ORCL Oracle Corp

ORACLE  CORPORATION

Q3 FISCAL 2025 FINANCIAL RESULTS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in millions, except per share data)

% Increase

% Increase

(Decrease)

February 28,
2025

% of

February 29,
2024

% of

(Decrease)

in Constant

Revenues

Revenues

in US $

Currency (1)

REVENUES

Cloud services and license support

$         11,007

78 %

$           9,963

75 %

10 %

12 %

Cloud license and on-premise license

1,129

8 %

1,256

9 %

(10 %)

(8 %)

Hardware

703

5 %

754

6 %

(7 %)

(5 %)

Services

1,291

9 %

1,307

10 %

(1 %)

1 %

      Total revenues

14,130

100 %

13,280

100 %

6 %

8 %

OPERATING EXPENSES

Cloud services and license support

2,882

20 %

2,452

18 %

18 %

19 %

Hardware

197

1 %

217

2 %

(9 %)

(7 %)

Services

1,116

8 %

1,200

9 %

(7 %)

(5 %)

Sales and marketing

2,119

15 %

2,042

15 %

4 %

6 %

Research and development

2,429

17 %

2,248

17 %

8 %

9 %

General and administrative

390

3 %

377

3 %

3 %

5 %

Amortization of intangible assets

548

4 %

749

6 %

(27 %)

(27 %)

Acquisition related and other

28

0 %

155

1 %

(82 %)

(82 %)

Restructuring

63

1 %

90

1 %

(30 %)

(28 %)

      Total operating expenses

9,772

69 %

9,530

72 %

3 %

4 %

OPERATING INCOME

4,358

31 %

3,750

28 %

16 %

20 %

Interest expense

(892)

(6 %)

(876)

(6 %)

2 %

2 %

Non-operating expenses, net

(18)

0 %

(9)

0 %

101 %

91 %

INCOME BEFORE INCOME TAXES

3,448

25 %

2,865

22 %

20 %

25 %

Provision for income taxes

512

4 %

464

4 %

10 %

15 %

NET INCOME

$           2,936

21 %

$           2,401

18 %

22 %

27 %

EARNINGS PER SHARE:

Basic

$              1.05

$              0.87

Diluted

$              1.02

$              0.85

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Basic

2,799

2,748

Diluted

2,874

2,819

ORACLE  CORPORATION

Q3 FISCAL 2025 FINANCIAL RESULTS

RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)

($ in millions, except per share data)

Three Months Ended

% Increase
(Decrease)
in US $

% Increase (Decrease) in
Constant Currency (2) 

February 28,
2025

February 28,
2025

February 29,
2024

February 29,
2024

GAAP

Non-GAAP

GAAP

Non-GAAP

GAAP

Adj.

Non-GAAP

GAAP

Adj.

Non-GAAP

TOTAL REVENUES

$       14,130

$           -

$       14,130

$       13,280

$           -

$       13,280

6 %

6 %

8 %

8 %

TOTAL OPERATING EXPENSES

$         9,772

$   (1,837)

$         7,935

$         9,530

$   (2,042)

$         7,488

3 %

6 %

4 %

8 %

     Stock-based compensation (3)

1,198

(1,198)

-

1,048

(1,048)

-

14 %

*

14 %

*

     Amortization of intangible assets (4)

548

(548)

-

749

(749)

-

(27 %)

*

(27 %)

*

     Acquisition related and other

28

(28)

-

155

(155)

-

(82 %)

*

(82 %)

*

     Restructuring

63

(63)

-

90

(90)

-

(30 %)

*

(28 %)

*

OPERATING INCOME

$         4,358

$     1,837

$         6,195

$         3,750

$     2,042

$         5,792

16 %

7 %

20 %

9 %

OPERATING MARGIN %

31 %

44 %

28 %

44 %

261 bp.

23 bp.

294 bp.

34 bp.

