


    76 %


    17,485


    87 %


    3 %


    6 %



    OPERATING INCOME


    5,694


    24 %


    2,602


    13 %


    119 %


    159 %


    Interest expense


    (1,643)


    (7 %)


    (1,384)


    (7 %)


    19 %


    19 %


    Non-operating expenses, net


    (251)


    (1 %)


    (34)


    0 %


    638 %


    658 %



    INCOME BEFORE INCOME TAXES


    3,800


    16 %


    1,184


    6 %


    221 %


    359 %


    (Provision for) benefit from income taxes


    (511)


    (2 %)


    25


    0 %


    *


    *



    NET INCOME


    $            3,289


    14 %


    $            1,209


    6 %


    172 %


    289 %



    EARNINGS PER SHARE:


    Basic


    $              1.22


    $              0.44


    Diluted


    $              1.20


    $              0.43



    WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:


    Basic


    2,690


    2,731


    Diluted


    2,747


    2,823


    (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, 2022, 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, 2022 compared with the corresponding prior year period decreased our total revenues by 6

    percentage points, total operating expenses by 3 percentage points and operating income by 40 percentage points.


    (2)


    Acquisition related and other for the six months ended November 30, 2021 included the impact of litigation related charges totaling $4.7 billion.


    *


    Not meaningful



    ORACLE  CORPORATION



    Q2 FISCAL 2023 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)



    2022



    2022



    2021



    2021



    GAAP



    Non-GAAP



    GAAP



    Non-GAAP



    GAAP



    Adj.



    Non-GAAP



    GAAP



    Adj.



    Non-GAAP



    TOTAL REVENUES


    $  23,720


    $             –


    $   23,720


    $  20,087


    $            –


    $  20,087


    18 %


    18 %


    24 %


    24 %



    TOTAL OPERATING EXPENSES


    $  18,026


    $    (3,869)


    $   14,157


    $  17,485


    $   (6,586)


    $  10,899


    3 %


    30 %


    6 %


    35 %


    Stock-based compensation (3)


    1,659


    (1,659)


    –


    1,226


    (1,226)


    –


    35 %


    *


    35 %


    *


    Amortization of intangible assets (4)


    1,826


    (1,826)


    –


    603


    (603)


    –


    203 %


    *


    204 %


    *


    Acquisition related and other


    103


    (103)


    –


    4,687


    (4,687)


    –


    (98 %)


    *


    (98 %)


    *


    Restructuring


    281


    (281)


    –


    70


    (70)


    –


    301 %


    *


    340 %


    *



    OPERATING INCOME


    $     5,694


    $     3,869


    $     9,563


    $     2,602


    $    6,586


    $    9,188


    119 %


    4 %


    159 %


    11 %



    OPERATING MARGIN %


    24 %


    40 %


    13 %


    46 %


    1,105 bp.


    (543) bp.


    1,279 bp.


    (484) bp.



    INCOME TAX EFFECTS (5)


    $       (511)


    $    (1,018)


    $    (1,529)


    $          25


    $   (1,473)


    $   (1,448)


    *


    6 %


    *


    14 %



    NET INCOME


    $     3,289


    $     2,851


    $     6,140


    $     1,209


    $    5,113


    $    6,322


    172 %


    (3 %)


    289 %


    5 %



    DILUTED EARNINGS PER SHARE


    $       1.20


    $       2.24


    $       0.43


    $      2.24


    179 %


    0 %


    300 %


    8 %



    DILUTED WEIGHTED AVERAGE COMMON

    SHARES OUTSTANDING


    2,747


    –


    2,747


    2,823


    –


    2,823


    (3 %)


    (3 %)


    (3 %)


    (3 %)


    (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, 2022,

    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,

    2022


    November 30,

    2021


    GAAP


    Adj.


    Non-GAAP


    GAAP


    Adj.


