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

•

Q3 FY2021 GAAP EPS up 113% to $1.68, Non-GAAP EPS up 20% to $1.16

•

Oracle Gen2 Cloud Infrastructure, including Autonomous Database revenue up over 100%

•

Fusion Cloud ERP revenue up 30%, NetSuite Cloud ERP revenue up 24%

•

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.

•

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.

Three Months Ended

% Increase

% Increase

(Decrease)

February 28,

2021

% of

Revenues

February 29,

2020

% of

Revenues

(Decrease)

in US $

in Constant

Currency (1)

REVENUES

Cloud services and license support

$

7,252

72%

$

6,930

71%

5%

2%

Cloud license and on-premise license

1,276

13%

1,231

12%

4%

0%

Hardware

820

8%

857

9%

(4%)

(6%)

Services

737

7%

778

8%

(5%)

(8%)

Total revenues

10,085

100%

9,796

100%

3%

0%

OPERATING EXPENSES

Cloud services and license support

1,064

11%

991

10%

7%

6%

Hardware

230

2%

271

3%

(15%)

(16%)

Services

621

6%

702

7%

(12%)

(14%)

Sales and marketing

1,915

19%

2,049

21%

(7%)

(8%)

Research and development

1,621

16%

1,500

15%

8%

8%

General and administrative

330

3%

288

3%

15%

14%

Amortization of intangible assets

347

4%

400

4%

(13%)

(14%)

Acquisition related and other

13

0%

7

0%

92%

91%

Restructuring

66

1%

60

1%

10%

1%

Total operating expenses

6,207

62%

6,268

64%

(1%)

(2%)

OPERATING INCOME

3,878

38%

3,528

36%

10%

5%

Interest expense

(585

)

(6%)

(456

)

(5%)

28%

28%

Non-operating (expenses) income, net

(17

)

0%

4

0%

*

*

INCOME BEFORE BENEFIT FROM (PROVISION FOR) INCOME TAXES

3,276

32%

3,076

31%

7%

2%

Benefit from (provision for) income taxes

1,745

18%

(505

)

(5%)

*

*

NET INCOME

$

5,021

50%

$

2,571

26%

95%

87%

EARNINGS PER SHARE:

Basic

$

1.72

$

0.81

Diluted

$

1.68

$

0.79

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Basic

2,913

3,190

Diluted

2,994

3,271

(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, 2020, 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 February 28, 2021 compared with the corresponding prior year period increased our revenues by 3 percentage points, operating expenses by 1 percentage point and operating income by 5 percentage points.

*

Not meaningful

Three months ended

% Increase (Decrease)

in US $

% Increase (Decrease) in

Constant Currency (2)

February 28,

2021

GAAP

Adj.

February 28,

2021

Non-GAAP

February 29,

2020

GAAP

Adj.

February 29,

2020

Non-GAAP

GAAP

Non-GAAP

GAAP

Non-GAAP

TOTAL REVENUES

$

10,085

$

1

$

10,086

$

9,796

$

1

$

9,797

3%

3%

0%

0%

Cloud services and license support

7,252

1

7,253

6,930

1

6,931

5%

5%

2%

2%

TOTAL OPERATING EXPENSES

$

6,207

$

(905

)

$

5,302

$

6,268

$

(828

)

$

5,440

(1%)

(3%)

(2%)

(4%)

Stock-based compensation (3)

479

(479

)

—

361

(361

)

—

33%

*

33%

*

Amortization of intangible assets (4)

347

(347

)

—

400

(400

)

—

(13%)

*

(14%)

*

Acquisition related and other

13

(13

)

—

7

(7

)

—

92%

*

91%

*

Restructuring

66

(66

)

—

60

(60

)

—

10%

*

1%

*

OPERATING INCOME

$

3,878

$

906

$

4,784

$

3,528

$

829

$

4,357

10%

10%

5%

6%

OPERATING MARGIN %

38%

47%

36%

44%

244 bp.

297 bp.

179 bp.

247 bp.

INCOME TAX EFFECTS (5)

$

1,745

$

(2,442

)

$

(697

)

$

(505

)

$

(240

)

$

(745

)

*

(6%)

*

(10%)

NET INCOME

$

5,021

$

(1,536

)

$

3,485

$

2,571

$

589

$

3,160

95%

10%

87%

6%

DILUTED EARNINGS PER SHARE

$

1.68

$

1.16

$

0.79

$

0.97

113%

20%

104%

16%

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

2,994

—

2,994

3,271

—

3,271

(8%)

(8%)

(8%)

(8%)

(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, 2020, 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

February 28, 2021

Three Months Ended

February 29, 2020

GAAP

Adj.

