SOURCE: Oracle Corporation

Oracle Corporation

September 16, 2010 16:00 ET

Oracle Reports Q1 GAAP EPS Up 20% to 27 Cents; Non-GAAP EPS Up 38% to 42 Cents

Software New License Sales Up 25%, Total GAAP Revenue Up 48%

REDWOOD SHORES, CA--(Marketwire - September 16, 2010) - Oracle Corporation (NASDAQ: ORCL) today announced fiscal 2011 Q1 GAAP total revenues were up 48% to $7.5 billion, while non-GAAP total revenues were up 50% to $7.6 billion. GAAP new software license revenues were up 25% to $1.3 billion. Both the GAAP and non-GAAP software license updates and product support revenues were up 11% to $3.5 billion. GAAP operating income was up 10% to $1.9 billion, and GAAP operating margin was 26%. Non-GAAP operating income was up 27% to $2.9 billion, and non-GAAP operating margin was 39%. GAAP net income was up 20% to $1.4 billion, while non-GAAP net income was up 38% to $2.1 billion. GAAP earnings per share were $0.27, up 20% compared to last year while non-GAAP earnings per share were up 38% to $0.42. GAAP operating cash flow on a trailing twelve-month basis was $8.8 billion.

"We executed better than expected on both the top and bottom line for the quarter," said Oracle CFO, Jeff Epstein. "Strong revenue performance plus disciplined business management enabled a 38% increase in non-GAAP earnings per share to $0.42."

"Our software business grew strongly in all regions with new license sales up 25%," said Oracle President, Safra Catz. "Our hardware business also grew faster than we expected with Sun Solaris servers and Exadata leading the way."

"Next week at Oracle OpenWorld we will announce two new high-end systems that combine Sun hardware with Oracle software," said Oracle President, Mark Hurd. "We will invest over $4 billion in research and development this year, so our already robust product portfolio is only going to get stronger."

"Our Exadata database machine continued to win new customers in Q1," said Oracle CEO, Larry Ellison. "The worldwide Exadata pipeline now exceeds $1.5 billion for the full fiscal year."

In addition, Oracle's Board of Directors declared a cash dividend of $0.05 per share of outstanding common stock to be paid to stockholders of record as of the close of business on October 6, 2010, with a payment date of November 3, 2010. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to the final determination of Oracle's Board of Directors.

Q1 Earnings Conference Call and Webcast
Oracle will hold a conference call and webcast today to discuss these results at 2:00 p.m. Pacific. You may listen to the call by dialing (800) 214-0745 or (913) 643-0950, Passcode: 804992. To access the live webcast of this event, please visit the Oracle Investor Relations website at http://www.oracle.com/investor.

About Oracle
Oracle (NASDAQ: ORCL) is the world's most complete, open, and integrated business software and hardware systems company. For more information about Oracle, please visit our website at http://www.oracle.com or call Investor Relations at (650) 506-4073.

Trademarks
Oracle and Java are registered trademarks of Oracle and/or its affiliates. Other names may be trademarks of their respective owners.

"Safe Harbor" Statement: Statements in this press release relating to Oracle's or its Board of Directors' future plans, expectations, beliefs, intentions and prospects 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) Economic, political and market conditions, including the recent recession and global economic crisis, 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. (2) We may fail to achieve our financial forecasts due to such factors as delays or size reductions in transactions, fewer large transactions in a particular quarter, unanticipated fluctuations in currency exchange rates, delays in delivery of new products or releases or a decline in our renewal rates for software license updates and product support. (3) Our entrance into the hardware systems business may not be successful, and we may fail to achieve our financial forecasts with respect to this new business. (4) We have an active acquisition program and our acquisitions, including our acquisition of Sun Microsystems, may not be successful, may involve unanticipated costs or other integration issues or may disrupt our existing operations. (5) Our international sales and operations subject us to additional risks that can adversely affect our operating results, including risks relating to foreign currency gains and losses and risks relating to compliance with international and U.S. laws that apply to our international operations. (6) Intense competitive forces demand rapid technological advances and frequent new product introductions and could require us to reduce prices or cause us to lose customers. (7) If we are unable to develop new or sufficiently differentiated products and services, or to enhance and improve our products and support services in a timely manner or to position and/or price our products and services to meet market demand, customers may not buy new software licenses or hardware systems products or purchase or renew support contracts. 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 September 16, 2010. Oracle undertakes no duty to update any statement in light of new information or future events.


                            ORACLE CORPORATION

                       Q1 FISCAL 2011 FINANCIAL RESULTS
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    ($ in millions, except per share data)

                                                                     %
                    Three Months Ended August 31,                Increase
                 ------------------------------------     %      Constant
                            % of               % of    Increase  Currency
                   2010   Revenues    2009   Revenues  in US $      (1)
                 -------  --------  -------  --------  -------   --------
REVENUES
  New software
   licenses      $ 1,286     17%    $ 1,028     20%      25%       25%
  Software
   license
   updates and
   product
   support         3,450     46%      3,117     62%      11%       12%
                 -------  --------  -------  --------
    Software
     Revenues      4,736     63%      4,145     82%      14%       15%
                 -------  --------  -------  --------
  Hardware
   systems
   products        1,079     15%          -      0%       *         *
  Hardware
   systems
   support           619      8%          -      0%       *         *
                 -------  --------  -------  --------
    Hardware
     Systems
     Revenues      1,698     23%          -      0%       *         *
                 -------  --------  -------  --------
  Services         1,068     14%        909     18%      18%       18%
                 -------  --------  -------  --------
      Total
       Revenues    7,502    100%      5,054    100%      48%       49%
                 -------  --------  -------  --------

