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Oracle Announces Fiscal 2024 First Quarter Financial Results

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Oracle Corporation announces Q1 2024 results with total revenue of $12.5 billion, up 9% in USD. Cloud revenue grows by 30% to $4.6 billion. Non-GAAP earnings per share increase by 14% to $1.19. Q1 operating cash flow rises by 9% to $7.0 billion. Quarterly dividend declared at $0.40 per share.
Positive
  • Total revenue increases by 9% to $12.5 billion
  • Cloud revenue grows by 30% to $4.6 billion
  • Non-GAAP earnings per share increase by 14% to $1.19
  • Operating cash flow rises by 9% to $7.0 billion
  • Quarterly dividend declared at $0.40 per share
Negative
  • Cloud license and on-premise license revenues decline by 10% to $0.8 billion
  • Q1 GAAP Earnings per Share $0.86, Non-GAAP Earnings per Share $1.19
  • Q1 Total Revenue $12.5 billion, up 9% in USD, up 8% in constant currency
  • Q1 Cloud Revenue (IaaS plus SaaS) $4.6 billion, up 30% in USD, up 29% in constant currency
  • Q1 Cloud Infrastructure (IaaS) Revenue $1.5 billion, up 66% in USD, up 64% in constant currency
  • Q1 Cloud Application (SaaS) Revenue $3.1 billion, up 17% in USD, up 17% in constant currency
  • Q1 Fusion Cloud ERP (SaaS) Revenue $0.8 billion, up 21% in USD, up 20% in constant currency
  • Q1 NetSuite Cloud ERP (SaaS) Revenue $0.7 billion, up 21% in USD, up 21% in constant currency

AUSTIN, Texas, Sept. 11, 2023 /PRNewswire/ -- Oracle Corporation (NYSE: ORCL) today announced fiscal 2024 Q1 results. Total quarterly revenues were up 9% year-over-year in USD and up 8% in constant currency to $12.5 billion. Cloud services and license support revenues were up 13% in USD and up 12% in constant currency to $9.5 billion. Cloud license and on-premise license revenues were down 10% in USD and down 11% in constant currency to $0.8 billion.           

Q1 GAAP operating income was $3.3 billion. Non-GAAP operating income was $5.1 billion, up 13% in USD and up 12% in constant currency. GAAP operating margin was 26%, and non-GAAP operating margin was 41%. GAAP net income was $2.4 billion. Non-GAAP net income was $3.4 billion, up 19% in USD and up 17% in constant currency. Q1 GAAP earnings per share was $0.86 while non-GAAP earnings per share was $1.19, up 16% in USD and up 14% in constant currency.

Short-term deferred revenues were $11.1 billion. Q1 operating cash flow was $7.0 billion, up 9%, and Q1 free cash flow was $5.7 billion, up 21%.

"Oracle Cloud Infrastructure revenue grew 66% in Q1, much faster than our hyperscale cloud infrastructure competitors," said Oracle CEO, Safra Catz. "Total cloud services revenue, Infrastructure plus Applications, grew 30% to $4.6 billion in the quarter. Oracle Cloud Services plus License Support revenue now accounts for 77% of Oracle's total revenue. This highly-predictable, highly-profitable recurring revenue stream—combined with continued expense discipline—drove 16% growth in non-GAAP earnings per share, 21% growth in free cash flow, and $7.0 billion in operating cash flow in the Q1."

"Is Generative AI the most important new computer technology ever? Maybe!," said Oracle Chairman and CTO, Larry Ellison. "Self-driving cars, molecular drug design, voice user interfaces—billions of dollars are being invested in AI. As of today, AI development companies have signed contracts to purchase more than $4 billion of capacity in Oracle's Gen2 Cloud. That's twice as much as we had booked at the end of Q4. The largest AI technology companies and the leading AI startups continue to expand their business with Oracle for one simple reason—Oracle's RDMA interconnected NVIDIA Superclusters train AI models at twice the speed and less than half the cost of other clouds."