INCOME TAX EFFECTS (5)

$            512

$        542

$         1,054

$            464

$        461

$            925

10 %

14 %

15 %

17 %

NET INCOME

$         2,936

$     1,295

$         4,231

$         2,401

$     1,581

$         3,982

22 %

6 %

27 %

9 %

DILUTED EARNINGS PER SHARE

$           1.02

$           1.47

$           0.85

$           1.41

20 %

4 %

25 %

7 %

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

2,874

-

2,874

2,819

-

2,819

2 %

2 %

2 %

2 %

(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, 2024, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect
during the respective periods.

(3)

Stock-based compensation was included in the following GAAP operating expense categories:

Three Months Ended

Three Months Ended

February 28, 2025

February 29, 2024

GAAP

Adj.

Non-GAAP

GAAP

Adj.

Non-GAAP

     Cloud services and license support

$            160

$      (160)

$               -

$            138

$      (138)

$               -

     Hardware

8

(8)

-

6

(6)

-

     Services

54

(54)

-

45

(45)

-

     Sales and marketing

200

(200)

-

179

(179)

-

     Research and development

675

(675)

-

584

(584)

-

     General and administrative

101

(101)

-

96

(96)

-

           Total stock-based compensation

$         1,198

$   (1,198)

$               -

$         1,048

$   (1,048)

$               -

(4)

Estimated future annual amortization expense related to intangible assets as of February 28, 2025 was as follows:

     Remainder of fiscal 2025

$            544

     Fiscal 2026

1,639

     Fiscal 2027

672

     Fiscal 2028

635

     Fiscal 2029

561

     Fiscal 2030

522

     Thereafter

558

           Total intangible assets, net

$         5,131

(5)

Income tax effects were calculated reflecting an effective GAAP tax rate of 14.9% and 16.2% in the third quarter of fiscal 2025 and 2024, respectively, and an effective non-GAAP tax rate of 19.9% and 18.9% in the
third quarter of fiscal 2025 and 2024, respectively. The difference in our GAAP and non-GAAP tax rates in each of the third quarters of fiscal 2025 and 2024 was primarily due to the net tax effects related to stock-
based compensation expense; acquisition related and other items, including the tax effects on amortization of intangible assets; and restructuring expense, partially offset by the net deferred tax effects
related to an income tax benefit that was previously recorded due to the partial realignment of our legal entity structure.

ORACLE  CORPORATION

Q3 FISCAL 2025 YEAR TO DATE FINANCIAL RESULTS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in millions, except per share data)

% Increase

% Increase

(Decrease)

February 28,
2025

% of

February 29,
2024

% of

(Decrease)

in Constant

Revenues

Revenues

in US $

Currency (1)

REVENUES

Cloud services and license support

$         32,331

78 %

$         29,149

75 %

11 %

12 %

Cloud license and on-premise license

3,194

8 %

3,243

8 %

(2 %)

0 %

Hardware

2,086

5 %

2,224

6 %

(6 %)

(5 %)

Services

3,885

9 %

4,058

11 %

(4 %)

(3 %)

      Total revenues

41,496

100 %

38,674

100 %

7 %

8 %

OPERATING EXPENSES

Cloud services and license support

8,226

20 %

6,905

18 %

19 %

20 %

Hardware

530

1 %

649

2 %

(18 %)

(17 %)

Services

3,430

8 %

3,665

9 %

(6 %)

(6 %)

Sales and marketing

6,345

15 %

6,161

16 %

3 %

4 %

Research and development

7,206

18 %

6,689

17 %

8 %

8 %

General and administrative

1,135

3 %

1,146

3 %

(1 %)

0 %

Amortization of intangible assets

1,763

4 %

2,267

6 %

(22 %)

(22 %)

Acquisition related and other

72

0 %

214

0 %

(66 %)

(66 %)

Restructuring

220

1 %

311

1 %

(29 %)

(29 %)

      Total operating expenses

28,927

70 %

28,007

72 %

3 %

4 %

OPERATING INCOME

12,569

30 %

10,667

28 %

18 %

19 %

Interest expense

(2,600)