OPERATING EXPENSES
  Sales and
   marketing       1,333     18%        960     19%      39%       40%
  Software
   license
   updates and
   product
   support           308      4%        226      4%      36%       37%
  Hardware
   systems
   products          557      7%          -      0%       *         *
  Hardware
   systems
   support           301      4%          -      0%       *         *
  Services           896     12%        782     16%      15%       16%
  Research and
   development     1,103     15%        660     13%      67%       67%
  General and
   administra-
   tive              272      4%        201      4%      36%       36%
  Amortization
   of
   intangible
   assets            603      8%        431      9%      40%       40%
  Acquisition
   related and
   other              83      1%          6      0%   1,356%    1,095%
  Restructuring      129      1%         48      1%     168%      176%
                 -------  --------  -------  --------
      Total
       Operating
        Expenses   5,585     74%      3,314     66%      69%       69%
                 -------  --------  -------  --------

OPERATING INCOME   1,917     26%      1,740     34%      10%       11%
  Interest
   expense          (196)    (3%)      (179)    (3%)      9%        9%
  Non-operating
   income, net        74      1%          1      0%       *         *
                 -------  --------  -------  --------
INCOME BEFORE
 PROVISION FOR
 INCOME TAXES      1,795     24%      1,562     31%      15%       16%
                 -------  --------  -------  --------
  Provision
   for income
   taxes             443      6%        438      9%       1%        2%
                 -------  --------  -------  --------
NET INCOME       $ 1,352     18%    $ 1,124     22%      20%       21%
                 =======  ========  =======  ========

EARNINGS PER
 SHARE:
  Basic          $  0.27            $  0.22
  Diluted        $  0.27            $  0.22

WEIGHTED AVERAGE
 COMMON SHARES
 OUTSTANDING:
  Basic            5,026              5,009
  Diluted          5,083              5,063


(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, 2010, 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, 2010 compared with the corresponding prior year period
    decreased our revenues and operating income, each by 1 percentage
    point.

  * Not meaningful





                            ORACLE CORPORATION

                    Q1 FISCAL 2011 FINANCIAL RESULTS
     RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)
                ($ in millions, except per share data)

                                Three Months Ended August 31,
                    ------------------------------------------------------
                     2010               2010     2009               2009
                     GAAP      Adj.   Non-GAAP   GAAP      Adj.   Non-GAAP
                    -------  -------  --------  -------  -------  --------

TOTAL REVENUES
 (3) (4)            $ 7,502  $    86  $  7,588  $ 5,054  $     9  $  5,063

TOTAL SOFTWARE
 REVENUES (3)       $ 4,736  $    25  $  4,761  $ 4,145  $     9  $  4,154
  New software
   licenses           1,286        -     1,286    1,028        -     1,028
  Software license
   updates and
   product
   support (3)        3,450       25     3,475    3,117        9     3,126

TOTAL HARDWARE
 SYSTEMS REVENUES
 (4)                $ 1,698  $    61  $  1,759  $     -  $     -  $      -
  Hardware
   systems
   products           1,079        -     1,079        -        -         -
  Hardware
   systems
   support (4)          619       61       680        -        -         -

TOTAL OPERATING
 EXPENSES           $ 5,585  $  (944) $  4,641  $ 3,314  $  (569) $  2,745
  Stock-based
   compensation (5)     129     (129)        -       84      (84)        -
  Amortization
   of intangible
   assets (6)           603     (603)        -      431     (431)        -
  Acquisition
   related and other     83      (83)        -        6       (6)        -
  Restructuring         129     (129)        -       48      (48)        -

OPERATING INCOME    $ 1,917  $ 1,030  $  2,947  $ 1,740  $   578  $  2,318

OPERATING MARGIN %      26%                39%      34%                46%

INCOME TAX EFFECTS
 (7)                $   443  $   253  $    696  $   438  $   162  $    600

NET INCOME          $ 1,352  $   777  $  2,129  $ 1,124  $   416  $  1,540

DILUTED EARNINGS
 PER SHARE          $  0.27           $   0.42  $  0.22           $   0.30

DILUTED WEIGHTED
 AVERAGE COMMON
 SHARES OUTSTANDING   5,083        -     5,083    5,063        -     5,063


                                         % Increase
                       % Increase         (Decrease)
                    (Decrease) in US     in Constant
                            $             Currency (2)
                    ----------------  ----------------
                              Non-              Non-
                     GAAP     GAAP     GAAP     GAAP
                    -------  -------  -------  -------

TOTAL REVENUES
 (3)(4)               48%      50%      49%      51%

TOTAL SOFTWARE
 REVENUES (3)         14%      15%      15%      16%
  New software
   licenses           25%      25%      25%      25%
  Software
   license
   updates and
   product
   support (3)        11%      11%      12%      12%

TOTAL HARDWARE
 SYSTEMS REVENUES
 (4)                   *        *        *        *
  Hardware
   systems
   products            *        *        *        *
  Hardware
   systems
   support (4)         *        *        *        *

