SOURCE: Oracle Corporation

Oracle Corporation

September 16, 2009 16:00 ET

Oracle Reports Q1 GAAP EPS of 22 Cents Up 8%, Non-GAAP EPS of 30 Cents Up 3%

Operating Margins Up Over 500 Basis Points

REDWOOD SHORES, CA--(Marketwire - September 16, 2009) - Oracle Corporation (NASDAQ: ORCL) today announced fiscal 2010 Q1 GAAP earnings per share were $0.22 up 8% compared to last year. First quarter GAAP total revenues were down 5% to $5.1 billion, while quarterly GAAP net income was up 4% to $1.1 billion. GAAP new software license revenues were down 17% to $1.0 billion. GAAP software license updates and product support revenues were up 6% to $3.1 billion. GAAP operating income was up 14% to $1.7 billion and GAAP operating margin was up 590 basis points to 34%. GAAP operating cash flow on a trailing twelve-month basis was $8.8 billion, up 10%.

First quarter non-GAAP earnings per share were up 3% to $0.30. Non-GAAP total revenues were down 7% to $5.1 billion, while non-GAAP net income was flat at $1.5 billion, compared to the same quarter last year. Non-GAAP operating income was up 7% to $2.3 billion and non-GAAP operating margin was up 570 basis points to 46%.

Oracle's results were impacted by the reduced value of foreign currencies when compared to US dollars, reducing Q1 GAAP earnings by $0.02 per share. Without this impact, Oracle's Q1 GAAP and non-GAAP earnings per share would have been $0.24 and $0.32, respectively. GAAP and non-GAAP new software license revenues would have been down 14%, and our software license updates and product support revenues would have been up 11% on a GAAP basis and up 8% on a non-GAAP basis. GAAP and non-GAAP operating income would have been up 21% and 11%, respectively.

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 14, 2009, with a payment date of November 4, 2009. 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.

"Yesterday, Sun and Oracle announced Exadata Version 2, which is twice as fast as Exadata Version 1 for data warehousing, and the first and only database machine that runs online transaction processing -- OLTP -- applications," said Oracle CEO Larry Ellison. "This new combination of Sun hardware and Oracle software is now the world's fastest computer system for both OLTP and data warehousing."

"By substantially improving operating margins we were able to increase Q1 earnings per share even though revenues decreased slightly," said Safra Catz, Oracle's President. "We grew non-GAAP operating margins by 570 basis points to 46 percent in our seasonally smallest quarter. Our operating model continues to drive earnings for our stockholders."

"Software license updates and product support revenues grew 11%, to $3.1 billion, for the quarter when adjusted for the change in the US dollar since last year," said Oracle Executive Vice President and CFO, Jeff Epstein. "This growth, coupled with our disciplined expense management, was key to our ability to generate a record $8.5 billion in free cash flow over the last twelve months."

"We grew faster than SAP in every region around the world, including Europe, where our applications business grew 3 percent in constant currency versus negative 39 percent for SAP's most recent quarter," said Oracle President Charles Phillips. "Our applications team also executed especially well in North America, where our applications business grew 8 percent in constant currency versus negative 50 percent for SAP."

Q1 Earnings Conference Call and Webcast

Oracle will hold a conference call and web broadcast today to discuss these results at 2:00 p.m. (PDT) / 5:00 p.m. (EDT). You may listen to the call by dialing (866) 423-8620 or (719) 387-4093, Passcode: 745867. To access the live web broadcast of this event, please visit the Oracle Investor Relations website at http://www.oracle.com/investor.

About Oracle

Oracle is the world's largest enterprise software company. For more information about Oracle, please visit our web site at oracle.com or call Investor Relations at (650) 506-4073.

Trademarks

Oracle is a registered trademark of Oracle Corporation 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, 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 global economic and financial crisis, could adversely affect our business, operating results or financial condition, including our revenue growth and profitability, through reductions in customer IT budgets and expenditures and through the general tightening of access to credit. (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) We cannot assure market acceptance of new products or services or new versions of existing or acquired products or services. (4) We have an active acquisition program and our acquisitions 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. 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 release is current as of September 16, 2009. Oracle undertakes no duty to update any statement in light of new information or future events.


