REDWOOD SHORES, CA — (Marketwired) — 06/16/16 — Oracle Corporation (NYSE: ORCL) today announced fiscal 2016 Q4 results. Total Q4 Revenues were $10.6 billion, down 1% in U.S. dollars and flat in constant currency. Cloud plus On-Premise Software Revenues were $8.4 billion, flat in U.S. dollars and up 2% in constant currency. Cloud software as a service (SaaS) and platform as a service (PaaS) revenues were $690 million, up 66% in U.S. dollars and up 68% in constant currency. Total Cloud revenues, including infrastructure as a service (IaaS), were $859 million, up 49% in U.S. dollars and up 51% in constant currency. Operating Income was $4.0 billion, and Operating Margin was 37%. Non-GAAP Operating Income was $4.8 billion, and the non-GAAP Operating Margin was 45%. Net Income was $2.8 billion while non-GAAP Net Income was $3.4 billion. Earnings Per Share was $0.66, while non-GAAP Earnings Per Share was $0.81. Without the impact of the U.S. dollar strengthening compared to foreign currencies, Oracle–s reported GAAP Earnings Per Share would have been 2 cents higher and non-GAAP Earnings Per Share would have been 1 cent higher.
Short-term deferred revenues were $7.7 billion, up 6% in U.S. dollars and up 7% in constant currency compared with a year ago. Operating cash flow on a trailing twelve-month basis was $13.6 billion.
For fiscal 2016, Total Revenues were $37.0 billion, down 3% in U.S. dollars and up 2% in constant currency. Cloud plus On-Premise Software Revenues were $29.0 billion, down 2% in U.S. dollars and up 3% in constant currency. Cloud SaaS and PaaS revenues were $2.2 billion, up 49% in U.S. dollars and up 52% in constant currency. Total Cloud revenues, including IaaS, were $2.9 billion, up 36% in U.S. dollars and up 40% in constant currency. Operating Income was $12.6 billion, and Operating Margin was 34%. Non-GAAP Operating Income was $15.8 billion and non-GAAP Operating Margin was 43%. Net Income was $8.9 billion while non-GAAP Net Income was $11.2 billion. Earnings Per Share was $2.07, while Non-GAAP Earnings Per Share was $2.61. Without the impact of the U.S. dollar strengthening compared to foreign currencies, Oracle–s reported GAAP and non-GAAP Earnings Per Share would have been 17 cents higher.
“Fourth quarter SaaS and PaaS revenue growth accelerated to 68% in constant currency, significantly higher than my guidance,” said Oracle CEO, Safra Catz. “SaaS and PaaS gross margins continued to improve throughout the year, exiting FY16 at 56%. Bookings in Q4 were also very strong enabling us to raise our guidance for Q1 SaaS and PaaS revenue growth, which we now expect to be between 75% and 80%.”
“We added more than 1,600 new SaaS customers and more than 2,000 new PaaS customers in Q4,” said Oracle CEO, Mark Hurd. “In Fusion ERP alone, we added more than 800 new cloud customers. Today, Oracle has nearly 2,600 Fusion ERP customers in the Oracle Public Cloud — that–s ten-times more cloud ERP customers than Workday.”
“We expect that the SaaS and PaaS hyper-growth we experienced in FY16 will continue on for the next few years,” said Oracle Executive Chairman and CTO, Larry Ellison. “That gives us a fighting chance to be the first cloud company to reach $10 billion in SaaS and PaaS revenue. We–re also very excited about the availability of version 2 of Oracle–s Infrastructure as a Service (IaaS) — which will enable us to speed up the growth of our IaaS business, which customers want to buy in conjunction with our SaaS and PaaS.”
The Board of Directors also declared a quarterly cash dividend of $0.15 per share of outstanding common stock. This dividend will be paid to stockholders of record as of the close of business on July 6, 2016, with a payment date of July 27, 2016.
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 . In addition, Oracle–s Q4 results and fiscal 2016 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: 28515799.
Oracle offers a comprehensive and fully integrated stack of cloud applications and platform services. For more information about Oracle (NYSE: ORCL), visit or contact Investor Relations at or (650) 506-4073.
Oracle and Java are registered trademarks of Oracle and/or its affiliates. Other names may be trademarks of their respective owners.
Statements in this press release relating to Oracle–s future plans, expectations, beliefs, intentions and prospects, including statements regarding our future guidance, and expectations of future SaaS, PaaS and IaaS growth, 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, or to enhance and improve our products and support services in a timely manner or to position and/or price our products and services to meet market demand, customers may not buy new software licenses, cloud software subscriptions or hardware systems products or purchase or renew support contracts. (3) If the security measures for our software, hardware, services or Oracle Cloud offerings are compromised or if such offerings contain significant coding, manufacturing or configuration errors, we may experience reputational harm, legal claims and financial exposure. (4) 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. (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) Economic, geopolitical and market conditions, including the continued slow economic recovery in the U.S. and other parts of the world, 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. (7) 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. 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 Corporation–s Investor Relations Department at (650) 506-4073 or by clicking on SEC Filings on Oracle–s Investor Relations website at . All information set forth in this press release is current as of June 16, 2016. Oracle undertakes no duty to update any statement in light of new information or future events.
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:
Cloud software as a service and platform as a service, software license updates and product support and hardware support deferred revenues: Business combination accounting rules require us to account for the fair values of cloud software as a service and platform as a service contracts, software license updates and product support contracts and hardware support contracts assumed in connection with our acquisitions. Because these contracts are generally one year in duration, our GAAP revenues generally for the one year period subsequent to our acquisition of a business do not reflect the full amount of revenues on these assumed cloud and support contracts that would have otherwise been recorded by the acquired entity. The non-GAAP adjustment to our cloud software as a service and platform as a service revenues, software license updates and product support revenues and hardware support revenues is intended to include, and thus reflect, the full amount of such revenues. We believe the adjustment to these revenues is useful to investors as a measure of the ongoing performance of our business. We have historically experienced high renewal rates on our software license updates and product support contracts and our objective is to increase the renewal rates on acquired and new cloud software as a service and platform as a service and hardware support contracts; however, we cannot be certain that our customers will renew our cloud software as a service and platform as a service contracts, software license updates and product support contracts or our hardware support contracts.
Stock-based compensation expenses: We have excluded the effect of stock-based compensation expenses from our non-GAAP operating expenses 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 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 and net income measures. We incurred significant 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. Acquisition related and other expenses consist of personnel related costs for transitional employees, other acquired employee related costs, stock-based compensation expenses (in addition to the stock-based compensation expenses described above), integration related professional services, certain business combination adjustments including adjustments after the measurement period has ended and certain other operating items, net. Substantially all of the stock-based compensation expenses included in acquisition related and other expenses resulted from unvested options assumed in acquisitions whose vesting was fully accelerated upon termination of the employees pursuant to the original terms of those options. Restructuring expenses consist 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 expenses and restructuring expenses generally diminish over time with respect to past acquisitions, we generally will incur these expenses in connection with any future acquisitions.
Contact:
Ken Bond
Oracle Investor Relations
1.650.607.0349
Deborah Hellinger
Oracle Corporate Communications
1.212.508.7935
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