TOTAL OPERATING
 EXPENSES             69%      69%      69%      70%
  Stock-based
   compensation (5)   54%       *       54%       *
  Amortization
   of intangible
   assets (6)         40%       *       40%       *
  Acquisition
   related and
   other           1,356%       *    1,095%       *
  Restructuring      168%       *      176%       *

OPERATING INCOME      10%      27%      11%      28%

OPERATING MARGIN % (888) bp (694) bp (881) bp (693) bp

INCOME TAX EFFECTS
 (7)                   1%      16%       2%      17%
NET INCOME            20%      38%      21%      39%

DILUTED EARNINGS
 PER SHARE            20%      38%      21%      39%

DILUTED WEIGHTED
 AVERAGE COMMON
 SHARES OUTSTANDING    0%       0%       0%       0%


(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, 2010, which was the last day of our
    prior fiscal year, rather than the actual exchange rates in effect
    during the respective periods.

(3) As of August 31, 2010, approximately $46 million, $19 million and
    $7 million in estimated revenues related to assumed software support
    contracts will not be recognized for the remainder of fiscal 2011,
    fiscal 2012 and fiscal 2013, respectively, due to business combination
    accounting rules.

(4) As of August 31, 2010, approximately $87 million, $35 million and
    $11 million in estimated revenues related to hardware systems support
    contracts will not be recognized for the remainder of fiscal 2011,
    fiscal 2012 and fiscal 2013, respectively, due to business combination
    accounting rules.

(5) Stock-based compensation is included in the following GAAP operating
    expense categories:


                          Three Months Ended         Three Months Ended
                           August 31, 2010            August 31, 2009
                      -------------------------- --------------------------
                        GAAP     Adj.   Non-GAAP   GAAP     Adj.   Non-GAAP
                      -------- -------  -------- -------- -------  --------
     Sales and
      marketing       $     23 $   (23) $      - $     16 $   (16) $      -
     Software license
      updates and
      product support        5      (5)        -        4      (4)        -
     Hardware systems
      products               1      (1)        -        -       -         -
     Hardware systems
      support                1      (1)        -        -       -         -
     Services                4      (4)        -        3      (3)        -
     Research and
      development           59     (59)        -       32     (32)        -
     General and
      administrative        36     (36)        -       29     (29)        -
                      -------- -------  -------- -------- -------  --------
         Subtotal          129    (129)        -       84     (84)        -
                      -------- -------  -------- -------- -------  --------
     Acquisition
      related and
      other                  1      (1)        -        -       -         -
                      -------- -------  -------- -------- -------  --------
         Total
          stock-based
          comp-
          ensation    $    130 $  (130) $      - $     84 $   (84) $      -
                      ======== =======  ======== ======== =======  ========


(6) Estimated future annual amortization expense related to intangible
    assets as of August 31, 2010 is as follows:

    Remainder of
     Fiscal 2011      $  1,740
    Fiscal 2012          2,074
    Fiscal 2013          1,705
    Fiscal 2014          1,408
    Fiscal 2015          1,058
    Fiscal 2016            575
    Thereafter             190
                      --------
     Total intangible
      assets subject
      to amortization    8,750
    In-process
     research and
     development           374
                      --------
     Total intangible
      assets, net     $  9,124
                      ========

(7) Income tax effects were calculated reflecting an effective GAAP and
    non-GAAP tax rate of 24.7% and 28.0% in the first quarter of fiscal
    2011 and 2010, respectively.

 *  Not meaningful





                            ORACLE CORPORATION

                     Q1 FISCAL 2011 FINANCIAL RESULTS
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                              ($ in millions)


                                                    August 31,    May 31,
                                                       2010        2010
                                                    ----------  ----------
ASSETS

  Current Assets:
    Cash and cash equivalents                       $   12,018  $    9,914
    Marketable securities                               11,619       8,555
    Trade receivables, net                               3,721       5,585
    Inventories                                            235         259
    Deferred tax assets                                  1,142       1,159
    Prepaid expenses and other current assets            1,529       1,532
                                                    ----------  ----------
      Total Current Assets                              30,264      27,004

  Non-Current Assets:
    Property, plant and equipment, net                   2,835       2,763
    Intangible assets, net                               9,124       9,321
    Goodwill                                            20,901      20,425
    Deferred tax assets                                  1,119       1,267
    Other assets                                         1,012         798
                                                    ----------  ----------
      Total Non-Current Assets                          34,991      34,574
                                                    ----------  ----------
TOTAL ASSETS                                        $   65,255  $   61,578
                                                    ==========  ==========
LIABILITIES AND EQUITY

  Current Liabilities:
    Notes payable, current and other current
     borrowings                                     $    2,260  $    3,145
    Accounts payable                                       706         775
    Accrued compensation and related benefits            1,438       1,895
    Deferred revenues                                    6,903       5,900
    Other current liabilities                            2,493       2,976
                                                    ----------  ----------
      Total Current Liabilities                         13,800      14,691

  Non-Current Liabilities:
    Notes payable and other non-current borrowings      14,778      11,510
    Income taxes payable                                 2,679       2,695
    Deferred tax liabilities                               349         424
    Other non-current liabilities                        1,137       1,059
                                                    ----------  ----------
      Total Non-Current Liabilities                     18,943      15,688

  Equity                                                32,512      31,199
                                                    ----------  ----------
TOTAL LIABILITIES AND EQUITY                        $   65,255  $   61,578
                                                    ==========  ==========