The board of directors declared a quarterly cash dividend of $0.40 per share of outstanding common stock. This dividend will be paid to stockholders of record as of the close of business on October 12, 2023, with a payment date of October 26, 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, MySQL and NetSuite are registered trademarks of Oracle Corporation. NetSuite was the first cloud company—ushering in the new era of cloud computing.

"Safe Harbor" Statement: Statements in this press release relating to the predictability and profitability of Oracle Cloud Services plus License Support revenue and the importance of Generative AI, 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; our management of complex cloud and hardware offerings, including the sourcing of technologies and technology components; significant coding, manufacturing or configuration errors in our offerings; risks associated with acquisitions;  economic, political and market conditions; information technology system failures, privacy and data security concerns; 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 September 11, 2023. Oracle undertakes no duty to update any statement in light of new information or future events.

 

ORACLE CORPORATION










Q1 FISCAL 2024 FINANCIAL RESULTS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in millions, except per share data)












Three Months Ended August 31,


% Increase




% Increase

(Decrease)





% of


% of

(Decrease)

in Constant




2023

Revenues

2022

Revenues

in US $

Currency (1)


REVENUES









Cloud services and license support

$           9,547

77 %

$           8,417

73 %

13 %

12 %



Cloud license and on-premise license

809

6 %

904

8 %

(10 %)

(11 %)



Hardware

714

6 %

763

7 %

(6 %)

(8 %)



Services

1,383

11 %

1,361

12 %

2 %

1 %



      Total revenues

12,453

100 %

11,445

100 %

9 %

8 %


OPERATING EXPENSES









Cloud services and license support

2,179

18 %

1,735

15 %

26 %

25 %



Hardware

219

2 %

249

2 %

(12 %)

(14 %)



Services

1,212

10 %

1,053

9 %

15 %

14 %



Sales and marketing

2,026

16 %

2,177

19 %

(7 %)

(8 %)



Research and development

2,216

18 %

2,093

19 %

6 %

6 %



General and administrative

393

3 %

411

4 %

(4 %)

(5 %)



Amortization of intangible assets

763

6 %

919

8 %

(17 %)

(17 %)



Acquisition related and other

11

0 %

41

0 %

(72 %)

(72 %)



Restructuring

138

1 %

144

1 %

(4 %)

(1 %)



      Total operating expenses

9,157

74 %

8,822

77 %

4 %

3 %


OPERATING INCOME

3,296

26 %

2,623

23 %

26 %

23 %



Interest expense

(872)

(7 %)

(787)

(7 %)

11 %

11 %



Non-operating expenses, net

(49)

0 %

(180)

(1 %)

(73 %)

(74 %)


INCOME BEFORE INCOME TAXES

2,375

19 %

1,656

15 %

43 %

39 %



Benefit from (provision for) income taxes

45

0 %

(108)

(1 %)

*

*


NET INCOME

$           2,420

19 %

$           1,548

14 %

56 %

52 %











EARNINGS PER SHARE:









Basic

$              0.89


$              0.58






Diluted

$              0.86


$              0.56





WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:









Basic

2,728


2,685






Diluted

2,823


2,747


















































(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, 2023, 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 August 31, 2023 compared with the corresponding prior year period increased our total revenues by 1 percentage point, total operating expenses by 1 percentage point and operating income by 3 percentage points.


*

Not meaningful








 

ORACLE CORPORATION






















Q1 FISCAL 2024 FINANCIAL RESULTS

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

($ in millions, except per share data)

























Three Months Ended August 31,


% Increase
(Decrease)
in US $

% Increase
(Decrease) in
Constant Currency (2)




2023




2023



2022




2022


GAAP

Non-GAAP

GAAP

Non-GAAP





GAAP


Adj.


Non-GAAP



GAAP


Adj.


