Oracle Announces Fiscal 2021 Third Quarter Financial Results

Oracle Corporation (NYSE: ORCL) today announced fiscal 2021 Q3 results. Total quarterly revenues were up 3% year-over-year to $10.1 billion. Cloud services and license support revenues were up 5% to $7.3 billion. Cloud license and on-premise license revenues were up 4% to $1.3 billion.

Q3 GAAP operating income was up 10% to $3.9 billion and GAAP operating margin was 38%. Non-GAAP operating income was up 10% to $4.8 billion and non-GAAP operating margin was 47%. GAAP net income was up 95% to $5.0 billion, and GAAP earnings per share was up 113% to $1.68. The GAAP income statement was impacted by a one-time net tax benefit totaling $2.3 billion related to the transfer of certain assets between subsidiaries. Non-GAAP net income was up 10% to $3.5 billion, and non-GAAP earnings per share was up 20% to $1.16.

Short-term deferred revenues were $8.1 billion. Operating cash flow was $14.7 billion during the trailing twelve months.

“We continued to extend our huge lead in the cloud ERP market as Fusion ERP grew 30% and NetSuite ERP grew 24% in Q3,” said Oracle CEO, Safra Catz. “Oracle’s rapidly growing highly-profitable, multi-billion dollar cloud ERP businesses helped drive subscription revenue up 5% and operating income up 10% in the quarter. Subscription revenue now accounts for 72% of Oracle’s total revenues, and this highly-predictable recurring revenue-stream along with expense discipline are enabling double-digit increases in non-GAAP earnings per share.”

“Once again in Q3, Oracle’s Gen2 Cloud Infrastructure business added customers, and grew revenue at a rate in excess of 100%,” said Oracle Chairman and CTO, Larry Ellison. “We are opening new regions as fast as we can to support our rapidly growing multi-billion dollar infrastructure business. On the applications front, analysts continue to rank Oracle the clear number one in cloud ERP, and this quarter Oracle signed contracts totaling hundreds of millions of dollars to migrate several more large companies from SAP ERP to Oracle Fusion ERP.”

The Board of Directors increased the authorization for share repurchases by $20 billion. Oracle also announced that its Board of Directors declared a quarterly cash dividend of $0.32 per share of outstanding common stock, reflecting a 33% increase over the current quarterly dividend of $0.24. Larry Ellison, Oracle’s Chairman of the Board of Directors, Chief Technology Officer and largest stockholder, did not participate in the deliberation, or the vote on this matter. This increased dividend will be paid to stockholders of record as of the close of business on April 8, 2021, with a payment date of April 22, 2021.

Technical Innovations

• Oracle expanded its Cloud portfolio with Oracle Roving Edge Infrastructure to enable secure, scalable cloud services wherever customers need them, even in the most remote areas of the world.
• Oracle developed and delivered a cloud based National Electronic Health Records (EHR) Database plus a suite of Public Health Management Applications to help U.S. public health agencies and healthcare providers collect and analyze data related to COVID-19.
• Oracle launched Oracle Database 21c with more than 200 new features that reinforce the strength of Oracle’s converged database strategy.
• Oracle Autonomous Database scored the highest in all four Use Cases in the 2020 Gartner “Critical Capabilities for Cloud Database Management Systems for Operational Use Cases” report.
• A more complete list of recent technical innovations and announcements is available at www.oracle.com/news.

Customer Momentum

• Australian Data Centres - To provide high security data center services to Australia’s federal government, major telecommunication companies, and businesses, Australian Data Centres needs secure and scalable computing power, and they need it inside the country’s borders. They chose Oracle Dedicated Region Cloud@Customer to provide that cloud computing power, since it provides all the services and advantages of Oracle Cloud but lets Australian Data Centres put that capacity in an in-country location of their choice.
• Denver Public Schools - With the city’s population growing nearly 20% since 2010, Denver Public Schools saw an unprecedented expansion of programs in serving more than 90,000 students in 207 schools. To replace an Infor Lawson system, the Denver Public Schools’ leadership considered Infor, Oracle, and SAP systems. The District chose Oracle Fusion Cloud ERP, HCM and EPM to help them streamline and automate back-office business processes, model and plan across finance and HR, control costs, and drive better decisions.
• Bed Bath & Beyond - A North American retailer that sells a wide assortment of home, baby, beauty, and wellness merchandise online and in stores. The company selected Oracle Retail solutions and Oracle Fusion Cloud ERP for the capability to provide decision-makers with an end-to-end view of financials through merchandising, resulting in better supply chain and store inventory management.
• AxiomSL - A global leader in risk analytics, data management, and regulatory reporting solutions, leverages the Oracle Autonomous Database to handle critical workloads for its RegCloud® offering. Autonomous Database has facilitated significant performance gains for AxiomSL over its prior solution when testing more than 160 million rows. The power of Autonomous Database enables AxiomSL to move existing customers to the cloud and expand its client base.
• A more complete list of customers which purchased Oracle Cloud services during the quarter will be available at www.oracle.com/customers/earnings.

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.

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About Oracle

The Oracle Cloud offers complete suites of integrated applications plus 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.

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“Safe Harbor” Statement

Statements in this press release relating to Oracle's future plans, expectations, beliefs, intentions and prospects, including statements regarding future growth in our cloud ERP and infrastructure businesses, as well as growth in our subscription revenue, 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 Cloud 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 data, 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 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) If we are unable to compete effectively, the results of operations and prospects for our business could be harmed. (9) Our international sales and operations subject us to additional risks that can adversely affect our operating results. (10) 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 March 10, 2021. Oracle undertakes no duty to update any statement in light of new information or future events.