                            ORACLE CORPORATION

                     Q1 FISCAL 2011 FINANCIAL RESULTS
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                              ($ in millions)


                                             Three Months Ended August 31,
                                            ------------------------------
                                                 2010            2009
                                            --------------  --------------

Cash Flows From Operating Activities:
  Net income                                $        1,352  $        1,124
  Adjustments to reconcile net income to
   net cash provided by operating
   activities:
      Depreciation                                      99              61
      Amortization of intangible assets                603             431
      Deferred income taxes                            (15)            (75)
      Stock-based compensation                         130              84
      Tax benefits on the exercise of stock
       options and vesting of restricted
       stock-based awards                               24              51
      Excess tax benefits on the exercise
       of stock options and vesting of
       restricted stock-based awards                   (10)            (30)
      Other, net                                        26              40
      Changes in operating assets and
       liabilities, net of effects from
       acquisitions:
          Decrease in trade receivables, net         1,942           1,870
          Decrease in inventories                       11               -
          Decrease in prepaid expenses and
           other assets                                348             251
          Decrease in accounts payable and
           other liabilities                          (898)           (642)
          Decrease in income taxes payable            (529)             (9)
          Increase in deferred revenues                734             582
                                            --------------  --------------
             Net cash provided by
              operating activities                   3,817           3,738
                                            --------------  --------------

Cash Flows From Investing Activities:
  Purchases of marketable securities and
   other investments                                (7,650)         (2,760)
  Proceeds from maturities and sales of
   marketable securities and other
   investments                                       4,684           1,947
  Acquisitions, net of cash acquired                  (832)            (79)
  Capital expenditures                                (118)            (55)
                                            --------------  --------------
             Net cash used for investing
              activities                            (3,916)           (947)
                                            --------------  --------------

Cash Flows From Financing Activities:
  Payments for repurchases of common stock            (249)           (244)
  Proceeds from issuances of common stock              169             247
  Payment of dividends to stockholders                (251)           (251)
  Proceeds from borrowings, net of issuance
   costs                                             3,204           4,461
  Repayments of borrowings                            (885)              -
  Excess tax benefits on the exercise of
   stock options and vesting of restricted
   stock-based awards                                   10              30
  Distributions to noncontrolling interests            (38)            (34)
                                            --------------  --------------
             Net cash provided by
              financing activities                   1,960           4,209
                                            --------------  --------------

Effect of exchange rate changes on cash
 and cash equivalents                                  243             103
                                            --------------  --------------

Net increase in cash and cash equivalents            2,104           7,103
                                            --------------  --------------

Cash and cash equivalents at beginning
 of period                                           9,914           8,995
                                            --------------  --------------

Cash and cash equivalents at end of period  $       12,018  $       16,098
                                            ==============  ==============





                            ORACLE CORPORATION

                     Q1 FISCAL 2011 FINANCIAL RESULTS
                 FREE CASH FLOW - TRAILING 4-QUARTERS (1)
                              ($ in millions)


                                                   Fiscal 2010
                                        ----------------------------------
                                          Q1       Q2       Q3       Q4
                                        -------  -------  -------  -------

GAAP Operating Cash Flow                $ 8,753  $ 8,654  $ 8,178  $ 8,681

Capital Expenditures (2)                   (261)    (230)    (199)    (230)
                                        -------  -------  -------  -------

Free Cash Flow                          $ 8,492  $ 8,424  $ 7,979  $ 8,451
                                        =======  =======  =======  =======

% Growth over prior year                     14%      11%       0%       9%

                                        -------  -------  -------  -------

GAAP Net Income                         $ 5,640  $ 5,802  $ 5,663  $ 6,135

Free Cash Flow as a % of Net Income         151%     145%     141%     138%

                                        -------  -------  -------  -------


                                                   Fiscal 2011
                                        ----------------------------------
                                          Q1       Q2       Q3       Q4
                                        -------  -------  -------  -------

GAAP Operating Cash Flow                $ 8,760

Capital Expenditures (2)                   (293)
                                        -------  -------  -------  -------

Free Cash Flow                          $ 8,467
                                        =======  =======  =======  =======

% Growth over prior year                      0%

                                        -------  -------  -------  -------

GAAP Net Income                         $ 6,363

Free Cash Flow as a % of Net Income         133%

                                        -------  -------  -------  -------


(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.

(2) Represents capital expenditures as reported in cash flows from
    investing activities on our cash flow statements presented in
    accordance with GAAP.





                            ORACLE CORPORATION

                     Q1 FISCAL 2011 FINANCIAL RESULTS
         SUPPLEMENTAL ANALYSIS OF GAAP REVENUES AND HEADCOUNT (1)
                              ($ in millions)

                                            Fiscal 2010
                         ------------------------------------------------
                            Q1        Q2        Q3        Q4      TOTAL
                         --------  --------  --------  --------  --------
REVENUES
  New software licenses  $  1,028  $  1,653  $  1,718  $  3,135  $  7,533
  Software license
   updates and product
   support                  3,117     3,247     3,297     3,431    13,092
                         --------  --------  --------  --------  --------
    Software Revenues       4,145     4,900     5,015     6,566    20,625

  Hardware systems
   products                     -         -       273     1,233     1,506
  Hardware systems
   support                      -         -       185       598       784
                         --------  --------  --------  --------  --------
    Hardware Systems
     Revenues                   -         -       458     1,831     2,290