                            ORACLE CORPORATION
                     Q1 FISCAL 2010 FINANCIAL RESULTS
             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  ($ in millions, except per share data)

                                                                    %
                                                                 Increase
                                                                (Decrease)
                   Three Months Ended August 31,          %         in
               --------------------------------------  Increase  Constant
                           % of                % of   (Decrease) Currency
                 2009    Revenues    2008    Revenues  in US $     (1)
               --------  --------  --------  --------  --------  --------
REVENUES
  New software
   licenses    $  1,028        20% $  1,237        23%      (17%)     (14%)
  Software
   license
   updates and
   product
   support        3,117        62%    2,935        55%        6%       11%
               --------  --------  --------  --------
    Software
     Revenues     4,145        82%    4,172        78%       (1%)       4%
               --------  --------  --------  --------

  Services          909        18%    1,159        22%      (22%)     (18%)
               --------  --------  --------  --------

     Total
      Revenues    5,054       100%    5,331       100%       (5%)      (1%)
               --------  --------  --------  --------

OPERATING
 EXPENSES
  Sales and
   marketing        960        19%    1,112        21%      (14%)     (10%)
  Software
   license
   updates and
   product
   support          226         4%      282         5%      (20%)     (16%)
  Cost of
   services         782        16%    1,026        19%      (24%)     (19%)
  Research and
   development      660        13%      708        13%       (7%)      (5%)
  General and
   administ-
   rative           201         4%      206         4%       (3%)       1%
  Amortization
   of
   intangible
   assets           431         9%      413         8%        4%        4%
  Acquisition
   related and
   other              6         0%       49         1%      (88%)     (87%)
  Restructuring      48         1%       14         0%      255%      284%
               --------  --------  --------  --------

     Total
      Operating
      Expenses    3,314        66%    3,810        71%      (13%)      (9%)
               --------  --------  --------  --------

OPERATING
 INCOME           1,740        34%    1,521        29%       14%       21%
  Interest
   expense         (179)       (3%)    (159)       (3%)      12%       12%
  Non-operating
   income, net        1         0%       82         1%      (98%)     (99%)
               --------  --------  --------  --------

INCOME BEFORE
 PROVISION FOR
 INCOME TAXES     1,562        31%    1,444        27%        8%       15%
               --------  --------  --------  --------
  Provision
   for income
   taxes            438         9%      367         7%       19%       27%
               --------  --------  --------  --------

NET INCOME     $  1,124        22% $  1,077        20%        4%       11%
               ========  ========  ========  ========

EARNINGS PER
 SHARE:
  Basic        $   0.22            $   0.21
  Diluted      $   0.22            $   0.21
WEIGHTED
 AVERAGE
 COMMON SHARES
 OUTSTANDING:
  Basic           5,009               5,152
  Diluted         5,063               5,235


(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 rate in effect on May 31, 2009, which was the last day of our
    prior fiscal year, rather than the actual exchange rates in effect
    during the respective periods. The United States dollar strengthened
    relative to most major international currencies in the three months
    ended August 31, 2009 compared with the corresponding prior year
    period, reducing revenues by 4 percentage points, operating expenses by
    4 percentage points and operating income by 7 percentage points.





                            ORACLE CORPORATION
                     Q1 FISCAL 2010 FINANCIAL RESULTS
    RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)
                  ($ in millions, except per share data)


                              Three Months Ended August 31,
                ----------------------------------------------------------
                  2009                2009      2008                2008
                  GAAP      Adj.    Non-GAAP    GAAP      Adj.    Non-GAAP
                --------  --------  --------  --------  --------  --------

TOTAL REVENUES
 (3)            $  5,054  $      9  $  5,063  $  5,331  $     91  $  5,422

TOTAL SOFTWARE
 REVENUES (3)   $  4,145  $      9  $  4,154  $  4,172  $     91  $  4,263
  New software
   licenses        1,028         -     1,028     1,237         -     1,237
  Software
   license
   updates and
   product
   support (3)     3,117         9     3,126     2,935        91     3,026

TOTAL
 OPERATING
 EXPENSES       $  3,314  $   (569) $  2,745  $  3,810  $   (562) $  3,248
  Stock-based
   compensation
   (4)                84       (84)        -        86       (86)        -
  Amortization
   of intangible
   assets (5)        431      (431)        -       413      (413)        -
  Acquisition
   related and
   other               6        (6)        -        49       (49)        -
  Restructuring       48       (48)        -        14       (14)        -