    Non-GAAP


    Cloud services and license support


    $        204


    $      (204)


    $           –


    $          90


    $         (90)


    $           –


    Hardware


    9


    (9)


    –


    7


    (7)


    –


    Services


    60


    (60)


    –


    32


    (32)


    –


    Sales and marketing


    275


    (275)


    –


    215


    (215)


    –


    Research and development


    932


    (932)


    –


    767


    (767)


    –


    General and administrative


    179


    (179)


    –


    115


    (115)


    –


    Total stock-based compensation


    $     1,659


    $   (1,659)


    $           –


    $     1,226


    $   (1,226)


    $           –


    (4)


    Estimated future annual amortization expense related to intangible assets as of November 30, 2022 was as follows:


    Remainder of fiscal 2023


    $     1,755


    Fiscal 2024


    2,995


    Fiscal 2025


    2,283


    Fiscal 2026


    1,620


    Fiscal 2027


    664


    Fiscal 2028


    635


    Thereafter


    1,641


    Total intangible assets, net


    $  11,593


    (5)


    Income tax effects were calculated reflecting an effective GAAP tax rate of 13.4% and (2.1%) in the first half of fiscal 2023 and 2022, respectively, and an effective non-GAAP tax rate of

    19.9% and 18.6% in the first half of fiscal 2023 and 2022, respectively. The difference in our GAAP and non-GAAP tax rates in the first half of fiscal 2023 was primarily due to the net tax

    effects related to stock-based compensation expense and acquisition related and other items, including the tax effects on amortization of intangible assets, 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. The difference in our GAAP

    and non-GAAP tax rates in the first half of fiscal 2022 was primarily due to the net tax effects related to stock-based compensation expense and acquisition related and other items,

    including the net tax effects for litigation related charges (refer to Appendix A for additional information), and the net tax effects on amortization of intangible assets,

    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 2023 FINANCIAL RESULTS



    CONDENSED CONSOLIDATED BALANCE SHEETS



    ($ in millions)



    November 30,



    May 31,



    2022



    2022



    ASSETS



    Current Assets:


    Cash and cash equivalents


    $                 6,813


    $               21,383


    Marketable securities


    537


    519


    Trade receivables, net


    6,197


    5,953


    Prepaid expenses and other current assets


    4,014


    3,778



    Total Current Assets


    17,561


    31,633



    Non-Current Assets:


    Property, plant and equipment, net


    14,351


    9,716


    Intangible assets, net


    11,593


    1,440


    Goodwill, net


    61,513


    43,811


    Deferred tax assets


    12,091


    12,782


    Other non-current assets


    11,360


    9,915



    Total Non-Current Assets


    110,908


    77,664



    TOTAL ASSETS


    $             128,469


    $             109,297



    LIABILITIES AND STOCKHOLDERS’ DEFICIT



    Current Liabilities:


    Notes payable and other borrowings, current


    $                 9,746


    $                 3,749


    Accounts payable


    1,647


    1,317


    Accrued compensation and related benefits


    1,780


    1,944


    Deferred revenues


    8,705


    8,357


    Other current liabilities


    5,228


    4,144



    Total Current Liabilities


    27,106


    19,511



    Non-Current Liabilities:


    Notes payable and other borrowings, non-current


    81,173


    72,110


    Income taxes payable


    11,128


    12,210


    Deferred tax liabilities


    7,165


    6,031


    Other non-current liabilities


    5,673


    5,203



    Total Non-Current Liabilities


    105,139


    95,554



    Stockholders’ Deficit


    (3,776)


    (5,768)



    TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT


    $            128,469


    $            109,297



    ORACLE  CORPORATION



    Q2 FISCAL 2023 FINANCIAL RESULTS



    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



    ($ in millions)



    Six Months Ended

    November 30,



    2022



    2021



    Cash Flows From Operating Activities:


    Net income


    $        3,289


    $        1,209


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


    Depreciation


    1,138


    913


    Amortization of intangible assets


    1,826


    603


    Deferred income taxes


    (852)


    (820)


    Stock-based compensation


    1,659


    1,226


    Other, net


    289


    (176)


    Changes in operating assets and liabilities, net of effects from acquisitions:


    Decrease in trade receivables, net


    516


    789


    Decrease in prepaid expenses and other assets


    121


    263


    Decrease in accounts payable and other liabilities


    (785)


    (918)


    Decrease in income taxes payable


    (327)


    (849)


    Increase (decrease) in deferred revenues


    369


    (531)



    Net cash provided by operating activities


    7,243


    1,709



    Cash Flows From Investing Activities:


    Purchases of marketable securities and other investments


    (603)


    (9,631)


    Proceeds from sales and maturities of marketable securities and other investments


    462


    21,617


    Acquisitions, net of cash acquired


    (27,799)


    (50)


    Capital expenditures


    (4,154)


    (1,987)



    Net cash (used for) provided by investing activities


    (32,094)


    9,949



    Cash Flows From Financing Activities:


    Payments for repurchases of common stock


    (1,000)


    (15,001)


    Proceeds from issuances of common stock


    661


    305


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


    (895)


    (890)


    Payments of dividends to stockholders


    (1,723)


    (1,748)


    Proceeds from issuances of commercial paper, net of repayments


    1,880


    –


    Proceeds from issuances of senior notes and other borrowings, net of issuance costs


    28,280


    –


    Repayments of senior notes and other borrowings


    (16,692)


    (5,750)


    Other, net


    (56)


    (437)



    Net cash provided by (used for) financing activities


    10,455


    (23,521)



    Effect of exchange rate changes on cash and cash equivalents


    (174)


    (297)



    Net decrease in cash and cash equivalents


    (14,570)


    (12,160)



    Cash and cash equivalents at beginning of period


    21,383


    30,098



    Cash and cash equivalents at end of period


    $        6,813


    $      17,938



    ORACLE  CORPORATION



    Q2 FISCAL 2023 FINANCIAL RESULTS



    FREE CASH FLOW – TRAILING 4-QUARTERS (1)



    ($ in millions)



    Fiscal 2022



    Fiscal 2023



    Q1



    Q2



    Q3



    Q4



    Q1



    Q2



    Q3



    Q4



    GAAP Operating Cash Flow


    $            15,325


    $            10,255


    $            10,396


    $               9,539


    $            10,542


    $            15,073



    Capital Expenditures


    (2,761)


    (3,118)


    (3,805)


    (4,511)


    (5,168)


    (6,678)



    Free Cash Flow


    $            12,564


    $               7,137


    $               6,591


    $               5,028


    $               5,374


    $               8,395



    % Growth over prior year


    9 %


    (41 %)


    (49 %)


    (63 %)


    (57 %)


    18 %



    GAAP Net Income


    $            13,952


    $            10,262


    $               7,560


    $               6,717


    $               5,808


    $               8,797



    Free Cash Flow as a % of Net Income


    90 %


    70 %


    87 %


    75 %


    93 %


    95 %


    (1)


    To supplement our statements of cash flows presented on a GAAP basis, we use non-GAAP measures of cash flows on a trailing 4-quarter basis to analyze cash flow generated from

    operations. We believe free cash flow is also useful as one of the bases for comparing our performance with our competitors. The presentation of non-GAAP free cash flow is not meant

    to be considered in isolation or as an alternative to net income as an indicator of our performance, or as an alternative to cash flows from operating activities as a measure of liquidity.



    ORACLE  CORPORATION



    Q2 FISCAL 2023 FINANCIAL RESULTS



    SUPPLEMENTAL ANALYSIS OF GAAP REVENUES (1)



    ($ in millions)