  Consulting                  663       692       651       713     2,720
  On Demand                   180       188       211       295       874
  Education                    66        78        69       100       311
                         --------  --------  --------  --------  --------
    Services Revenues         909       958       931     1,108     3,905

                         --------  --------  --------  --------  --------
      Total Revenues     $  5,054  $  5,858  $  6,404  $  9,505  $ 26,820
                         ========  ========  ========  ========  ========

AS REPORTED REVENUE
 GROWTH RATES
  New software licenses       (17%)       2%       13%       14%        6%
  Software license
   updates and product
   support                      6%       14%       13%       12%       11%
    Software Revenues          (1%)       9%       13%       13%        9%

  Hardware systems
   products                     *         *         *         *         *
  Hardware systems
   support                      *         *         *         *         *
    Hardware Systems
     Revenues                   *         *         *         *         *

  Consulting                  (23%)     (18%)     (14%)      (9%)     (16%)
  On Demand                    (8%)      (1%)      10%       45%       12%
  Education                   (34%)     (22%)      (4%)      26%      (11%)
    Services Revenues         (22%)     (15%)      (9%)       4%      (11%)

      Total Revenues           (5%)       4%       17%       39%       15%

CONSTANT CURRENCY GROWTH
 RATES (2)
  New software licenses       (14%)      (5%)       8%       15%        4%
  Software license
   updates and product
   support                     11%        9%        8%       11%       10%
    Software Revenues           4%        4%        8%       13%        8%

  Hardware systems
   products                     *         *         *         *         *
  Hardware systems
   support                      *         *         *         *         *
    Hardware Systems
     Revenues                   *         *         *         *         *

  Consulting                  (19%)     (22%)     (18%)     (10%)     (17%)
  On Demand                    (3%)      (4%)       6%       44%       11%
  Education                   (30%)     (26%)      (8%)      24%      (12%)
    Services Revenues         (18%)     (19%)     (13%)       3%      (12%)

      Total Revenues           (1%)       0%       12%       38%       14%
                         --------  --------  --------  --------  --------

GEOGRAPHIC REVENUES

REVENUES
  Americas               $  2,671  $  2,979  $  3,284  $  4,886  $ 13,819
  Europe, Middle East &
   Africa                   1,642     1,976     2,167     3,153     8,938
  Asia Pacific                741       903       953     1,466     4,063
                         --------  --------  --------  --------  --------
      Total Revenues     $  5,054  $  5,858  $  6,404  $  9,505  $ 26,820
                         ========  ========  ========  ========  ========

HEADCOUNT

GEOGRAPHIC AREA
  Americas                 32,034    31,849    44,554    43,968
  Europe, Middle East &
   Africa                  16,839    16,491    23,566    23,040
  Asia Pacific             35,766    35,026    38,372    37,561
                         --------  --------  --------  --------  --------
      Total Company        84,639    83,366   106,492   104,569
                         ========  ========  ========  ========  ========


                                            Fiscal 2011
                         ------------------------------------------------
                            Q1        Q2        Q3        Q4      TOTAL
                         --------  --------  --------  --------  --------
REVENUES
  New software licenses  $  1,286                                $  1,286
  Software license
   updates and product
   support                  3,450                                   3,450
                         --------  --------  --------  --------  --------
    Software Revenues       4,736                                   4,736

  Hardware systems
   products                 1,079                                   1,079
  Hardware systems
   support                    619                                     619
                         --------  --------  --------  --------  --------
    Hardware Systems
     Revenues               1,698                                   1,698

  Consulting                  666                                     666
  On Demand                   321                                     321
  Education                    81                                      81
                         --------  --------  --------  --------  --------
    Services Revenues       1,068                                   1,068

                         --------  --------  --------  --------  --------
      Total Revenues     $  7,502                                $  7,502
                         ========  ========  ========  ========  ========

AS REPORTED REVENUE
 GROWTH RATES
  New software licenses        25%                                     25%
  Software license
   updates and product
   support                     11%                                     11%
    Software Revenues          14%                                     14%

  Hardware systems
   products                     *                                       *
  Hardware systems
   support                      *                                       *
    Hardware Systems
     Revenues                   *                                       *

  Consulting                    0%                                      0%
  On Demand                    78%                                     78%
  Education                    24%                                     24%
    Services Revenues          18%                                     18%

      Total Revenues           48%                                     48%

CONSTANT CURRENCY GROWTH
 RATES (2)
  New software licenses        25%                                     25%
  Software license
   updates and product
   support                     12%                                     12%
    Software Revenues          15%                                     15%

  Hardware systems
   products                     *                                       *
  Hardware systems
   support                      *                                       *
    Hardware Systems
     Revenues                   *                                       *

  Consulting                    1%                                      1%
  On Demand                    80%                                     80%
  Education                    24%                                     24%
    Services Revenues          18%                                     18%

      Total Revenues           49%                                     49%

                         --------  --------  --------  --------  --------

GEOGRAPHIC REVENUES

REVENUES
  Americas               $  3,904                                $  3,904
  Europe, Middle East &
   Africa                   2,381                                   2,381
  Asia Pacific              1,217                                   1,217
                         --------  --------  --------  --------  --------
      Total Revenues     $  7,502                                $  7,502
                         ========  ========  ========  ========  ========

HEADCOUNT

GEOGRAPHIC AREA
  Americas                 44,494                                  44,494
  Europe, Middle East &
   Africa                  22,886                                  22,886
  Asia Pacific             37,856                                  37,856
                         --------  --------  --------  --------  --------
      Total Company       105,236                                 105,236
                         ========  ========  ========  ========  ========


(1) The sum of the quarterly financial information may vary from
    year-to-date financial information 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, 2010 and 2009 for the fiscal 2011
    and fiscal 2010 constant currency growth rate calculations presented,
    respectively, rather than the actual exchange rates in effect during
    the respective periods.