OPERATING
 INCOME         $  1,740  $    578  $  2,318  $  1,521  $    653  $  2,174

OPERATING
 MARGIN %             34%                 46%       29%                 40%

INCOME TAX
 EFFECTS (6)    $    438  $    162  $    600  $    367  $    186  $    553

NET INCOME      $  1,124  $    416  $  1,540  $  1,077  $    467  $  1,544

DILUTED
 EARNINGS
 PER SHARE      $   0.22            $   0.30  $   0.21            $   0.29

DILUTED
 WEIGHTED
 AVERAGE
 COMMON
 SHARES
 OUTSTANDING       5,063         -     5,063     5,235         -     5,235


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

TOTAL REVENUES
 (3)                  (5%)         (7%)         (1%)         (2%)

TOTAL SOFTWARE
 REVENUES (3)         (1%)         (3%)          4%           2%
  New software
   licenses          (17%)        (17%)        (14%)        (14%)
  Software
   license
   updates and
   product
   support (3)         6%           3%          11%           8%

TOTAL
 OPERATING
 EXPENSES            (13%)        (15%)         (9%)        (12%)
  Stock-based
   compensation
   (4)                (3%)          *           (3%)          *
  Amortization
   of intangible
   assets (5)          4%           *            4%           *
  Acquisition
   related and
   other             (88%)          *          (87%)          *
  Restructuring      255%           *          284%           *

OPERATING
 INCOME               14%           7%          21%          11%

OPERATING
 MARGIN %            590 bp       568 bp       623 bp       558 bp

INCOME TAX
 EFFECTS (6)          19%           8%          27%          13%

NET INCOME             4%           0%          11%           4%

DILUTED
 EARNINGS
 PER SHARE             8%           3%          15%           8%

DILUTED
 WEIGHTED
 AVERAGE
 COMMON
 SHARES
 OUTSTANDING          (3%)         (3%)         (3%)         (3%)


(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 rate in effect on May 31, 2009, 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, 2009, approximately $15 million in estimated revenues
    related to assumed support contracts will not be recognized for fiscal
    2010 due to business combination accounting rules.

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

                      Three Months Ended           Three Months Ended
                       August 31, 2009              August 31, 2008
                ----------------------------  ----------------------------
                  GAAP      Adj.    Non-GAAP    GAAP      Adj.    Non-GAAP
                --------  --------  --------  --------  --------  --------
    Sales and
     marketing  $     16  $    (16) $      -  $     19  $    (19) $      -
    Software
     license
     updates
     and
     product
     support           4        (4)        -         3        (3)        -
    Cost of
     services          3        (3)        -         3        (3)        -
    Research
     and
     development      32       (32)        -        37       (37)        -
    General
     and
     administ-
     rative           29       (29)        -        24       (24)        -
                --------  --------  --------  --------  --------  --------
       Subtotal       84       (84)        -        86       (86)        -
                --------  --------  --------  --------  --------  --------
    Acquisition
     related
     and other         -         -         -         5        (5)        -
                --------  --------  --------  --------  --------  --------
       Total
        stock-
        based
        compen-
        sation  $     84  $    (84) $      -  $     91  $    (91) $      -
                ========  ========  ========  ========  ========  ========

(5) Estimated future annual amortization expense related to intangible
    assets as of August 31, 2009 is as follows:

                Remainder of Fiscal 2010       $     1,204
                Fiscal 2011                          1,388
                Fiscal 2012                          1,239
                Fiscal 2013                          1,090
                Fiscal 2014                            890
                Fiscal 2015                            703
                Thereafter                             372
                                               -----------
                            Total              $     6,886
                                               ===========

(6) Income tax effects were calculated reflecting an effective GAAP tax
    rate of 28.0% and 25.4% in the first quarter of fiscal 2010 and 2009,
    respectively, and an effective non-GAAP tax rate of 28.0% and 26.4% in
    the first quarter of fiscal 2010 and 2009, respectively. Our non-GAAP
    tax rate in the first quarter of fiscal 2009 excludes the effect of an
    adjustment to our non-current deferred tax liability associated with
    acquired intangible assets.