(6 %)

(2,636)

(7 %)

(1 %)

(1 %)

Non-operating income (expenses), net

39

0 %

(72)

0 %

*

*

INCOME BEFORE INCOME TAXES

10,008

24 %

7,959

21 %

26 %

28 %

Provision for income taxes

992

2 %

636

2 %

56 %

59 %

NET INCOME

$           9,016

22 %

$           7,323

19 %

23 %

25 %

EARNINGS PER SHARE:

Basic

$              3.24

$              2.67

Diluted

$              3.15

$              2.60

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Basic

2,783

2,741

Diluted

2,865

2,820

(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, 2024, which was the last day of our prior fiscal year, rather than the actual exchange rates
in effect during the respective periods. Movements in international currencies relative to the United States dollar during the nine months ended February
28, 2025 compared with the corresponding prior year period decreased each of our total revenues, total operating expenses and operating income by 1
percentage point.

ORACLE  CORPORATION

Q3 FISCAL 2025 YEAR TO DATE FINANCIAL RESULTS

RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)

($ in millions, except per share data)

Nine Months Ended

% Increase
(Decrease)
in US $

% Increase (Decrease) in
Constant Currency (2)

February 28,
2025

February 28,
2025

February 29,
2024

February 29,
2024

GAAP

Non-GAAP

GAAP

Non-GAAP

GAAP

Adj.

Non-GAAP

GAAP

Adj.

Non-GAAP

TOTAL REVENUES

$       41,496

$           -

$       41,496

$       38,674

$           -

$       38,674

7 %

7 %

8 %

8 %

TOTAL OPERATING EXPENSES

$       28,927

$   (5,429)

$       23,498

$       28,007

$   (5,719)

$       22,288

3 %

5 %

4 %

6 %

     Stock-based compensation (3)

3,374

(3,374)

-

2,927

(2,927)

-

15 %

*

15 %

*

     Amortization of intangible assets (4)

1,763

(1,763)

-

2,267

(2,267)

-

(22 %)

*

(22 %)

*

     Acquisition related and other

72

(72)

-

214

(214)

-

(66 %)

*

(66 %)

*

     Restructuring

220

(220)

-

311

(311)

-

(29 %)

*

(29 %)

*

OPERATING INCOME

$       12,569

$     5,429

$       17,998

$       10,667

$     5,719

$       16,386

18 %

10 %

19 %

11 %

OPERATING MARGIN %

30 %

43 %

28 %

42 %

271 bp.

100 bp.

284 bp.

104 bp.

INCOME TAX EFFECTS (5)

$            992

$     2,042

$         3,034

$            636

$     1,939

$         2,575

56 %

18 %

59 %

19 %

NET INCOME

$         9,016

$     3,387

$       12,403

$         7,323

$     3,780

$       11,103

23 %

12 %

25 %

13 %

DILUTED EARNINGS PER SHARE

$           3.15

$           4.33

$           2.60

$           3.94

21 %

10 %

23 %

11 %

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

2,865

-

2,865

2,820

-

2,820

2 %

2 %

2 %

2 %

(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, 2024, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during the
respective periods.

(3)

Stock-based compensation was included in the following GAAP operating expense categories:

Nine Months Ended

Nine Months Ended

February 28, 2025

February 29, 2024

GAAP

Adj.

Non-GAAP

GAAP

Adj.