*   Not meaningful





                            ORACLE CORPORATION

                     Q1 FISCAL 2011 FINANCIAL RESULTS
        SUPPLEMENTAL TOTAL SOFTWARE PRODUCT REVENUE ANALYSIS (1)
                              ($ in millions)


                                             Fiscal 2010
                          ------------------------------------------------
                             Q1        Q2        Q3        Q4      TOTAL
                          --------  --------  --------  --------  --------
SOFTWARE REVENUES

  DATABASE & MIDDLEWARE
   REVENUES
    New software licenses $    711  $  1,175  $  1,241  $  2,280  $  5,406
    Software license
     updates and product
     support                 2,065     2,131     2,191     2,309     8,696
                          --------  --------  --------  --------  --------
      Database and
       Middleware
       Revenues           $  2,776  $  3,306  $  3,432  $  4,589  $ 14,102
                          ========  ========  ========  ========  ========

  AS REPORTED GROWTH RATES
    New software licenses      (22%)       1%       11%       18%        6%
    Software license
     updates and product
     support                     9%       16%       14%       15%       14%
      Database and
       Middleware
       Revenues                 (1%)      10%       13%       16%       10%

  CONSTANT CURRENCY GROWTH
   RATES (2)
    New software licenses      (19%)      (5%)       5%       18%        4%
    Software license
     updates and product
     support                    14%       12%        9%       13%       12%
      Database and
       Middleware
       Revenues                  4%        5%        8%       16%        9%

                          --------  --------  --------  --------  --------

  APPLICATIONS REVENUES
    New software licenses $    317  $    478  $    477  $    855  $  2,127
    Software license
     updates and product
     support                 1,052     1,116     1,106     1,122     4,396
                          --------  --------  --------  --------  --------
      Applications
       Revenues           $  1,369  $  1,594  $  1,583  $  1,977  $  6,523
                          ========  ========  ========  ========  ========

  AS REPORTED GROWTH RATES
    New software licenses       (4%)       2%       21%        6%        6%
    Software license
     updates and product
     support                     1%       10%       10%        8%        7%
      Applications
       Revenues                  0%        7%       13%        7%        7%

  CONSTANT CURRENCY GROWTH
   RATES (2)
    New software licenses        0%       (3%)      15%        7%        5%
    Software license
     updates and product
     support                     6%        6%        5%        6%        6%
      Applications
       Revenues                  4%        3%        8%        6%        5%

                          --------  --------  --------  --------  --------


                                            Fiscal 2011
                          ------------------------------------------------
                             Q1        Q2        Q3        Q4      TOTAL
                          --------  --------  --------  --------  --------
SOFTWARE REVENUES

  DATABASE & MIDDLEWARE
   REVENUES
    New software licenses $    937                                $    937
    Software license
     updates and product
     support                 2,316                                   2,316
                          --------  --------  --------  --------  --------
      Database and
       Middleware
       Revenues           $  3,253                                $  3,253
                          ========  ========  ========  ========  ========

  AS REPORTED GROWTH RATES
    New software licenses       32%                                     32%
    Software license
     updates and product
     support                    12%                                     12%
      Database and
       Middleware
       Revenues                 17%                                     17%

  CONSTANT CURRENCY GROWTH
   RATES (2)
    New software licenses       32%                                     32%
    Software license
     updates and product
     support                    13%                                     13%
      Database and
       Middleware
       Revenues                 18%                                     18%

                          --------  --------  --------  --------  --------

  APPLICATIONS REVENUES
    New software licenses $    349                                $    349
    Software license
     updates and product
     support                 1,134                                   1,134
                          --------  --------  --------  --------  --------
      Applications
       Revenues           $  1,483                                $  1,483
                          ========  ========  ========  ========  ========

  AS REPORTED GROWTH RATES
    New software licenses       10%                                     10%
    Software license
     updates and product
     support                     8%                                      8%
      Applications
       Revenues                  8%                                      8%

  CONSTANT CURRENCY GROWTH
   RATES (2)
    New software licenses       10%                                     10%
    Software license
     updates and product
     support                     9%                                      9%
      Applications
       Revenues                  9%                                      9%

                          --------  --------  --------  --------  --------


(1) The sum of the quarterly financial information may vary from
    year-to-date financial information 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, 2010 and 2009 for the fiscal 2011
    and fiscal 2010 constant currency growth rate calculations presented,
    respectively, rather than the actual exchange rates in effect during
    the respective periods.