Non-GAAP

GAAP

Adj.

Non-GAAP

Cloud services and license support

$

33

$

(33

)

$

—

$

22

$

(22

)

$

—

Hardware

2

(2

)

—

3

(3

)

—

Services

15

(15

)

—

14

(14

)

—

Sales and marketing

82

(82

)

—

67

(67

)

—

Research and development

307

(307

)

—

238

(238

)

—

General and administrative

40

(40

)

—

17

(17

)

—

Total stock-based compensation

$

479

$

(479

)

$

—

$

361

$

(361

)

$

—

(4)

Estimated future annual amortization expense related to intangible assets as of February 28, 2021 was as follows:

Remainder of fiscal 2021

$

328

Fiscal 2022

1,120

Fiscal 2023

696

Fiscal 2024

450

Fiscal 2025

126

Fiscal 2026

24

Thereafter

10

Total intangible assets, net

$

2,754

(5)

Income tax effects were calculated reflecting an effective GAAP tax rate of (53.3%) and 16.4% in the third quarter of fiscal 2021 and 2020, respectively, and an effective non-GAAP tax rate of 16.7% and 19.1% in the third quarter of fiscal 2021 and 2020, respectively. The difference in our GAAP and non-GAAP tax rates in the third quarter of fiscal 2021 was primarily due to a net tax benefit of $2.3 billion related to the partial realignment of our legal entity structure (refer to Appendix A for additional information), the net tax effects on stock-based compensation expense, and the net tax effects related to acquisition related items, including the net tax effects on amortization of intangible assets. The difference in our GAAP and non-GAAP tax rates in the third quarter of fiscal 2020 was primarily due to the net tax effects on stock-based compensation expense and the net tax effects on acquisition related items, including the tax effects on amortization of intangible assets.

*

Not meaningful

Nine Months Ended

% Increase

% Increase

(Decrease)

February 28,

2021

% of

Revenues

February 29,

2020

% of

Revenues

(Decrease)

in US $

in Constant

Currency (1)

REVENUES

Cloud services and license support

$

21,311

73%

$

20,546

72%

4%

3%

Cloud license and on-premise license

3,254

11%

3,169

11%

3%

1%

Hardware

2,478

8%

2,542

9%

(3%)

(3%)

Services

2,209

8%

2,372

8%

(7%)

(8%)

Total revenues

29,252

100%

28,629

100%

2%

1%

OPERATING EXPENSES

Cloud services and license support

3,139

11%

2,994

11%

5%

4%

Hardware

719

2%

828

3%

(13%)

(13%)

Services

1,875

6%

2,147

8%

(13%)

(14%)

Sales and marketing

5,605

19%

6,135

21%

(9%)

(9%)

Research and development

4,812

17%

4,588

16%

5%

5%

General and administrative

949

3%

903

3%

5%

5%

Amortization of intangible assets

1,037

4%

1,221

4%

(15%)

(15%)

Acquisition related and other

107

1%

44

0%

144%

145%

Restructuring

337

1%

181

1%

87%

82%

Total operating expenses

18,580

64%

19,041

67%

(2%)

(3%)

OPERATING INCOME

10,672

36%

9,588

33%

11%

9%

Interest expense

(1,799

)

(6%)

(1,416

)

(5%)

27%

27%

Non-operating (expenses) income, net

(30

)

0%

195

1%

*

*

INCOME BEFORE BENEFIT FROM (PROVISION FOR) INCOME TAXES

8,843

30%

8,367

29%

6%

3%

Benefit from (provision for) income taxes

871

3%

(1,348

)

(4%)

*

*

NET INCOME

$

9,714

33%

$

7,019

25%

38%

34%

EARNINGS PER SHARE:

Basic

$

3.26

$

2.16

Diluted

$

3.19

$

2.10

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Basic

2,977

3,251

Diluted

3,049

3,337

(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, 2020, 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 nine months ended February 28, 2021 compared with the corresponding prior year period increased our revenues by 1 percentage point, operating expenses by 1 percentage point and operating income by 2 percentage points.