*   Not meaningful





                            ORACLE CORPORATION
                     Q1 FISCAL 2010 FINANCIAL RESULTS
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                              ($ in millions)


                                                    August 31,    May 31,
                                                       2009        2009
                                                    ----------  ----------
ASSETS

  Current Assets:
    Cash and cash equivalents                       $   16,098  $    8,995
    Marketable securities                                4,467       3,629
    Trade receivables, net                               2,584       4,430
    Deferred tax assets                                    710         661
    Prepaid expenses and other current assets              586         866
                                                    ----------  ----------
      Total Current Assets                              24,445      18,581

  Non-Current Assets:
    Property, net                                        1,924       1,922
    Intangible assets, net                               6,886       7,269
    Goodwill                                            18,867      18,842
    Other assets                                           876         802
                                                    ----------  ----------
      Total Non-Current Assets                          28,553      28,835
                                                    ----------  ----------

TOTAL ASSETS                                        $   52,998  $   47,416
                                                    ==========  ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

  Current Liabilities:
    Notes payable, current and other current
     borrowings                                     $    1,001  $    1,001
    Accounts payable                                       260         271
    Accrued compensation and related benefits            1,033       1,409
    Deferred revenues                                    5,283       4,592
    Other current liabilities                            1,583       1,876
                                                    ----------  ----------
      Total Current Liabilities                          9,160       9,149

  Non-Current Liabilities:
    Notes payable and other non-current borrowings      13,723       9,237
    Income taxes payable                                 2,485       2,423
    Deferred tax liabilities                               465         480
    Other non-current liabilities                          678         682
                                                    ----------  ----------
      Total Non-Current Liabilities                     17,351      12,822

  Stockholders' Equity                                  26,487      25,445
                                                    ----------  ----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY          $   52,998  $   47,416
                                                    ==========  ==========





                            ORACLE CORPORATION
                     Q1 FISCAL 2010 FINANCIAL RESULTS
             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                              ($ in millions)


                                                      Three Months Ended
                                                          August 31,
                                                    ----------------------
                                                       2009        2008
                                                    ----------  ----------
Cash Flows From Operating Activities:
  Net income                                        $    1,124  $    1,077
  Adjustments to reconcile net income to net
   cash provided by operating activities:
    Depreciation                                            61          64
    Amortization of intangible assets                      431         413
    Deferred income taxes                                  (75)        (53)
    Stock-based compensation                                84          91
    Tax benefits on the exercise of stock options           51         101
    Excess tax benefits on the exercise of stock
     options                                               (30)        (65)
    Other, net                                              40          19
    Changes in operating assets and liabilities,
     net of effects from acquisitions:
      Decrease in trade receivables, net                 1,870       1,812
      Decrease in prepaid expenses and other
       assets                                              251         397
      Decrease in accounts payable and other
       liabilities                                        (642)       (906)
      Decrease in income taxes payable                      (9)       (361)
      Increase in deferred revenues                        582         651
                                                    ----------  ----------

        Net cash provided by operating activities        3,738       3,240
                                                    ----------  ----------

Cash Flows From Investing Activities:
  Purchases of marketable securities and other
   investments                                          (2,760)     (3,188)
  Proceeds from maturities and sales of
   marketable securities and other investments           1,947       1,420
  Acquisitions, net of cash acquired                       (79)       (395)
  Capital expenditures                                     (55)       (323)
                                                    ----------  ----------

        Net cash used for investing activities            (947)     (2,486)
                                                    ----------  ----------

Cash Flows From Financing Activities:
  Payments for repurchases of common stock                (244)       (500)
  Proceeds from issuances of common stock                  247         280
  Payment of dividends to stockholders                    (251)          -
  Proceeds from borrowings, net of issuance costs        4,461           -
  Repayments of borrowings                                   -          (4)
  Excess tax benefits on the exercise of stock
   options                                                  30          65
  Distributions to noncontrolling interests                (34)        (30)
                                                    ----------  ----------

        Net cash provided by (used for)
         financing activities                            4,209        (189)
                                                    ----------  ----------

Effect of exchange rate changes on cash
 and cash equivalents                                      103        (274)
                                                    ----------  ----------

Net increase in cash and cash equivalents                7,103         291
                                                    ----------  ----------

Cash and cash equivalents at beginning of period         8,995       8,262
                                                    ----------  ----------

Cash and cash equivalents at end of period          $   16,098  $    8,553
                                                    ==========  ==========





                            ORACLE CORPORATION
                     Q1 FISCAL 2010 FINANCIAL RESULTS
                 FREE CASH FLOW - TRAILING 4-QUARTERS (1)
                              ($ in millions)


                       Fiscal 2009                     Fiscal 2010
             ------------------------------  ------------------------------
               Q1      Q2      Q3      Q4      Q1      Q2      Q3      Q4
             ------  ------  ------  ------  ------  ------  ------  ------