                            ORACLE CORPORATION

                     Q1 FISCAL 2011 FINANCIAL RESULTS
    SUPPLEMENTAL GEOGRAPHIC NEW SOFTWARE LICENSE AND HARDWARE SYSTEMS
                      PRODUCTS REVENUES ANALYSIS (1)
                              ($ in millions)


                                           Fiscal 2010
                         ------------------------------------------------
                            Q1        Q2        Q3        Q4      TOTAL
                         --------  --------  --------  --------  --------

AMERICAS

  Database & Middleware  $    310  $    492  $    540  $  1,123  $  2,465
  Applications                185       286       283       485     1,239
                         --------  --------  --------  --------  --------
    New Software License
     Revenues            $    495  $    778  $    823  $  1,608  $  3,704
                         --------  --------  --------  --------  --------
  Hardware Systems
   Products Revenues     $      -  $      -  $    131  $    617  $    747
                         ========  ========  ========  ========  ========

AS REPORTED GROWTH RATES
  Database & Middleware       (12%)       4%       20%       34%       17%
  Applications                  2%        2%       26%       16%       12%
    New Software License
     Revenues                  (7%)       4%       22%       28%       15%
  Hardware Systems
   Products Revenues            *         *         *         *         *

CONSTANT CURRENCY GROWTH
 RATES (2)
  Database & Middleware       (11%)       2%       16%       32%       15%
  Applications                  6%        1%       23%       15%       11%
    New Software License
     Revenues                  (5%)       1%       18%       26%       14%
  Hardware Systems
   Products Revenues            *         *         *         *         *

                         --------  --------  --------  --------  --------

EUROPE / MIDDLE EAST /
 AFRICA

  Database & Middleware  $    224  $    429  $    456  $    751  $  1,859
  Applications                 90       119       134       261       604
                         --------  --------  --------  --------  --------
    New Software License
     Revenues            $    314  $    548  $    590  $  1,012  $  2,463
                         --------  --------  --------  --------  --------
  Hardware Systems
   Products Revenues     $      -  $      -  $     95  $    390  $    485
                         ========  ========  ========  ========  ========

AS REPORTED GROWTH RATES
  Database & Middleware       (31%)      (1%)       2%       (1%)      (5%)
  Applications                 (5%)      (6%)       7%       (7%)      (4%)
    New Software License
     Revenues                 (25%)      (2%)       3%       (3%)      (5%)
  Hardware Systems
   Products Revenues            *         *         *         *         *

CONSTANT CURRENCY GROWTH
 RATES (2)
  Database & Middleware       (26%)     (10%)      (3%)       6%       (5%)
  Applications                  3%      (14%)       1%       (2%)      (3%)
     New Software License
      Revenues                (20%)     (11%)      (2%)       4%       (4%)
  Hardware Systems
   Products Revenues            *         *         *         *         *

                         --------  --------  --------  --------  --------

ASIA PACIFIC

  Database & Middleware  $    177  $    254  $    245  $    406  $  1,082
  Applications                 42        73        60       109       284
                         --------  --------  --------  --------  --------
     New Software License
      Revenues           $    219  $    327  $    305  $    515  $  1,366
                         --------  --------  --------  --------  --------
  Hardware Systems
   Products Revenues     $      -  $      -  $     47  $    226  $    274
                         ========  ========  ========  ========  ========

AS REPORTED GROWTH RATES
  Database & Middleware       (22%)       0%        9%       19%        3%
  Applications                (24%)      17%       29%        2%        5%
     New Software License
      Revenues                (22%)       3%       12%       15%        4%
  Hardware Systems
   Products Revenues            *         *         *         *         *

CONSTANT CURRENCY GROWTH
 RATES (2)
  Database & Middleware       (22%)     (10%)       1%       14%       (3%)
  Applications                (23%)       2%       16%       (3%)      (2%)
     New Software License
      Revenues                (22%)      (8%)       4%       10%       (3%)
  Hardware Systems
   Products Revenues            *         *         *         *         *

                         --------  --------  --------  --------  --------

TOTAL COMPANY

  Database & Middleware  $    711  $  1,175  $  1,241  $  2,280  $  5,406
  Applications                317       478       477       855     2,127
                         --------  --------  --------  --------  --------
     New Software License
      Revenues           $  1,028  $  1,653  $  1,718  $  3,135  $  7,533
                         --------  --------  --------  --------  --------
  Hardware Systems
   Products Revenues     $      -  $      -  $    273  $  1,233  $  1,506
                         ========  ========  ========  ========  ========

AS REPORTED GROWTH RATES
  Database & Middleware       (22%)       1%       11%       18%        6%
  Applications                 (4%)       2%       21%        6%        6%
     New Software License
      Revenues                (17%)       2%       13%       14%        6%
  Hardware Systems
   Products Revenues            *         *         *         *         *

CONSTANT CURRENCY GROWTH
 RATES (2)
  Database & Middleware       (19%)      (5%)       5%       18%        4%
  Applications                  0%       (3%)      15%        7%        5%
     New Software License
      Revenues                (14%)      (5%)       8%       15%        4%
  Hardware Systems
   Products Revenues            *         *         *         *         *

                         --------  --------  --------  --------  --------


                                            Fiscal 2011
                         ------------------------------------------------
                            Q1        Q2        Q3        Q4      TOTAL
                         --------  --------  --------  --------  --------

AMERICAS

  Database & Middleware  $    446                                $    446
  Applications                212                                     212
                         --------  --------  --------  --------  --------
     New Software License
      Revenues           $    658                                $    658
                         --------  --------  --------  --------  --------
  Hardware Systems
   Products Revenues     $    543                                $    543
                         ========  ========  ========  ========  ========

