Oracle : Second Quarter 2025 Earnings Release

ORCL

Contact:

Ken Bond

Deborah Hellinger

Oracle Investor Relations

Oracle Corporate Communications

1.650.607.0349

1.212.508.7935

ken.bond@oracle.com

deborah.hellinger@oracle.com

Oracle Announces Fiscal 2025 Second Quarter Financial Results

AUSTIN, Texas, December 9, 2024 -- Oracle Corporation (NYSE: ORCL) today announced fiscal 2025 Q2 results. Total quarterly revenues were up 9% year-over-year, in both USD and constant currency, to $14.1 billion. Cloud services and license support revenues were up 12% year- over-year, in both USD and constant currency, to $10.8 billion. Cloud license and on-premise license revenues were up 1% in USD and up 3% in constant currency, to $1.2 billion.

Q2 GAAP operating income was $4.2 billion. Non-GAAP operating income was $6.1 billion, up 10% in both USD and constant currency. GAAP operating margin was 30%, and non-GAAP operating margin was 43%. GAAP net income was $3.2 billion. Non-GAAP net income was $4.2 billion, up 12% in both USD and constant currency. Q2 GAAP earnings per share was $1.10, up 24% in USD and up 23% in constant currency, while non-GAAP earnings per share was $1.47, up 10% in both USD and constant currency.

Short-term deferred revenues were $9.4 billion. Over the last twelve months, operating cash flow was $20.3 billion and free cash flow was $9.5 billion.

"Record level AI demand drove Oracle Cloud Infrastructure revenue up 52% in Q2, a much higher growth rate than any of our hyperscale cloud infrastructure competitors," said Oracle CEO, Safra Catz. "Growth in the AI segment of our Infrastructure business was extraordinary-GPU

consumption was up 336% in the quarter-and we delivered the world's largest and fastest AI SuperComputer scaling up to 65,000 NVIDIA H200 GPUs. With our remaining performance obligation (RPO) up 50% to $97 billion, we believe our already impressive growth rates will continue to climb even higher. This fiscal year, total Oracle Cloud revenue should top $25 billion."

"Oracle Cloud Infrastructure trains several of the world's most important generative AI models because we are faster and less expensive than other clouds," said Oracle Chairman and CTO, Larry Ellison. "And we just signed an agreement with Meta-for them to use Oracle's AI Cloud Infrastructure-and collaborate with Oracle on the development of AI Agents based on Meta's Llama models. The Oracle Cloud trains dozens of specialized AI models and embeds hundreds of AI Agents in cloud applications. For example, Oracle's AI Agents automate drug design, image and genomic analysis for cancer diagnostics, audio updates to electronic health records for patient care, satellite image analysis to predict and improve agricultural output, fraud and money laundering detection, dual-factor biometric computer logins, and real time video weapons detection in schools. Oracle trained AI models and AI Agents will improve the rate of scientific discovery, economic development and corporate growth throughout the world. The scale of the opportunity is unimaginable."

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 January 9, 2025, with a payment date of January 23, 2025.

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 future plans, expectations, beliefs, intentions and prospects, including the expectations for converting the Remaining Performance Obligations to revenue, future total Oracle Cloud revenue this fiscal year and the scale of opportunity for Oracle trained AI models and AI Agents, 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, including our AI products; our management of complex cloud and hardware offerings, including the sourcing of technologies and technology components; our ability to secure data center capacity; 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 December 9, 2024. Oracle undertakes no duty to update any statement in light of new information or future events.

ORACLE CORPORATION

Q2 FISCAL 2025 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

2024

Revenues

2023

Revenues

in US $

Currency (1)

REVENUES

Cloud services and license support

$

10,806

77%

$

9,639

74%

12%

12%

Cloud license and on-premise license

1,195

9%

1,178

9%

1%

3%

Hardware

728

5%

756

6%

(4%)

(3%)

Services

1,330

9%

1,368

11%

(3%)

(3%)

Total revenues

14,059

100%

12,941

100%

9%

9%

OPERATING EXPENSES

Cloud services and license support

2,746

19%

2,274

17%

21%

21%

Hardware

172

1%

213

2%

(20%)

(19%)

Services

1,167

8%

1,253

10%

(7%)

(7%)

Sales and marketing

2,190

16%

2,093

16%

5%

5%

Research and development

2,471

18%

2,226

17%

11%

11%

General and administrative

387

3%

375

3%

3%

3%

Amortization of intangible assets

591

4%

755

6%

(22%)

(22%)