GAAP
 Operating
 Cash Flow   $7,941  $8,089  $8,542  $8,255  $8,753

Capital
 Expenditures
 (2)           (479)   (486)   (539)   (529)   (261)
             ------  ------  ------  ------  ------  ------  ------  ------

Free Cash
 Flow        $7,462  $7,603  $8,003  $7,726  $8,492
             ======  ======  ======  ======  ======  ======  ======  ======

% Growth
 over prior
 year            20%     15%     14%      8%     14%

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

GAAP Net
 Income      $5,758  $5,750  $5,739  $5,593  $5,640

Free Cash
 Flow as
 a % of
 Net Income     130%    132%    139%    138%    151%


(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 2010 FINANCIAL RESULTS
         SUPPLEMENTAL ANALYSIS OF GAAP REVENUES AND HEADCOUNT (1)
                              ($ in millions)


                                               Fiscal 2009
                              -------------------------------------------
                                 Q1       Q2       Q3       Q4     TOTAL
                              -------  -------  -------  -------  -------
REVENUES
  New software licenses       $ 1,237  $ 1,626  $ 1,516  $ 2,744  $ 7,123
  Software license updates
   and product support          2,935    2,850    2,917    3,052   11,754
                              -------  -------  -------  -------  -------
    Software Revenues           4,172    4,476    4,433    5,796   18,877

  Consulting                      865      842      758      782    3,247
  On Demand                       195      189      191      204      779
  Education                        99      100       71       79      349
                              -------  -------  -------  -------  -------
    Services Revenues           1,159    1,131    1,020    1,065    4,375

                              -------  -------  -------  -------  -------
      Total Revenues          $ 5,331  $ 5,607  $ 5,453  $ 6,861  $23,252
                              =======  =======  =======  =======  =======

AS REPORTED REVENUE GROWTH
 RATES
  New software licenses            14%      (3%)     (6%)    (13%)     (5%)
  Software license updates
   and product support             23%      14%      11%       8%      14%
    Software Revenues              20%       8%       5%      (3%)      6%

  Consulting                        8%      (4%)    (10%)    (18%)     (7%)
  On Demand                        23%      13%      10%       5%      12%
  Education                        (2%)     (9%)    (23%)    (30%)    (16%)
    Services Revenues               9%      (2%)     (8%)    (16%)     (5%)

      Total Revenues               18%       6%       2%      (5%)      4%

CONSTANT CURRENCY GROWTH
 RATES (2)
  New software licenses            10%       5%       3%      (4%)      1%
  Software license updates
   and product support             18%      20%      20%      18%      19%
    Software Revenues              16%      14%      14%       6%      12%

  Consulting                        5%       4%       0%     (10%)     (1%)
  On Demand                        19%      19%      19%      15%      18%
  Education                        (6%)     (3%)    (16%)    (23%)    (12%)
    Services Revenues               6%       5%       2%      (7%)      1%

      Total Revenues               14%      12%      11%       4%      10%


GEOGRAPHIC REVENUES

  REVENUES
    Americas                  $ 2,687  $ 2,904  $ 2,846  $ 3,463  $11,900
    Europe, Middle East
     & Africa                   1,830    1,881    1,824    2,413    7,948
    Asia Pacific                  814      822      783      985    3,404
                              -------  -------  -------  -------  -------
      Total Revenues          $ 5,331  $ 5,607  $ 5,453  $ 6,861  $23,252
                              =======  =======  =======  =======  =======

HEADCOUNT

  GEOGRAPHIC AREA
    Americas                   32,993   33,526   32,919   32,347
    Europe, Middle East
     & Africa                  17,096   17,184   17,348   17,129
    Asia Pacific               35,099   35,947   36,321   36,086
                              -------  -------  -------  -------  -------
      Total Company            85,188   86,657   86,588   85,562
                              =======  =======  =======  =======  =======


                                               Fiscal 2010
                              -------------------------------------------
                                 Q1       Q2       Q3       Q4     TOTAL
                              -------  -------  -------  -------  -------
REVENUES
  New software licenses       $ 1,028                             $ 1,028
  Software license updates
   and product support          3,117                               3,117
                              -------  -------  -------  -------  -------
    Software Revenues           4,145                               4,145

  Consulting                      663                                 663
  On Demand                       180                                 180
  Education                        66                                  66
                              -------  -------  -------  -------  -------
    Services Revenues             909                                 909

                              -------  -------  -------  -------  -------
      Total Revenues          $ 5,054                             $ 5,054
                              =======  =======  =======  =======  =======

