Oracle Announces Fiscal 2020 Fourth Quarter and Fiscal Full Year Financial Results

Rhea-AI Summary

Oracle Corporation announced its Q4 and full-year results for fiscal 2020, reporting total revenues of $10.4 billion in Q4, down 6% year-over-year. Cloud services and license support revenues increased 1% YoY to $6.8 billion. FY2020 total revenues were $39.1 billion, flat year-over-year. GAAP net income for Q4 reached $3.1 billion, while FY2020 was $10.1 billion. Non-GAAP EPS for Q4 was $1.20, up 3% YoY. The board declared a quarterly cash dividend of $0.24 per share.

Positive

• Non-GAAP EPS grew 5% in constant currency in Q4.
• Fusion Cloud ERP Suite revenues increased 35% in constant currency.
• Fusion Cloud HCM Suite revenues grew 29% in constant currency.
• For FY2020, Cloud services and license support revenues were up 3% YoY.

Negative

• Total quarterly revenues down 6% YoY.
• Q4 non-GAAP operating income declined 2% YoY.
• Customers in hard-hit industries postponed purchases, affecting revenue.

REDWOOD SHORES, Calif., June 16, 2020 /PRNewswire/ -- Oracle Corporation (NYSE: ORCL) today announced fiscal 2020 Q4 and fiscal 2020 full year results. Total quarterly revenues were $10.4 billion, down 6% YoY and down 4% in constant currency compared to Q4 last year. Cloud services and license support revenues were $6.8 billion, up 1% YoY and 3% in constant currency. Cloud license and on-premise license revenues were $2.0 billion.

Q4 GAAP operating income was up 1% YoY to $4.3 billion, and GAAP operating margin was 41%. Non-GAAP operating income was down 2% YoY to $5.1 billion, and non-GAAP operating margin was 49%. GAAP net income was $3.1 billion, and non-GAAP net income was $3.8 billion. GAAP earnings per share was $0.99, while non-GAAP earnings per share was up 3% YoY to $1.20.

Short-term deferred revenues were $8.0 billion. Operating cash flow was $13.1 billion during the trailing twelve months.

For fiscal 2020, total revenues were $39.1 billion, down 1% YoY and flat in constant currency. Cloud services and license support revenues were $27.4 billion, up 3% YoY and 4% in constant currency. Cloud license and on-premise license revenues were $5.1 billion.

Fiscal 2020 GAAP operating income was $13.9 billion, and GAAP operating margin was 36%. Non-GAAP operating income was $17.4 billion, and non-GAAP operating margin was 44%. GAAP net income was $10.1 billion, while non-GAAP net income was $12.7 billion. GAAP earnings per share increased 4% to $3.08, while non-GAAP earnings per share was up 9% to $3.85.

"In Q4, non-GAAP earnings per share grew 5% in constant currency driven by strong performances in both our cloud infrastructure and cloud applications businesses," said Oracle CEO, Safra Catz. "Leading the way was our Fusion Cloud ERP Suite that grew 35% in constant currency, and our Fusion Cloud HCM Suite grew 29% in constant currency. Our overall business did remarkably well considering the pandemic, but our results would have been even better except for customers in the hardest-hit industries that we serve such as hospitality, retail, and transportation postponing some of their purchases. Still, for the third year in a row, we delivered double-digit constant currency earnings per share growth in FY20."

"In Q4, we launched a vastly improved version of our Exadata Cloud@Customer service," said Oracle Chairman and CTO, Larry Ellison. "Exadata Cloud@Customer now enables our existing on-premise database customers to run the Oracle Autonomous Database in their own datacenter; previously, the Oracle Autonomous Database was only available in Oracle's Gen2 Public Cloud.  Enabling all our on-premise database customers to upgrade and run Oracle's latest and best database technology in their own data center should dramatically accelerate the rate of adoption of the Oracle Autonomous Database…especially by our largest customers including banks and governments that are not currently planning to move their largest and most critical systems to a public cloud."

The board of directors declared a quarterly cash dividend of $0.24 per share of outstanding common stock. This dividend will be paid to stockholders of record as of the close of business on July 15, 2020, with a payment date of July 28, 2020.

Q4 Fiscal 2020 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, please visit the Oracle Investor Relations website at http://www.oracle.com/investor. In addition, Oracle's Q4 results and fiscal 2020 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, Passcode: 1424537.