Acquisition related and other

31

0%

47

0%

(34%)

(33%)

Restructuring

84

1%

83

1%

0%

1%

Total operating expenses

9,839

70%

9,319

72%

6%

6%

OPERATING INCOME

4,220

30%

3,622

28%

17%

16%

Interest expense

(866)

(6%)

(888)

(7%)

(3%)

(3%)

Non-operating income (expenses), net

36

0%

(14)

0%

*

*

INCOME BEFORE INCOME TAXES

3,390

24%

2,720

21%

25%

24%

Provision for income taxes

239

2%

217

2%

11%

10%

NET INCOME

$

3,151

22%

$

2,503

19%

26%

26%

EARNINGS PER SHARE:

Basic

$

1.13

$

0.91

Diluted

$

1.10

$

0.89

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Basic

2,790

2,746

Diluted

2,869

2,817

2024 compared with the corresponding prior year period increased our operating income by 1 percentage point.

1

ORACLE CORPORATION

Q2 FISCAL 2025 FINANCIAL RESULTS

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

($ in millions, except per share data)

% Increase (Decrease)

% Increase (Decrease) in

Three Months Ended November 30,

in US $

Constant Currency (2)

2024

2024

2023

2023

GAAP

Non-GAAP

GAAP

Non-GAAP

GAAP

Adj.

Non-GAAP

GAAP

Adj.

Non-GAAP

TOTAL REVENUES

$

14,059

$

-

$

14,059

$

12,941

$

-

$

12,941

9%

9%

9%

9%

TOTAL OPERATING EXPENSES

$

9,839

$

(1,876)

$

7,963

$

9,319

$

(1,914)

$

7,405

6%

8%

6%

8%

Stock-based compensation (3)

1,170

(1,170)

-

1,029

(1,029)

-

14%

*

14%

*

Amortization of intangible assets (4)

591

(591)

-

755

(755)

-

(22%)

*

(22%)

*

Acquisition related and other

31

(31)

-

47

(47)

-

(34%)

*

(33%)

*

Restructuring

84

(84)

-

83

(83)

-

0%

*

1%

*

OPERATING INCOME

$

4,220

$

1,876

$

6,096

$

3,622

$

1,914

$

5,536

17%

10%

16%

10%

OPERATING MARGIN %

30%

43%

28%

43%

203 bp.

58 bp.

196 bp.

52 bp.

INCOME TAX EFFECTS (5)

$

239

$

820

$

1,059

$

217

$

655

$

872

11%

22%

10%

21%

NET INCOME

$

3,151

$

1,056

$

4,207

$

2,503

$

1,259

$

3,762

26%

12%

26%

12%

DILUTED EARNINGS PER SHARE

$

1.10

$

1.47

$

0.89

$

1.34

24%

10%

23%

10%

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

2,869

-

2,869

2,817

-

2,817

2%

2%

2%

2%

Three Months Ended

Three Months Ended

November 30, 2024

November 30, 2023

GAAP

Adj.

Non-GAAP

GAAP

Adj.

Non-GAAP

Cloud services and license support

$

158

$

(158)

$

-

$

137

$

(137)

$

-

Hardware

8

(8)

-

6

(6)

-

Services

53

(53)

-

45

(45)

-

Sales and marketing

195

(195)

-

174

(174)

-

Research and development

657

(657)

-

573

(573)

-

General and administrative

99

(99)

-

94

(94)

-

Total stock-based compensation

$

1,170

$

(1,170)

$

-

$

1,029

$

(1,029)

$

-

(4) Estimated future annual amortization expense related to intangible assets as of November 30, 2024 was as follows:

Remainder of fiscal 2025

$

1,092

Fiscal 2026

1,639

Fiscal 2027

672

Fiscal 2028

635

Fiscal 2029

561

Fiscal 2030

522

Thereafter

558

Total intangible assets, net

$

5,679

* Not meaningful

2

ORACLE CORPORATION

Q2 FISCAL 2025 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

2024

Revenues

2023

Revenues

in US $

Currency (1)

REVENUES

Cloud services and license support

$

21,324

78%

$

19,186

75%

11%

11%

Cloud license and on-premise license

2,065

8%

1,987

8%

4%

5%

Hardware

1,383

5%

1,470

6%

(6%)

(5%)

Services

2,594

9%

2,751

11%

(6%)

(5%)

Total revenues

27,366

100%

25,394

100%

8%

8%

OPERATING EXPENSES

Cloud services and license support

5,344

20%

4,452

18%

20%

20%

Hardware

333

1%

432

2%

(23%)