Non-GAAP
























TOTAL REVENUES


$  12,453


$           -


$  12,453



$  11,445


$           -


$  11,445


9 %

9 %

8 %

8 %























TOTAL OPERATING EXPENSES


$     9,157


$   (1,761)


$     7,396



$     8,822


$   (1,854)


$     6,968


4 %

6 %

3 %

5 %



     Stock-based compensation (3)


849


(849)


-



750


(750)


-


13 %

*

13 %

*



     Amortization of intangible assets (4)


763


(763)


-



919


(919)


-


(17 %)

*

(17 %)

*



     Acquisition related and other


11


(11)


-



41


(41)


-


(72 %)

*

(72 %)

*



     Restructuring


138


(138)


-



144


(144)


-


(4 %)

*

(1 %)

*


OPERATING INCOME


$     3,296


$     1,761


$     5,057



$     2,623


$     1,854


$     4,477


26 %

13 %

23 %

12 %


OPERATING MARGIN %


26 %




41 %



23 %




39 %


355 bp.

150 bp.

327 bp.

140 bp.


INCOME TAX EFFECTS (5)


$          45


$      (823)


$      (778)



$      (108)


$      (574)


$      (682)


*

14 %

*

13 %


NET INCOME


$     2,420


$        938


$     3,358



$     1,548


$     1,280


$     2,828


56 %

19 %

52 %

17 %


DILUTED EARNINGS PER SHARE


$       0.86




$       1.19



$       0.56




$       1.03


52 %

16 %

48 %

14 %


DILUTED WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING


2,823


-


2,823



2,747


-


2,747


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, 2023, 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










August 31,
 2023



August 31,
 2022










GAAP


Adj.


Non-GAAP



GAAP


Adj.


Non-GAAP








     Cloud services and license support


$        111


$      (111)


$           -



$          91


$         (91)


$           -








     Hardware


5


(5)


-



4


(4)


-








     Services


34


(34)


-



25


(25)


-








     Sales and marketing


135


(135)


-



124


(124)


-








     Research and development


484


(484)


-



422


(422)


-








     General and administrative


80


(80)


-



84


(84)


-








           Total stock-based compensation


$        849


$      (849)


$           -



$        750


$      (750)


$           -




























(4)

Estimated future annual amortization expense related to intangible assets as of August 31, 2023 was as follows:



     Remainder of fiscal 2024


$     2,231



















     Fiscal 2025


2,283



















     Fiscal 2026


1,620



















     Fiscal 2027


664



















     Fiscal 2028


635



















     Fiscal 2029


561



















     Thereafter


1,080



















           Total intangible assets, net


$     9,074







































(5)

Income tax effects were calculated reflecting an effective GAAP tax rate of (1.9%) and 6.5% in the first quarter of fiscal 2024 and 2023, respectively, and an effective non-GAAP tax rate of 18.8% and 19.4% in the first quarter of fiscal 2024 and 2023, respectively. The difference in our GAAP and non-GAAP tax rates in each of the first quarter of fiscal 2024 and 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 and restructuring expense, 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








Q1 FISCAL 2024 FINANCIAL RESULTS

CONDENSED CONSOLIDATED BALANCE SHEETS

($ in millions)











August 31,

May 31,




2023

2023

ASSETS





Current Assets:






Cash and cash equivalents

$               11,613


$                 9,765



Marketable securities

470


422



Trade receivables, net

6,519


6,915



Prepaid expenses and other current assets

3,564


3,902




     Total Current Assets

22,166


21,004


Non-Current Assets:






   Property, plant and equipment, net

17,644


17,069



   Intangible assets, net

9,074


9,837



   Goodwill, net

62,206


62,261



   Deferred tax assets

12,243


12,226



   Other non-current assets

13,329


11,987




     Total Non-Current Assets

114,496


113,380


TOTAL ASSETS

$            136,662


$            134,384


LIABILITIES AND STOCKHOLDERS' EQUITY





Current Liabilities:






Notes payable and other borrowings, current

$                 4,499


$                 4,061



Accounts payable

1,034


1,204



Accrued compensation and related benefits

1,818


2,053



Deferred revenues

11,120


8,970



Other current liabilities

6,886


6,802




     Total Current Liabilities

25,357


23,090


Non-Current Liabilities:






Notes payable and other borrowings, non-current

84,442


86,420



Income taxes payable

11,201


11,077



Deferred tax liabilities

5,281


5,772



Other non-current liabilities

7,540


6,469




     Total Non-Current Liabilities

108,464


109,738


Stockholders' Equity

2,841


1,556


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$            136,662


$            134,384









 

     ORACLE CORPORATION







Q1 FISCAL 2024 FINANCIAL RESULTS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


($ in millions)










Three Months Ended August 31,



2023

2022

Cash Flows From Operating Activities:





Net income

$        2,420


$        1,548


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





Depreciation

712


547


Amortization of intangible assets

763


919


Deferred income taxes

(517)


(344)


Stock-based compensation

849


750


Other, net

169


156


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





Decrease in trade receivables, net

380


761


Decrease in prepaid expenses and other assets

269


44


Decrease in accounts payable and other liabilities

(457)


(166)


Increase in income taxes payable

69


145


Increase in deferred revenues

2,317


2,034


Net cash provided by operating activities

6,974


6,394


Cash Flows From Investing Activities:





Purchases of marketable securities and other investments

(333)


(57)


Proceeds from sales and maturities of marketable securities and other investments

85


138


Acquisitions, net of cash acquired

-


(27,798)


Capital expenditures

(1,314)


(1,719)


Net cash used for investing activities

(1,562)


(29,436)


Cash Flows From Financing Activities:





Payments for repurchases of common stock

(150)


(552)


Proceeds from issuances of common stock

308


515


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

(1,060)


(829)


Payments of dividends to stockholders

(1,091)


(860)


Repayments of commercial paper

(562)


-


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

-


20,046


Repayments of senior notes and other borrowings

(1,000)


(5,883)


Other, net

27


(127)


Net cash (used for) provided by financing activities

(3,528)


12,310


Effect of exchange rate changes on cash and cash equivalents

(36)


(203)


Net increase (decrease) in cash and cash equivalents

1,848


(10,935)


Cash and cash equivalents at beginning of period

9,765


21,383


Cash and cash equivalents at end of period

$      11,613


$      10,448








 

ORACLE  CORPORATION

 Q1 FISCAL 2024 FINANCIAL RESULTS

 FREE CASH FLOW - TRAILING 4-QUARTERS (1)

 ($ in millions)














 Fiscal 2023

 Fiscal 2024




 Q1

 Q2

 Q3

 Q4

 Q1

 Q2

 Q3

 Q4












GAAP Operating Cash Flow

$            10,542

$            15,073

$            15,503

$            17,165

$            17,745
















Capital Expenditures

(5,168)

(6,678)

(8,205)

(8,695)

(8,290)
















Free Cash Flow

$               5,374

$               8,395

$               7,298

$               8,470

$               9,455
















Operating Cash Flow % Growth over prior year

(31 %)

47 %

49 %

80 %

68 %
















Free Cash Flow % Growth over prior year

(57 %)

18 %

11 %

68 %

76 %



























GAAP Net Income

$               5,808

$               8,797

$               8,373

$               8,503

$               9,375
















Operating Cash Flow as a % of Net Income

182 %

171 %

185 %

202 %

189 %
















Free Cash Flow as a % of Net Income

93 %

95 %

87 %

100 %

101 %



























(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


 Q1 FISCAL 2024 FINANCIAL RESULTS


 SUPPLEMENTAL ANALYSIS OF GAAP REVENUES (1)


 ($ in millions)




