AS REPORTED REVENUE GROWTH
 RATES
  New software licenses           (17%)                               (17%)
  Software license updates
   and product support              6%                                  6%
    Software Revenues              (1%)                                (1%)

  Consulting                      (23%)                               (23%)
  On Demand                        (8%)                                (8%)
  Education                       (34%)                               (34%)
    Services Revenues             (22%)                               (22%)

      Total Revenues               (5%)                                (5%)

CONSTANT CURRENCY GROWTH
 RATES (2)
  New software licenses           (14%)                               (14%)
  Software license updates
   and product support             11%                                 11%
    Software Revenues               4%                                  4%

  Consulting                      (19%)                               (19%)
  On Demand                        (3%)                                (3%)
  Education                       (30%)                               (30%)
    Services Revenues             (18%)                               (18%)

      Total Revenues               (1%)                                (1%)


GEOGRAPHIC REVENUES

  REVENUES
    Americas                  $ 2,671                             $ 2,671
    Europe, Middle East
     & Africa                   1,642                               1,642
    Asia Pacific                  741                                 741
                              -------  -------  -------  -------  -------
      Total Revenues          $ 5,054                             $ 5,054
                              =======  =======  =======  =======  =======

HEADCOUNT

  GEOGRAPHIC AREA
    Americas                   32,034                              32,034
    Europe, Middle East
     & Africa                  16,839                              16,839
    Asia Pacific               35,766                              35,766
                              -------  -------  -------  -------  -------
      Total Company            84,639                              84,639
                              =======  =======  =======  =======  =======


(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, 2009 and 2008 for the fiscal 2010
    and fiscal 2009 constant currency growth rate calculations presented,
    respectively, rather than the actual exchange rates in effect during
    the respective periods.





                            ORACLE CORPORATION
                     Q1 FISCAL 2010 FINANCIAL RESULTS
        SUPPLEMENTAL TOTAL SOFTWARE PRODUCT REVENUE ANALYSIS (1)
                              ($ in millions)


                                               Fiscal 2009
                              -------------------------------------------
                                 Q1       Q2       Q3       Q4     TOTAL
                              -------  -------  -------  -------  -------
APPLICATIONS REVENUES

  New software licenses       $   331  $   469  $   396  $   805  $ 2,000
  Software license updates
   and product support          1,043    1,015    1,003    1,044    4,105
                              -------  -------  -------  -------  -------
    Software Revenues         $ 1,374  $ 1,484  $ 1,399  $ 1,849  $ 6,105
                              =======  =======  =======  =======  =======

AS REPORTED GROWTH RATES
  New software licenses           (12%)    (15%)    (12%)    (19%)    (16%)
  Software license updates
   and product support             18%       9%       3%       0%       7%
    Software Revenues               9%       0%      (2%)     (9%)     (2%)

CONSTANT CURRENCY GROWTH
 RATES (2)
  New software licenses           (14%)     (9%)     (4%)    (11%)    (10%)
  Software license updates
   and product support             13%      15%      11%       9%      12%
    Software Revenues               5%       6%       7%      (1%)      4%


DATABASE & MIDDLEWARE
 REVENUES

  New software licenses       $   906  $ 1,157  $ 1,120  $ 1,939  $ 5,123
  Software license updates
   and product support          1,892    1,835    1,914    2,008    7,649
                              -------  -------  -------  -------  -------
    Software Revenues         $ 2,798  $ 2,992  $ 3,034  $ 3,947  $12,772
                              =======  =======  =======  =======  =======

AS REPORTED GROWTH RATES
  New software licenses            27%       4%      (4%)    (10%)      0%
  Software license updates
   and product support             26%      17%      16%      12%      18%
    Software Revenues              27%      12%       8%       0%      10%

CONSTANT CURRENCY GROWTH
 RATES (2)
  New software licenses            23%      12%       6%      (1%)      7%
  Software license updates
   and product support             22%      24%      25%      23%      23%
    Software Revenues              22%      19%      17%      10%      16%


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

  New software licenses       $   317                             $   317
  Software license updates
   and product support          1,052                               1,052
                              -------  -------  -------  -------  -------
    Software Revenues         $ 1,369                             $ 1,369
                              =======  =======  =======  =======  =======

AS REPORTED GROWTH RATES
  New software licenses            (4%)                                (4%)
  Software license updates
   and product support              1%                                  1%
    Software Revenues               0%                                  0%