*

Not meaningful

Nine Months Ended

% Increase (Decrease)

in US $

% Increase  (Decrease) in

Constant Currency (2)

February 28,

2021

GAAP

Adj.

February 28,

2021

Non-GAAP

February 29,

2020

GAAP

Adj.

February 29,

2020

Non-GAAP

GAAP

Non-GAAP

GAAP

Non-GAAP

TOTAL REVENUES

$

29,252

$

2

$

29,254

$

28,629

$

3

$

28,632

2%

2%

1%

1%

Cloud services and license support

21,311

2

21,313

20,546

3

20,549

4%

4%

3%

3%

TOTAL OPERATING EXPENSES

$

18,580

$

(2,876

)

$

15,704

$

19,041

$

(2,650

)

$

16,391

(2%)

(4%)

(3%)

(5%)

Stock-based compensation (3)

1,395

(1,395

)

—

1,204

(1,204

)

—

16%

*

16%

*

Amortization of intangible assets (4)

1,037

(1,037

)

—

1,221

(1,221

)

—

(15%)

*

(15%)

*

Acquisition related and other

107

(107

)

—

44

(44

)

—

144%

*

145%

*

Restructuring

337

(337

)

—

181

(181

)

—

87%

*

82%

*

OPERATING INCOME

$

10,672

$

2,878

$

13,550

$

9,588

$

2,653

$

12,241

11%

11%

9%

9%

OPERATING MARGIN %

36%

46%

33%

43%

299 bp.

357 bp.

257 bp.

322 bp.

INCOME TAX EFFECTS (5)

$

871

$

(2,990

)

$

(2,119

)

$

(1,348

)

$

(769

)

$

(2,117

)

*

0%

*

(2%)

NET INCOME

$

9,714

$

(112

)

$

9,602

$

7,019

$

1,884

$

8,903

38%

8%

34%

6%

DILUTED EARNINGS PER SHARE

$

3.19

$

3.15

$

2.10

$

2.67

51%

18%

48%

16%

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

3,049

—

3,049

3,337

—

3,337

(9%)

(9%)

(9%)

(9%)

(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, 2020, 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:

Nine Months Ended

February 28, 2021

Nine Months Ended

February 29, 2020

GAAP

Adj.

Non-GAAP

GAAP

Adj.

Non-GAAP

Cloud services and license support

$

99

$

(99

)

$

—

$

83

$

(83

)

$

—

Hardware

8

(8

)

—

8

(8

)

—

Services

41

(41

)

—

42

(42

)

—

Sales and marketing

233

(233

)

—

192

(192

)

—

Research and development

897

(897

)

—

781

(781

)

—

General and administrative

117

(117

)

—

98

(98

)

—

Total stock-based compensation

$

1,395

$

(1,395

)

$

—

$

1,204

$

(1,204

)

$

—

(4)

Estimated future annual amortization expense related to intangible assets as of February 28, 2021 was as follows:

Remainder of fiscal 2021

$

328

Fiscal 2022

1,120

Fiscal 2023

696

Fiscal 2024

450

Fiscal 2025

126

Fiscal 2026

24

Thereafter

10

Total intangible assets, net

$

2,754

(5)

Income tax effects were calculated reflecting an effective GAAP tax rate of (9.8%) and 16.1% in the first nine months of fiscal 2021 and 2020, respectively, and an effective non-GAAP tax rate of 18.1% and 19.2% in the first nine months of fiscal 2021 and 2020, respectively. The difference in our GAAP and non-GAAP tax rates for the first nine months of fiscal 2021 was primarily due to a net tax benefit of $2.3 billion related to the partial realignment of our legal entity structure (refer to Appendix A for additional information), the net tax effects on stock-based compensation expense, and the net tax effects related to acquisition related items, including the net tax effects on amortization of intangible assets. The difference in our GAAP and non-GAAP tax rates in the first nine months of fiscal 2020 was primarily due to the net tax effects on stock-based compensation expense and the net tax effects on acquisition related items, including the tax effects on amortization of intangible assets.