 Fiscal 2023






 Fiscal 2024




 Q1

 Q2

 Q3

 Q4

 TOTAL


 Q1

 Q2

 Q3

 Q4

 TOTAL



REVENUES BY OFFERINGS














 Cloud services

$    3,579

$    3,813

$    4,053

$    4,437

$   15,881


$    4,635




$      4,635



 License support

4,838

4,785

4,870

4,933

19,426


4,912




4,912



 Cloud services and license support

8,417

8,598

8,923

9,370

35,307


9,547




9,547



 Cloud license and on-premise license

904

1,435

1,288

2,152

5,779


809




809



 Hardware

763

850

811

850

3,274


714




714



 Services 

1,361

1,392

1,376

1,465

5,594


1,383




1,383



                Total revenues


$  11,445

$  12,275

$  12,398

$  13,837

$   49,954


$  12,453




$   12,453


















AS REPORTED REVENUE GROWTH RATES














Cloud services

45 %

43 %

45 %

54 %

47 %


30 %




30 %



License support

(1 %)

(2 %)

0 %

4 %

0 %


2 %




2 %



 Cloud services and license support

14 %

14 %

17 %

23 %

17 %


13 %




13 %



 Cloud license and on-premise license

11 %

16 %

0 %

(15 %)

(2 %)


(10 %)




(10 %)



 Hardware

0 %

11 %

2 %

(1 %)

3 %


(6 %)




(6 %)



 Services 

74 %

74 %

74 %

76 %

75 %


2 %




2 %



               Total revenues


18 %

18 %

18 %

17 %

18 %


9 %




9 %


















CONSTANT CURRENCY REVENUE GROWTH RATES (2)














Cloud services

50 %

48 %

48 %

55 %

50 %


29 %




29 %



License support

4 %

4 %

3 %

6 %

4 %


0 %




0 %



 Cloud services and license support 

20 %

20 %

20 %

25 %

21 %


12 %




12 %



 Cloud license and on-premise license

19 %

23 %

4 %

(14 %)

2 %


(11 %)




(11 %)



 Hardware 

5 %

16 %

4 %

1 %

6 %


(8 %)




(8 %)



 Services 

84 %

83 %

80 %

78 %

81 %


1 %




1 %



               Total revenues


23 %

25 %

21 %

18 %

22 %


8 %




8 %


















CLOUD SERVICES AND LICENSE SUPPORT REVENUES















BY ECOSYSTEM














 Applications cloud services and license support

$    4,016

$    4,080

$    4,166

$    4,390

$   16,651


$    4,471




$      4,471



 Infrastructure cloud services and license support

4,401

4,518

4,757

4,980

18,656


5,076




5,076



          Total cloud services and license support revenues


$    8,417

$    8,598

$    8,923

$    9,370

$   35,307


$    9,547




$      9,547


















AS REPORTED REVENUE GROWTH RATES














 Applications cloud services and license support

32 %

30 %

31 %

36 %

32 %


11 %




11 %



 Infrastructure cloud services and license support

2 %

3 %

7 %

14 %

6 %


15 %




15 %



          Total cloud services and license support revenues


14 %

14 %

17 %

23 %

17 %


13 %




13 %


















CONSTANT CURRENCY REVENUE GROWTH RATES (2)














 Applications cloud services and license support

37 %

35 %

33 %

37 %

35 %


11 %




11 %



 Infrastructure cloud services and license support

7 %

9 %

10 %

15 %

10 %


14 %




14 %



          Total cloud services and license support revenues


20 %

20 %

20 %

25 %

21 %


12 %




12 %


















GEOGRAPHIC REVENUES














 Americas


$    7,192

$    7,786

$    7,671

$    8,577

$   31,226


$    7,841




$      7,841



 Europe/Middle East/Africa


2,691

2,895

3,067

3,457

12,109


3,005




3,005



 Asia Pacific


1,562

1,594

1,660

1,803

6,619


1,607




1,607



          Total revenues


$  11,445

$  12,275

$  12,398

$  13,837

$   49,954


$  12,453




$   12,453

































(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, 2023 and 2022 for the fiscal 2024 and fiscal 2023 constant currency growth rate calculations
      presented, respectively, rather than the actual exchange rates in effect during the respective periods.





















 

APPENDIX A

ORACLE CORPORATION
Q1 FISCAL 2024 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. 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. 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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