Oracle just reported its fiscal Q3 earnings and we're sifting through them now.
Oracle reported adjusted EPS $0.68, that's in-line.
Revenue: $9.3 billion, that's a miss, but mostly due to the foreign exchange rate.
Analysts were expecting EPS of $0.68 and revenue of $9.46 billion.
They also want to hear Oracle say its forth quarter will hit 94 cents EPS on revenue of $11.43 billion.
Investors are, so far, good with this report. Stock is up just a tiny bit in after-hours trading.
Oracle's fourth quarter is always traditionally its biggest, as salespeople push to close deals to make their annual quotas.
There will probably be some sort of hit from foreign currency exchange, just like nearly all the other big multinational tech companies have been hit. In December, Oracle expected that hit to be about 4 cents a share but just like many analysts predicted, it was bigger: 6%.
Oracle's cloud software and cloud revenue up is up 7%. Oracle had forecast growth in cloud at 5%-8% in constant currency, and it expected its hardware business to range anywhere from negative 2% all the way to 8%.
Oracle has been hit or miss with earnings for the past few years but it was back on the rails and riding high after its last report in December, posting better-than-expected sales and profits, and saying that Oracle's cloud was on track to be a $3 billion business this year.
Here are the relevant portions of the press release:
REDWOOD SHORES, CA--(Marketwired - Mar 17, 2015) - Oracle Corporation (NYSE: ORCL) today announced that fiscal 2015 Q3 Total Revenues were unchanged at $9.3 billion. The strengthening of the U.S. dollar compared to foreign currencies had a significant impact on results in the quarter. Without the strengthening of the U.S. dollar, Total Revenues would have been up 6% as measured in constant currency. Software and Cloud Revenues were up 1% to $7.2 billion, and up 7% in constant currency. Cloud software-as-a-service (SaaS) and platform-as-a-service (PaaS) grew 30% to $372 million, and grew 34% in constant currency. Hardware Systems Revenues were down 2% to $1.3 billion, but were up 5% in constant currency.
GAAP Operating Income was down 5% to $3.4 billion, and the GAAP operating margin was 36%. Non-GAAP Operating Income was down 4% to $4.2 billion, and the non-GAAP operating margin was 45%. Without the impact of the U.S. dollar strengthening compared to foreign currencies, GAAP Operating Income would have been up 4% and the operating margin would have been 37%, while non-GAAP Operating Income would have been up 4% and the operating margin would have been 46%. GAAP Net Income was down 3% to $2.5 billion while non-GAAP Net Income was down 1% to $3.1 billion. In constant currency, both GAAP and non-GAAP Net Income were up 7%. GAAP Earnings Per Share was $0.56, down 1%, while non-GAAP Earnings Per Share was $0.68, unchanged from last year. In constant currency, both GAAP and non-GAAP Earnings Per Share would have been up 9%.
Short-term Deferred revenue was $6.4 billion, up 6% in constant currency compared with a year ago. Operating cash flow on a trailing twelve-month basis was $14.5 billion.
"We beat the midpoint of my constant currency guidance on every single financial metric this past quarter," said Oracle CEO, Safra Catz. "EPS was up 9%, Total Revenue was up 6%, Hardware Revenues were up 5%, Software and Cloud revenues were up 7%, and Total Cloud SaaS, PaaS and IaaS revenues were up 33%. Once you normalize for exchange rates, it was a very strong growth quarter for us."
"In Q3, we sold nearly $200 million of new SaaS and PaaS business as measured in annual recurring revenue," said Oracle CEO, Mark Hurd. "In Q4, we expect to sell over $300 million of new SaaS and PaaS annual recurring revenue. That means we have a real chance to sell more SaaS and PaaS new business this coming quarter than any other cloud services provider. I think our hyper-growth in the cloud comes as a big surprise to a lot of people."
"We are well on our way to selling over $1 billion of new SaaS and PaaS business in calendar 2015," said Oracle Chairman and CTO Larry Ellison. "Salesforce.com has announced that it also expects to add about $1 billion of new SaaS and PaaS business this year. So it's going to be a close race who sells more in the cloud this year, us or them. Stay tuned."