*

Not meaningful

February 28,

2021

May 31,

2020

ASSETS

Current Assets:

Cash and cash equivalents

$

22,321

$

37,239

Marketable securities

13,543

5,818

Trade receivables, net

4,637

5,551

Prepaid expenses and other current assets

3,243

3,532

Total Current Assets

43,744

52,140

Non-Current Assets:

Property, plant and equipment, net

6,816

6,244

Intangible assets, net

2,754

3,738

Goodwill, net

43,954

43,769

Deferred tax assets

13,725

3,252

Other non-current assets

7,116

6,295

Total Non-Current Assets

74,365

63,298

TOTAL ASSETS

$

118,109

$

115,438

LIABILITIES AND EQUITY

Current Liabilities:

Notes payable, current

$

5,758

$

2,371

Accounts payable

812

637

Accrued compensation and related benefits

1,684

1,453

Deferred revenues

8,088

8,002

Other current liabilities

3,908

4,737

Total Current Liabilities

20,250

17,200

Non-Current Liabilities:

Notes payable and other borrowings, non-current

63,541

69,226

Income taxes payable

12,316

12,463

Deferred tax liabilities

7,892

41

Other non-current liabilities

4,473

3,791

Total Non-Current Liabilities

88,222

85,521

Equity

9,637

12,717

TOTAL LIABILITIES AND EQUITY

$

118,109

$

115,438

Nine Months Ended

February 28,

2021

February 29,

2020

Cash Flows From Operating Activities:

Net income

$

9,714

$

7,019

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

Depreciation

1,127

1,025

Amortization of intangible assets

1,037

1,221

Deferred income taxes

(2,475

)

(398

)

Stock-based compensation

1,395

1,204

Other, net

227

167

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

Decrease in trade receivables, net

1,089

946

Decrease in prepaid expenses and other assets

609

718

Decrease in accounts payable and other liabilities

(247

)

(1,035

)

Decrease in income taxes payable

(1,181

)

(789

)

Decrease in deferred revenues

(250

)

(553

)

Net cash provided by operating activities

11,045

9,525

Cash Flows From Investing Activities:

Purchases of marketable securities and other investments

(26,775

)

(399

)

Proceeds from maturities of marketable securities and other investments

18,182

3,165

Proceeds from sales of marketable securities

853

12,575

Acquisitions, net of cash acquired

(29

)

(111

)

Capital expenditures

(1,418

)

(1,131

)

Net cash (used for) provided by investing activities

(9,187

)

14,099

Cash Flows From Financing Activities:

Payments for repurchases of common stock

(12,958

)

(13,935

)

Proceeds from issuances of common stock

915

1,232

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

(597

)

(624

)

Payments of dividends to stockholders

(2,146

)

(2,330

)

Repayments of borrowings

(2,631

)

(4,500

)

Other, net

241

(108

)

Net cash used for financing activities

(17,176

)

(20,265

)

Effect of exchange rate changes on cash and cash equivalents

400

(44

)

Net (decrease) increase in cash and cash equivalents

(14,918

)

3,315

Cash and cash equivalents at beginning of period

37,239

20,514

Cash and cash equivalents at end of period

$

22,321

$

23,829

Fiscal 2020

Fiscal 2021

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

GAAP Operating Cash Flow

$

13,829

$

13,796

$

13,947

$

13,139

$

13,092

$

13,967

$

14,659

Capital Expenditures

(1,663

)

(1,591

)

(1,544

)

(1,564

)

(1,614

)

(1,833

)

(1,851

)

Free Cash Flow

$

12,166

$

12,205

$

12,403

$

11,575

$

11,478

$

12,134

$

12,808

% Growth over prior year

(12%)

(11%)

(6%)

(10%)

(6%)

(1%)

3%

GAAP Net Income

$

10,955

$

10,933

$

10,759

$

10,135

$

10,249

$

10,380

$

12,830

Free Cash Flow as a % of Net Income

111%

112%

115%

114%

112%

117%

100%

(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.

Fiscal 2020

Fiscal 2021

Q1

Q2

Q3

Q4

TOTAL

Q1

Q2

Q3

Q4

TOTAL

REVENUES BY OFFERINGS

Cloud services and license support

$

6,805

$

6,811

$

6,930

$

6,845

$

27,392

$

6,947

$

7,112

$

7,252

$

21,311

Cloud license and on-premise license

812

1,126

1,231

1,959

5,127

886

1,092

1,276

3,254

Hardware

815

871

857

901

3,443

814

844

820

2,478

Services

786

806

778

735

3,106

720

752

737

2,209

Total revenues

$

9,218

$

9,614

$

9,796

$

10,440

$

39,068

$

9,367

$

9,800

$

10,085

$

29,252

AS REPORTED REVENUE GROWTH RATES

Cloud services and license support

3%

3%

4%

1%

3%