CONSTANT CURRENCY GROWTH
 RATES (2)
  New software licenses             0%                                  0%
  Software license updates
   and product support              6%                                  6%
    Software Revenues               4%                                  4%


DATABASE & MIDDLEWARE
 REVENUES

  New software licenses       $   711                             $   711
  Software license updates
   and product support          2,065                               2,065
                              -------  -------  -------  -------  -------
    Software Revenues         $ 2,776                             $ 2,776
                              =======  =======  =======  =======  =======

AS REPORTED GROWTH RATES
  New software licenses           (22%)                               (22%)
  Software license updates
   and product support              9%                                  9%
    Software Revenues              (1%)                                (1%)

CONSTANT CURRENCY GROWTH
 RATES (2)
  New software licenses           (19%)                               (19%)
  Software license updates
   and product support             14%                                 14%
    Software Revenues               4%                                  4%


(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, 2009 and 2008 for the fiscal 2010
    and fiscal 2009 constant currency growth rate calculations presented,
    respectively, rather than the actual exchange rates in effect during
    the respective periods.





                            ORACLE CORPORATION
                     Q1 FISCAL 2010 FINANCIAL RESULTS
    SUPPLEMENTAL GEOGRAPHIC NEW SOFTWARE LICENSE REVENUE ANALYSIS (1)
                              ($ in millions)


                                               Fiscal 2009
                              -------------------------------------------
                                 Q1       Q2       Q3       Q4     TOTAL
                              -------  -------  -------  -------  -------
AMERICAS

  Database & Middleware       $   354  $   471  $   449  $   840  $ 2,114
  Applications                    182      280      224      416    1,102
                              -------  -------  -------  -------  -------
    New Software License
     Revenues                 $   536  $   751  $   673  $ 1,256  $ 3,216
                              =======  =======  =======  =======  =======

AS REPORTED GROWTH RATES
  Database & Middleware            18%       5%      (7%)     (9%)     (2%)
  Applications                     (9%)     (9%)    (11%)    (25%)    (16%)
    New Software License
     Revenues                       7%       0%      (9%)    (15%)     (7%)

CONSTANT CURRENCY GROWTH
 RATES (2)
  Database & Middleware            17%      10%      (1%)     (6%)      2%
  Applications                    (10%)     (6%)     (8%)    (22%)    (14%)
    New Software License
     Revenues                       6%       3%      (4%)    (12%)     (4%)


EUROPE / MIDDLE EAST / AFRICA

  Database & Middleware       $   326  $   431  $   446  $   759  $ 1,962
  Applications                     94      126      125      282      627
                              -------  -------  -------  -------  -------
    New Software License
     Revenues                 $   420  $   557  $   571  $ 1,041  $ 2,589
                              =======  =======  =======  =======  =======

AS REPORTED GROWTH RATES
  Database & Middleware            28%       2%       0%     (14%)     (2%)
  Applications                    (23%)    (28%)    (12%)    (11%)    (17%)
    New Software License
     Revenues                      11%      (7%)     (3%)    (13%)     (6%)

CONSTANT CURRENCY GROWTH
 RATES (2)
  Database & Middleware            20%      16%      15%       1%      10%
  Applications                    (26%)    (16%)      2%       5%      (6%)
    New Software License
     Revenues                       5%       7%      12%       2%       6%


ASIA PACIFIC

  Database & Middleware       $   226  $   255  $   225  $   340  $ 1,047
  Applications                     55       63       47      107      271
                              -------  -------  -------  -------  -------
    New Software License
     Revenues                 $   281  $   318  $   272  $   447  $ 1,318
                              =======  =======  =======  =======  =======

AS REPORTED GROWTH RATES
  Database & Middleware            45%       4%      (3%)     (1%)      7%
  Applications                      1%     (13%)    (18%)    (11%)    (11%)
    New Software License
     Revenues                      34%       0%      (6%)     (3%)      3%

CONSTANT CURRENCY GROWTH
 RATES (2)
  Database & Middleware            38%       8%       1%       5%      11%
  Applications                     (1%)     (2%)     (2%)     (4%)     (3%)
    New Software License
     Revenues                      28%       5%       1%       3%       7%


TOTAL COMPANY

  Database & Middleware       $   906  $ 1,157  $ 1,120  $ 1,939  $ 5,123
  Applications                    331      469      396      805    2,000
                              -------  -------  -------  -------  -------
    New Software License
     Revenues                 $ 1,237  $ 1,626  $ 1,516  $ 2,744  $ 7,123
                              =======  =======  =======  =======  =======