    Fiscal 2022



    Fiscal 2023



    Q1



    Q2



    Q3



    Q4



    TOTAL



    Q1



    Q2



    Q3



    Q4



    TOTAL




    REVENUES BY OFFERINGS


    Cloud services


    $    2,461


    $    2,667


    $    2,791


    $    2,890


    $   10,809


    $    3,579


    $    3,813


    $      7,392


    License support


    4,910


    4,887


    4,846


    4,722


    19,365


    4,838


    4,785


    9,623


    Cloud services and license support


    7,371


    7,554


    7,637


    7,612


    30,174


    8,417


    8,598


    17,015


    Cloud license and on-premise license


    813


    1,237


    1,289


    2,539


    5,878


    904


    1,435


    2,339


    Hardware


    763


    767


    798


    856


    3,183


    763


    850


    1,613


    Services


    781


    802


    789


    833


    3,205


    1,361


    1,392


    2,753


    Total revenues


    $    9,728


    $  10,360


    $  10,513


    $  11,840


    $   42,440


    $  11,445


    $  12,275


    $    23,720



    AS REPORTED REVENUE GROWTH RATES


    Cloud services


    19 %


    22 %


    24 %


    19 %


    21 %


    45 %


    43 %


    44 %


    License support


    1 %


    (1 %)


    (3 %)


    (5 %)


    (2 %)


    (1 %)


    (2 %)


    (2 %)


    Cloud services and license support


    6 %


    6 %


    5 %


    3 %


    5 %


    14 %


    14 %


    14 %


    Cloud license and on-premise license


    (8 %)


    13 %


    1 %


    18 %


    9 %


    11 %


    16 %


    14 %


    Hardware


    (6 %)


    (9 %)


    (3 %)


    (3 %)


    (5 %)


    0 %


    11 %


    5 %


    Services


    8 %


    7 %


    7 %


    3 %


    6 %


    74 %


    74 %


    74 %


    Total revenues


    4 %


    6 %


    4 %


    5 %


    5 %


    18 %


    18 %


    18 %



    CONSTANT CURRENCY REVENUE GROWTH RATES (2)


    Cloud services


    18 %


    22 %


    26 %


    22 %


    22 %


    50 %


    48 %


    49 %


    License support


    (1 %)


    (1 %)


    0 %


    (1 %)


    (1 %)


    4 %


    4 %


    4 %


    Cloud services and license support


    5 %


    6 %


    8 %


    7 %


    6 %


    20 %


    20 %


    20 %


    Cloud license and on-premise license


    (9 %)


    16 %


    4 %


    25 %


    12 %


    19 %


    23 %


    21 %


    Hardware


    (7 %)


    (8 %)


    1 %


    2 %


    (3 %)


    5 %


    16 %


    11 %


    Services


    7 %


    7 %


    11 %


    7 %


    8 %


    84 %


    83 %


    83 %


    Total revenues


    2 %


    6 %


    7 %


    10 %


    7 %


    23 %


    25 %


    24 %




    CLOUD SERVICES AND LICENSE SUPPORT REVENUES




    BY ECOSYSTEM


    Applications cloud services and license support


    $    3,041


    $    3,149


    $    3,187


    $    3,235


    $   12,612


    $    4,016


    $    4,080


    $      8,096


    Infrastructure cloud services and license support


    4,330


    4,405


    4,450


    4,377


    17,562


    4,401


    4,518


    8,919


    Total cloud services and license support revenues


    $    7,371


    $    7,554


    $    7,637


    $    7,612


    $   30,174


    $    8,417


    $    8,598


    $    17,015



    AS REPORTED REVENUE GROWTH RATES


    Applications cloud services and license support


    8 %


    9 %


    8 %


    6 %


    8 %


    32 %


    30 %


    31 %


    Infrastructure cloud services and license support


    5 %


    5 %


    3 %


    1 %


    3 %


    2 %


    3 %


    2 %


    Total cloud services and license support revenues


    6 %


    6 %


    5 %


    3 %


    5 %


    14 %


    14 %


    14 %



    CONSTANT CURRENCY REVENUE GROWTH RATES (2)