About Oracle

The Oracle Cloud offers a complete suite of integrated applications for Sales, Service, Marketing, Human Resources, Finance, Supply Chain and Manufacturing, plus Highly-Automated and Secure Generation 2 Infrastructure featuring the Oracle Autonomous Database. For more information about Oracle (NYSE:ORCL), visit us at 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 the rate of adoption of our Autonomous Database, 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) The COVID-19 pandemic has affected how we and our customers are operating our respective businesses, and the duration and extent to which this will impact our future results of operations and our overall financial performance remains uncertain. (2) Our success depends upon our ability to develop new products and services, integrate acquired products and services and enhance our existing products and services. (3) Our cloud strategy, including our Oracle Software-as-a-Service and Infrastructure-as-a-Service offerings, may adversely affect our revenues and profitability. (4) We might experience significant coding, manufacturing or configuration errors in our cloud, license and hardware offerings. (5) If the security measures for our products and services are compromised and as a result, our customers' data or our IT systems are accessed improperly, made unavailable, or improperly modified, our products and services may be perceived as vulnerable, our brand and reputation could be damaged, the IT services we provide to our customers could be disrupted, and customers may stop using our products and services, all of which could reduce our revenue and earnings, increase our expenses and expose us to legal claims and regulatory actions. (6) Our business practices with respect to data could give rise to operational interruption, liabilities or reputational harm as a result of governmental regulation, legal requirements or industry standards relating to consumer privacy and data protection. (7) 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. (8) Our international sales and operations subject us to additional risks that can adversely affect our operating results. (9) Acquisitions present many risks and we may not achieve the financial and strategic goals that were contemplated at the time of a transaction. 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 http://www.oracle.com/investor. All information set forth in this press release is current as of June 16, 2020. Oracle undertakes no duty to update any statement in light of new information or future events.

 

ORACLE  CORPORATION Q4 FISCAL 2020 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
		2020	Revenues	2019	Revenues	in US $	Currency (1)
REVENUES
	Cloud services and license support	$              6,845	66%	$              6,799	61%	1%	3%
	Cloud license and on-premise license	1,959	19%	2,520	23%	(22%)	(21%)
	Hardware	901	8%	994	9%	(9%)	(7%)
	Services	735	7%	823	7%	(11%)	(8%)
	Total revenues	10,440	100%	11,136	100%	(6%)	(4%)
OPERATING EXPENSES
	Cloud services and license support	1,012	10%	975	9%	4%	6%
	Hardware	288	3%	362	3%	(20%)	(19%)
	Services	669	6%	726	7%	(8%)	(5%)
	Sales and marketing	1,959	19%	2,318	21%	(15%)	(13%)
	Research and development	1,479	14%	1,562	14%	(5%)	(4%)
	General and administrative	278	3%	329	3%	(16%)	(13%)
	Amortization of intangible assets	366	3%	424	4%	(14%)	(13%)
	Acquisition related and other	11	0%	15	0%	(23%)	(18%)
	Restructuring	69	1%	168	1%	(59%)	(58%)
	Total operating expenses	6,131	59%	6,879	62%	(11%)	(9%)
OPERATING INCOME	4,309	41%	4,257	38%	1%	3%
	Interest expense	(580)	(6%)	(525)	(4%)	10%	10%
	Non-operating income, net	(33)	0%	134	1%	(125%)	(123%)
INCOME BEFORE PROVISION FOR INCOME TAXES	3,696	35%	3,866	35%	(4%)	(2%)
	Provision for income taxes	580	5%	126	1%	361%	374%
NET INCOME	$              3,116	30%	$              3,740	34%	(17%)	(14%)
EARNINGS PER SHARE:
	Basic	$                1.01		$                1.10
	Diluted	$                0.99		$                1.07
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
	Basic	3,091		3,389
	Diluted	3,162		3,495
(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, 2019, 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, 2020 compared with the corresponding prior year period decreased our revenues by 2 percentage points, operating expenses by 2 percentage points and operating income by 2 percentage points.

 

ORACLE  CORPORATION
Q4 FISCAL 2020 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)
			2020				2020			2019				2019		GAAP	Non-GAAP	GAAP	Non-GAAP
			GAAP		Adj.		Non-GAAP			GAAP		Adj.		Non-GAAP
TOTAL REVENUES		$     10,440		$               1		$     10,441			$     11,136		$               3		$     11,139		(6%)	(6%)	(4%)	(4%)
	Cloud services and license support		6,845		1		6,846			6,799		3		6,802		1%	1%	3%	3%
TOTAL OPERATING EXPENSES

FAQ

What were Oracle's Q4 fiscal 2020 earnings results?

Oracle reported Q4 revenues of $10.4 billion, down 6% YoY, with GAAP net income of $3.1 billion and a non-GAAP EPS of $1.20.

How did Oracle perform in fiscal 2020?

In fiscal 2020, Oracle recorded total revenues of $39.1 billion, flat YoY, with GAAP net income of $10.1 billion and non-GAAP EPS of $3.85.

What is Oracle's cloud services revenue trend?

Cloud services and license support revenues reached $27.4 billion for FY2020, up 3% YoY.

What impact did the pandemic have on Oracle's results?

Oracle's results were impacted by postponed purchases from customers in hard-hit industries like hospitality and retail.

What dividend did Oracle declare?

Oracle declared a quarterly cash dividend of $0.24 per share, payable on July 28, 2020.