(22%)

Services

2,314

8%

2,465

10%

(6%)

(6%)

Sales and marketing

4,226

15%

4,118

16%

3%

3%

Research and development

4,777

18%

4,442

17%

8%

8%

General and administrative

745

3%

769

3%

(3%)

(3%)

Amortization of intangible assets

1,215

4%

1,518

6%

(20%)

(20%)

Acquisition related and other

44

0%

58

0%

(25%)

(25%)

Restructuring

157

1%

222

1%

(29%)

(29%)

Total operating expenses

19,155

70%

18,476

73%

4%

4%

OPERATING INCOME

8,211

30%

6,918

27%

19%

19%

Interest expense

(1,708)

(6%)

(1,760)

(7%)

(3%)

(3%)

Non-operating income (expenses), net

57

0%

(63)

0%

*

*

INCOME BEFORE INCOME TAXES

6,560

24%

5,095

20%

29%

30%

Provision for income taxes

480

2%

172

1%

179%

181%

NET INCOME

$

6,080

22%

$

4,923

19%

24%

24%

EARNINGS PER SHARE:

Basic

$

2.19

$

1.80

Diluted

$

2.13

$

1.75

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Basic

2,775

2,737

Diluted

2,860

2,820

* Not meaningful

3

ORACLE CORPORATION

Q2 FISCAL 2025 YEAR TO DATE FINANCIAL RESULTS

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

($ in millions, except per share data)

% Increase (Decrease)

% Increase (Decrease) in

Six Months Ended November 30,

in US $

Constant Currency (2)

2024

2024

2023

2023

GAAP

Adj.

Non-GAAP

GAAP

Adj.

Non-GAAP

GAAP

Non-GAAP

GAAP

Non-GAAP

TOTAL REVENUES

$

27,366

$

-

$

27,366

$

25,394

$

-

$

25,394

8%

8%

8%

8%

TOTAL OPERATING EXPENSES

$

19,155

$

(3,592)

$

15,563

$

18,476

$

(3,676)

$

14,800

4%

5%

4%

6%

Stock-based compensation (3)

2,176

(2,176)

-

1,878

(1,878)

-

16%

*

16%

*

Amortization of intangible assets (4)

1,215

(1,215)

-

1,518

(1,518)

-

(20%)

*

(20%)

*

Acquisition related and other

44

(44)

-

58

(58)

-

(25%)

*

(25%)

*

Restructuring

157

(157)

-

222

(222)

-

(29%)

*

(29%)

*

OPERATING INCOME

$

8,211

$

3,592

$

11,803

$

6,918

$

3,676

$

10,594

19%

11%

19%

12%

OPERATING MARGIN %

30%

43%

27%

42%

276 bp.

141 bp.

279 bp.

140 bp.

INCOME TAX EFFECTS (5)

$

480

$

1,500

$

1,980

$

172

$

1,478

$

1,650

179%

20%

181%

21%

NET INCOME

$

6,080

$

2,092

$

8,172

$

4,923

$

2,198

$

7,121

24%

15%

24%

15%

DILUTED EARNINGS PER SHARE

$

2.13

$

2.86

$

1.75

$

2.53

22%

13%

23%

14%

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

2,860

-

2,860

2,820

-

2,820

1%

1%

1%

1%

Six Months Ended

Six Months Ended

November 30, 2024

November 30, 2023

GAAP

Adj.

Non-GAAP

GAAP

Adj.

Non-GAAP

Cloud services and license support

$

299

$

(299)

$

-

$

248

$

(248)

$

-

Hardware

14

(14)

-

11

(11)

-

Services

96

(96)

-

78

(78)

-

Sales and marketing

356

(356)

-

309

(309)

-

Research and development

1,226

(1,226)

-

1,057

(1,057)

-

General and administrative

185

(185)

-

175

(175)

-

Total stock-based compensation

$

2,176

$

(2,176)

$

-

$

1,878

$

(1,878)

$

-

(4) Estimated future annual amortization expense related to intangible assets as of November 30, 2024 was as follows:

Remainder of fiscal 2025

$

1,092

Fiscal 2026

1,639

Fiscal 2027

672

Fiscal 2028

635

Fiscal 2029

561

Fiscal 2030

522

Thereafter

558

Total intangible assets, net

$

5,679

* Not meaningful

4

ORACLE CORPORATION

Q2 FISCAL 2025 FINANCIAL RESULTS

CONDENSED CONSOLIDATED BALANCE SHEETS

($ in millions)