AS REPORTED GROWTH RATES
  Database & Middleware            27%       4%      (4%)    (10%)      0%
  Applications                    (12%)    (15%)    (12%)    (19%)    (16%)
    New Software License
     Revenues                      14%      (3%)     (6%)    (13%)     (5%)

CONSTANT CURRENCY GROWTH
 RATES (2)
  Database & Middleware            23%      12%       6%      (1%)      7%
  Applications                    (14%)     (9%)     (4%)    (11%)    (10%)
    New Software License
     Revenues                      10%       5%       3%      (4%)      1%


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

  Database & Middleware       $   310                             $   310
  Applications                    185                                 185
                              -------  -------  -------  -------  -------
    New Software License
     Revenues                 $   495                             $   495
                              =======  =======  =======  =======  =======

AS REPORTED GROWTH RATES
  Database & Middleware           (12%)                               (12%)
  Applications                      2%                                  2%
    New Software License
     Revenues                      (7%)                                (7%)

CONSTANT CURRENCY GROWTH
 RATES (2)
  Database & Middleware           (11%)                               (11%)
  Applications                      6%                                  6%
    New Software License
     Revenues                      (5%)                                (5%)


EUROPE / MIDDLE EAST / AFRICA

  Database & Middleware       $   224                             $   224
  Applications                     90                                  90
                              -------  -------  -------  -------  -------
    New Software License
     Revenues                 $   314                             $   314
                              =======  =======  =======  =======  =======

AS REPORTED GROWTH RATES
  Database & Middleware           (31%)                               (31%)
  Applications                     (5%)                                (5%)
    New Software License
     Revenues                     (25%)                               (25%)

CONSTANT CURRENCY GROWTH
 RATES (2)
  Database & Middleware           (26%)                               (26%)
  Applications                      3%                                  3%
    New Software License
     Revenues                     (20%)                               (20%)


ASIA PACIFIC

  Database & Middleware       $   177                             $   177
  Applications                     42                                  42
                              -------  -------  -------  -------  -------
    New Software License
     Revenues                 $   219                             $   219
                              =======  =======  =======  =======  =======

AS REPORTED GROWTH RATES
  Database & Middleware           (22%)                               (22%)
  Applications                    (24%)                               (24%)
    New Software License
     Revenues                     (22%)                               (22%)

CONSTANT CURRENCY GROWTH
 RATES (2)
  Database & Middleware           (22%)                               (22%)
  Applications                    (23%)                               (23%)
    New Software License
     Revenues                     (22%)                               (22%)


TOTAL COMPANY

  Database & Middleware       $   711                             $   711
  Applications                    317                                 317
                              -------  -------  -------  -------  -------
    New Software License
     Revenues                 $ 1,028                             $ 1,028
                              =======  =======  =======  =======  =======

AS REPORTED GROWTH RATES
  Database & Middleware           (22%)                               (22%)
  Applications                     (4%)                                (4%)
    New Software License
     Revenues                     (17%)                               (17%)

CONSTANT CURRENCY GROWTH
 RATES (2)
  Database & Middleware           (19%)                               (19%)
  Applications                      0%                                  0%
    New Software License
     Revenues                     (14%)                               (14%)


(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, 2009 and 2008 for the fiscal 2010
    and fiscal 2009 constant currency growth rate calculations presented,
    respectively, rather than the actual exchange rates in effect during
    the respective periods.





                                                               APPENDIX A

                            ORACLE CORPORATION
                     Q1 FISCAL 2010 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:

--  Support deferred revenue: Business combination accounting rules
    require us to account for the fair value of support contracts assumed
    in connection with our acquisitions. Because these are typically
    one-year contracts, our GAAP revenues for the one year period
    subsequent to our acquisition of a business do not reflect the full
    amount of software license updates and product support revenues on
    assumed support contracts that would have otherwise been recorded by
    the acquired entity. The non-GAAP adjustment is intended to reflect the
    full amount of such revenues. We believe this adjustment is useful to
    investors as a measure of the ongoing performance of our business
    because we have historically experienced high renewal rates on support
    contracts, although we cannot be certain that customers will renew
    these 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 revenues earned during the
    periods presented and will contribute to future period revenues as
    well. Amortization of intangible assets will recur in future periods.

--  Acquisition related and other expenses, and restructuring
    expenses: 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 or purchase price allocation 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 are not recurring 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