Non-GAAP

     Cloud services and license support

$            459

$      (459)

$               -

$            386

$      (386)

$               -

     Hardware

21

(21)

-

17

(17)

-

     Services

150

(150)

-

123

(123)

-

     Sales and marketing

556

(556)

-

488

(488)

-

     Research and development

1,902

(1,902)

-

1,642

(1,642)

-

     General and administrative

286

(286)

-

271

(271)

-

           Total stock-based compensation

$         3,374

$   (3,374)

$               -

$         2,927

$   (2,927)

$               -

(4)

Estimated future annual amortization expense related to intangible assets as of February 28, 2025 was as follows:

     Remainder of fiscal 2025

$            544

     Fiscal 2026

1,639

     Fiscal 2027

672

     Fiscal 2028

635

     Fiscal 2029

561

     Fiscal 2030

522

     Thereafter

558

           Total intangible assets, net

$         5,131

(5)

Income tax effects were calculated reflecting an effective GAAP tax rate of 9.9% and 8.0% in the first nine months of fiscal 2025 and 2024, respectively, and an effective non-GAAP tax rate of 19.7% and 18.8% in the
first nine months of fiscal 2025 and 2024, respectively. The difference in our GAAP and non-GAAP tax rates in each of the first nine months of fiscal 2025 and 2024 was primarily due to the net tax effects related to
stock-based compensation expense; acquisition related and other items, including the tax effects on amortization of intangible assets; and restructuring expense, partially offset by the net deferred tax effects related
to an income tax benefit that was previously recorded due to the partial realignment of our legal entity structure.

Not meaningful

ORACLE  CORPORATION

Q3 FISCAL 2025 FINANCIAL RESULTS

CONDENSED CONSOLIDATED BALANCE SHEETS

($ in millions)

May 31,
2024

ASSETS

Current Assets:

Cash and cash equivalents

$               17,406

$               10,454

Marketable securities

417

207

Trade receivables, net

8,051

7,874

Prepaid expenses and other current assets

4,242

4,019

          Total Current Assets

30,116

22,554

Non-Current Assets:

   Property, plant and equipment, net

31,970

21,536

   Intangible assets, net

5,131

6,890

   Goodwill, net

62,171

62,230

   Deferred tax assets

11,799

12,273

   Other non-current assets

20,191

15,493

          Total Non-Current Assets

131,262

118,422

TOTAL ASSETS

$            161,378

$            140,976

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

Notes payable and other borrowings, current

$                 8,167

$               10,605

Accounts payable

2,423

2,357

Accrued compensation and related benefits

1,839

1,916

Deferred revenues

9,019

9,313

Other current liabilities

8,175

7,353

          Total Current Liabilities

29,623

31,544

Non-Current Liabilities:

Notes payable and other borrowings, non-current

88,109

76,264

Income taxes payable

9,813

10,817

Deferred tax liabilities

2,208

3,692

Other non-current liabilities

14,364

9,420

          Total Non-Current Liabilities

114,494

100,193

Stockholders' Equity

17,261

9,239

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$            161,378

$            140,976

     ORACLE  CORPORATION

Q3 FISCAL 2025 FINANCIAL RESULTS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

($ in millions)

Nine Months Ended

February 28,
2025

February 29,
2024

Cash Flows From Operating Activities:

Net income

$        9,016

$        7,323

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

Depreciation

2,715

2,318

Amortization of intangible assets

1,763

2,267

Deferred income taxes

(1,097)

(1,755)

Stock-based compensation

3,374

2,927

Other, net

422

631

Changes in operating assets and liabilities:

Increase in trade receivables, net

(312)

(409)

Decrease in prepaid expenses and other assets

603

457

Decrease in accounts payable and other liabilities

(633)

(682)

Decrease in income taxes payable

(1,222)

(788)

Increase in deferred revenues

35

303

Net cash provided by operating activities

14,664

12,592

Cash Flows From Investing Activities:

Purchases of marketable securities and other investments

(838)

(674)

Proceeds from sales and maturities of marketable securities and other investments

444

207

Acquisitions, net of cash acquired

-

(59)

Capital expenditures

(12,135)

(4,068)

Net cash used for investing activities

(12,529)

(4,594)

Cash Flows From Financing Activities:

Payments for repurchases of common stock

(450)

(1,050)

Proceeds from issuances of common stock

520

454

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

(900)

(1,865)

Payments of dividends to stockholders

(3,340)

(3,289)

(Repayments of) proceeds from issuances of commercial paper, net

(396)

936