Oracle also announced that its Board of Directors declared a quarterly cash dividend of $0.15 per share of outstanding common stock, reflecting a 25% increase over the current quarterly dividend of $0.12. Larry Ellison, Oracle's Chairman of the Board, Chief Technology Officer and largest stockholder, did not participate in the deliberation or the vote on this matter. This increased dividend will be paid to stockholders of record as of the close of business on April 7, 2015, with a payment date of April 28, 2015.
| Q3 FISCAL 2015 FINANCIAL RESULTS | |||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||
| ($ in millions, except per share data) | |||||||||||||||||
| Three Months Ended February 28, | |||||||||||||||||
| 2015 | % of Revenues | 2014 | % of Revenues | % Increase (Decrease) in US $ | % Increase (Decrease) in Constant Currency (1) | ||||||||||||
| REVENUES | |||||||||||||||||
| New software licenses | $ | 1,982 | 21% | $ | 2,128 | 23% | (7%) | 0% | |||||||||
| Cloud software-as-a-service and platform-as-a-service | 372 | 4% | 287 | 3% | 30% | 34% | |||||||||||
| Cloud infrastructure-as-a-service | 155 | 2% | 121 | 1% | 28% | 32% | |||||||||||
| Software license updates and product support | 4,661 | 50% | 4,564 | 49% | 2% | 8% | |||||||||||
| Software and Cloud Revenues | 7,170 | 77% | 7,100 | 76% | 1% | 7% | |||||||||||
| Hardware systems products | 712 | 8% | 725 | 8% | (2%) | 6% | |||||||||||
| Hardware systems support | 587 | 6% | 598 | 6% | (2%) | 4% | |||||||||||
| Hardware Systems Revenues | 1,299 | 14% | 1,323 | 14% | (2%) | 5% | |||||||||||
| Services Revenues | 858 | 9% | 884 | 10% | (3%) | 3% | |||||||||||
| Total Revenues | 9,327 | 100% | 9,307 | 100% | 0% | 6% | |||||||||||
| OPERATING EXPENSES | |||||||||||||||||
| Sales and marketing | 1,839 | 20% | 1,829 | 20% | 1% | 7% | |||||||||||
| Cloud software-as-a-service and platform-as-a-service | 203 | 2% | 112 | 1% | 81% | 87% | |||||||||||
| Cloud infrastructure-as-a-service | 88 | 1% | 76 | 1% | 16% | 19% | |||||||||||
| Software license updates and product support | 300 | 3% | 286 | 3% | 5% | 10% | |||||||||||
| Hardware systems products | 367 | 4% | 379 | 4% | (3%) | 5% | |||||||||||
| Hardware systems support | 218 | 2% | 207 | 2% | 5% | 11% | |||||||||||
| Services | 724 | 8% | 715 | 8% | 1% | 8% | |||||||||||
| Research and development | 1,370 | 15% | 1,292 | 14% | 6% | 8% | |||||||||||
| General and administrative | 252 | 3% | 251 | 3% | 0% | 4% | |||||||||||
| Amortization of intangible assets | 527 | 6% | 560 | 6% | (6%) | (6%) | |||||||||||
| Acquisition related and other | 8 | 0% | (5) | 0% | 241% | 227% | |||||||||||
| Restructuring | 48 | 0% | 38 | 0% | 28% | 43% | |||||||||||
| Total Operating Expenses | 5,944 | 64% | 5,740 | 62% | 4% | 8% | |||||||||||
| OPERATING INCOME | 3,383 | 36% | 3,567 | 38% | (5%) | 4% | |||||||||||
| Interest expense | (273) | (2%) | (228) | (2%) | 20% | 20% | |||||||||||
| Non-operating income (expense), net | 40 | 0% | (90) | (1%) | 145% | 158% | |||||||||||
| INCOME BEFORE PROVISION FOR INCOME TAXES | 3,150 | 34% | 3,249 | 35% | (3%) | 7% | |||||||||||
| Provision for income taxes | 655 | 7% | 684 | 7% | (4%) | 6% | |||||||||||
| NET INCOME | $ | 2,495 | 27% | $ | 2,565 | 28% | (3%) | 7% | |||||||||
| EARNINGS PER SHARE: | |||||||||||||||||
| Basic | $ | 0.57 | $ | 0.57 | |||||||||||||
| Diluted | $ | 0.56 | $ | 0.56 | |||||||||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | |||||||||||||||||
| Basic | 4,389 | 4,496 | |||||||||||||||
| Diluted | 4,494 | 4,575 | |||||||||||||||