November 30,

May 31,

2024

2024

ASSETS

Current Assets:

Cash and cash equivalents

$

10,941

$

10,454

Marketable securities

370

207

Trade receivables, net

8,177

7,874

Prepaid expenses and other current assets

4,015

4,019

Total Current Assets

23,503

22,554

Non-Current Assets:

Property, plant and equipment, net

26,432

21,536

Intangible assets, net

5,679

6,890

Goodwill, net

62,204

62,230

Deferred tax assets

11,984

12,273

Other non-current assets

18,681

15,493

Total Non-Current Assets

124,980

118,422

TOTAL ASSETS

$

148,483

$

140,976

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

Notes payable and other borrowings, current

$

8,162

$

10,605

Accounts payable

2,679

2,357

Accrued compensation and related benefits

1,653

1,916

Deferred revenues

9,430

9,313

Other current liabilities

7,128

7,353

Total Current Liabilities

29,052

31,544

Non-Current Liabilities:

Notes payable and other borrowings, non-current

80,462

76,264

Income taxes payable

9,553

10,817

Deferred tax liabilities

2,864

3,692

Other non-current liabilities

12,316

9,420

Total Non-Current Liabilities

105,195

100,193

Stockholders' Equity

14,236

9,239

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

148,483

$

140,976

5

ORACLE CORPORATION

Q2 FISCAL 2025 FINANCIAL RESULTS CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

($ in millions)

Six Months Ended November 30,

2024

2023

Cash Flows From Operating Activities:

Net income

$

6,080

$

4,923

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

Depreciation

1,712

1,510

Amortization of intangible assets

1,215

1,518

Deferred income taxes

(601)

(1,049)

Stock-based compensation

2,176

1,878

Other, net

298

331

Changes in operating assets and liabilities:

(Increase) decrease in trade receivables, net

(451)

145

Decrease in prepaid expenses and other assets

676

301

Decrease in accounts payable and other liabilities

(1,143)

(1,048)

Decrease in income taxes payable

(1,685)

(1,541)

Increase in deferred revenues

454

149

Net cash provided by operating activities

8,731

7,117

Cash Flows From Investing Activities:

Purchases of marketable securities and other investments

(636)

(515)

Proceeds from sales and maturities of marketable securities and other investments

356

157

Acquisitions, net of cash acquired

-

(59)

Capital expenditures

(6,273)

(2,394)

Net cash used for investing activities

(6,553)

(2,811)

Cash Flows From Financing Activities:

Payments for repurchases of common stock

(300)

(600)

Proceeds from issuances of common stock

307

426

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

(898)

(1,733)

Payments of dividends to stockholders

(2,221)

(2,190)

(Repayments of) proceeds from issuances of commercial paper, net

(396)

1,749

Proceeds from issuances of senior notes and term loan credit agreements, net of issuance co

11,837

-

Repayments of senior notes and term loan credit agreements

(9,700)

(3,500)

Other, net

(276)

31

Net cash used for financing activities

(1,647)

(5,817)

Effect of exchange rate changes on cash and cash equivalents

(44)

(10)

Net increase (decrease) in cash and cash equivalents

487

(1,521)

Cash and cash equivalents at beginning of period

10,454

9,765

Cash and cash equivalents at end of period

$

10,941

$

8,244

6

ORACLE CORPORATION

Q2 FISCAL 2025 FINANCIAL RESULTS

FREE CASH FLOW - TRAILING 4-QUARTERS (1)

($ in millions)

Fiscal 2024

Fiscal 2025

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

GAAP Operating Cash Flow

$

17,745

$

17,039

$

18,239

$

18,673

$

19,126

$

20,287

Capital Expenditures

(8,290)

(6,935)

(5,981)

(6,866)

(7,855)

(10,745)

Free Cash Flow

$

9,455

$

10,104

$

12,258

$

11,807

$

11,271

$

9,542

Operating Cash Flow % Growth over prior year

68%

13%

18%

9%

8%

19%

Free Cash Flow % Growth over prior year

76%

20%

68%

39%

19%

(6%)

GAAP Net Income

$

9,375

$

10,137

$

10,642

$

10,467

$

10,976

$

11,624

Operating Cash Flow as a % of Net Income

189%

168%

171%

178%

174%

175%

Free Cash Flow as a % of Net Income

101%

100%

115%

113%

103%

82%

7

Disclaimer

Oracle Corporation published this content on December 09, 2024, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on December 09, 2024 at 21:27:48.127.