    Applications cloud services and license support


    7 %


    8 %


    10 %


    9 %


    8 %


    37 %


    35 %


    36 %


    Infrastructure cloud services and license support


    3 %


    5 %


    7 %


    5 %


    5 %


    7 %


    9 %


    8 %


    Total cloud services and license support revenues


    5 %


    6 %


    8 %


    7 %


    6 %


    20 %


    20 %


    20 %




    GEOGRAPHIC REVENUES


    Americas


    $    5,321


    $    5,736


    $    5,849


    $    6,774


    $   23,679


    $    7,192


    $    7,786


    $   14,978


    Europe/Middle East/Africa


    2,784


    2,953


    3,014


    3,260


    12,011


    2,691


    2,895


    5,586


    Asia Pacific


    1,623


    1,671


    1,650


    1,806


    6,750


    1,562


    1,594


    3,156


    Total revenues


    $    9,728


    $  10,360


    $  10,513


    $  11,840


    $   42,440


    $  11,445


    $  12,275


    $   23,720


    (1)


    The sum of the quarterly information presented may vary from the year-to-date information presented due to rounding.


    (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, 2022 and 2021 for the fiscal 2023 and fiscal 2022 constant currency growth rate calculations presented, respectively, rather

    than the actual exchange rates in effect during the respective periods.


    APPENDIX A


    ORACLE CORPORATION



    Q2 FISCAL 2023 FINANCIAL RESULTS



    EXPLANATION OF NON-GAAP MEASURES

    To supplement our financial results presented on a GAAP basis, we use the non-GAAP measures indicated in the tables, which exclude certain business combination accounting entries and expenses related to acquisitions, as well as other significant expenses including stock-based compensation, that we believe are helpful in understanding our past financial performance and our future results. Our non-GAAP financial 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. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Compensation of our executives is based in part on the performance of our business based on these non-GAAP measures. Our non-GAAP financial measures reflect adjustments based on the following items, as well as the related income tax effects:


    • Stock-based compensation expenses

      : We have excluded the effect of stock-based compensation expenses from our non-GAAP operating expenses, income tax effects and net income measures. Although stock-based compensation is a key incentive offered to our employees, and we believe such compensation contributed to the revenues earned during the periods presented and also believe it will contribute to the generation of future period revenues, we continue to evaluate our business performance excluding stock-based compensation expenses. Stock-based compensation expenses will recur in future periods.

    • Amortization of intangible assets

      : We have excluded the effect of amortization of intangible assets from our non-GAAP operating expenses, income tax effects and net income measures. Amortization of intangible assets is inconsistent in amount and frequency and is significantly affected by the timing and size of our acquisitions. Investors should note that the use of intangible assets contributed to our revenues earned during the periods presented and will contribute to our future period revenues as well. Amortization of intangible assets will recur in future periods.

    • Acquisition related and other expenses; and restructuring expenses

      : We have excluded the effect of acquisition related and other expenses and the effect of restructuring expenses from our non-GAAP operating expenses, income tax effects and net income measures. We incurred expenses in connection with our acquisitions and also incurred certain other operating expenses or income, which we generally would not have otherwise incurred in the periods presented as a part of our continuing operations. For all periods presented, acquisition related and other expenses consisted of personnel related costs for transitional and certain other employees, certain business combination adjustments including certain adjustments after the measurement period has ended, and certain other operating items, net. For the three and six months ended

      November 30, 2021

      , acquisition related and other expenses substantially consisted of litigation related charges totaling

      $4.7 billion

      that we generally do not expect to recur, and we consider the

      $4.7 billion

      of litigation related charges to be outside our ordinary course of business based on the following considerations: (i) the unprecedented nature of the litigation related charges including the nature and size of the damages awarded; (ii) the dissimilarity of this litigation and related charges to recurring litigation of which we are a party in our normal business course for which any and all such charges are included in our GAAP operating results and non-GAAP measures; (iii) the complexity of the case; (iv) the counterparty involved; and (v) our expectation that litigation related charges of this nature will not recur in future periods; amongst other factors. Restructuring expenses consisted of employee severance and other exit costs. We believe it is useful for investors to understand the effects of these items on our total operating expenses. Although acquisition related and other expenses and restructuring expenses may diminish over time with respect to past acquisitions and/or strategic initiatives, we generally will incur certain of these expenses in connection with any future acquisitions and/or strategic initiatives.

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    December 12, 2022 – 1:05 PM PST
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