AS REPORTED GROWTH RATES
  Database & Middleware        44%                                     44%
  Applications                 14%                                     14%
     New Software License
      Revenues                 33%                                     33%
  Hardware Systems
   Products Revenues            *                                       *

CONSTANT CURRENCY GROWTH
 RATES (2)
  Database & Middleware        43%                                     43%
  Applications                 14%                                     14%
     New Software License
      Revenues                 32%                                     32%
  Hardware Systems
   Products Revenues            *                                       *

                         --------  --------  --------  --------  --------

EUROPE / MIDDLE EAST /
 AFRICA

  Database & Middleware  $    279                                $    279
  Applications                 73                                      73
                         --------  --------  --------  --------  --------
     New Software License
      Revenues           $    352                                $    352
                         --------  --------  --------  --------  --------
  Hardware Systems
   Products Revenues     $    338                                $    338
                         ========  ========  ========  ========  ========

AS REPORTED GROWTH RATES
  Database & Middleware        25%                                     25%
  Applications                (19%)                                   (19%)
     New Software License
      Revenues                 12%                                     12%
  Hardware Systems
   Products Revenues            *                                       *

CONSTANT CURRENCY GROWTH
 RATES (2)
  Database & Middleware        32%                                     32%
  Applications                (16%)                                   (16%)
     New Software License
      Revenues                 18%                                     18%
  Hardware Systems
   Products Revenues            *                                       *

                         --------  --------  --------  --------  --------

ASIA PACIFIC

  Database & Middleware  $    212                                $    212
  Applications                 64                                      64
                         --------  --------  --------  --------  --------
     New Software License
      Revenues           $    276                                $    276
                         --------  --------  --------  --------  --------
  Hardware Systems
   Products Revenues     $    198                                $    198
                         ========  ========  ========  ========  ========

AS REPORTED GROWTH RATES
  Database & Middleware        19%                                     19%
  Applications                 54%                                     54%
     New Software License
      Revenues                 26%                                     26%
  Hardware Systems
   Products Revenues            *                                       *

CONSTANT CURRENCY GROWTH
 RATES (2)
  Database & Middleware        13%                                     13%
  Applications                 47%                                     47%
     New Software License
      Revenues                 19%                                     19%
  Hardware Systems
   Products Revenues            *                                       *

                         --------  --------  --------  --------  --------

TOTAL COMPANY

  Database & Middleware  $    937                                $    937
  Applications                349                                     349
                         --------  --------  --------  --------  --------
     New Software License
      Revenues           $  1,286                                $  1,286
                         --------  --------  --------  --------  --------
  Hardware Systems
   Products Revenues     $  1,079                                $  1,079
                         ========  ========  ========  ========  ========

AS REPORTED GROWTH RATES
  Database & Middleware        32%                                     32%
  Applications                 10%                                     10%
     New Software License
      Revenues                 25%                                     25%
  Hardware Systems
   Products Revenues            *                                       *

CONSTANT CURRENCY GROWTH
 RATES (2)
  Database & Middleware        32%                                     32%
  Applications                 10%                                     10%
     New Software License
      Revenues                 25%                                     25%
  Hardware Systems
   Products Revenues            *                                       *

                         --------  --------  --------  --------  --------


(1) The sum of the quarterly financial information may vary from
    year-to-date financial information 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, 2010 and 2009 for the fiscal 2011
    and fiscal 2010 constant currency growth rate calculations presented,
    respectively, rather than the actual exchange rates in effect during
    the respective periods.

*  Not meaningful




                                                               APPENDIX A

                           ORACLE CORPORATION
                    Q1 FISCAL 2011 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:

  • Software license updates and product support and hardware systems support deferred revenues: Business combination accounting rules require us to account for the fair values of software license updates and product support contracts and hardware systems support contracts assumed in connection with our acquisitions. Because these support contracts are typically one year in duration, our GAAP revenues for the one year period subsequent to our acquisition of a business do not reflect the full amount of support revenues on these assumed support contracts that would have otherwise been recorded by the acquired entity. The non-GAAP adjustment to our software license updates and product support revenues and hardware systems support revenues is intended to include, and thus reflect, the full amount of such revenues. We believe the adjustment to these support revenues is useful to investors as a measure of the ongoing performance of our business. We have historically experienced high renewal rates on our software license updates and product support contracts and our objective is to increase the renewal rates on acquired and new hardware systems support contracts; however, we cannot be certain that our customers will renew our software license updates and product support contracts or our hardware systems support contracts.

  • Stock-based compensation expenses: We have excluded the effect of stock-based compensation expenses from our non-GAAP operating expenses 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 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 and net income measures. We incurred significant 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 consist of personnel related costs for transitional employees, other acquired employee related costs, stock-based compensation expenses (in addition to the stock-based compensation expenses described above), integration related professional services, certain business combination adjustments after the measurement period has ended and certain other operating expenses, net. Substantially all of the stock-based compensation expenses included in acquisition related and other expenses resulted from unvested options assumed in acquisitions whose vesting was fully accelerated upon termination of the employees pursuant to the original terms of those options. Restructuring expenses consist 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 expenses and restructuring expenses generally diminish over time with respect to past acquisitions, we generally will incur these expenses in connection with any future acquisitions.

Contact Information

  • Contact:

    Ken Bond
    Oracle Investor Relations
    1.650.607.0349
    Email Contact

    Karen Tillman
    Oracle Corporate Communications
    1.650.607.0326
    Email Contact