Contact:

Ken Bond

Deborah Hellinger

Oracle Investor Relations

Oracle Corporate Communications

1.650.607.0349

1.212.508.7935

ken.bond@oracle.com

deborah.hellinger@oracle.com

•

Total Revenue up 6% to $10.4 Billion

•

Total Cloud Revenue (IaaS plus SaaS) up 22% to $2.7 Billion

•

Fusion ERP cloud revenue up 35%, NetSuite ERP cloud revenue up 29%

•

A sample list of customers which purchased Oracle Cloud services during the quarter will be available at www.oracle.com/customers/earnings/.

•

A list of recent technical innovations and announcements is available at www.oracle.com/news/.

•

To learn what industry analysts have been saying about Oracle’s products and services see www.oracle.com/corporate/analyst-reports.html.

Three Months Ended November 30,

% Increase

% Increase

(Decrease)

2021

% of

Revenues

2020

% of

Revenues

(Decrease)

in US $

in Constant

Currency (1)

REVENUES

Cloud services and license support

$

7,554

73%

$

7,112

72%

6%

6%

Cloud license and on-premise license

1,237

12%

1,092

11%

13%

16%

Hardware

767

7%

844

9%

(9%)

(8%)

Services

802

8%

752

8%

7%

7%

Total revenues

10,360

100%

9,800

100%

6%

6%

OPERATING EXPENSES

Cloud services and license support

1,259

12%

1,064

11%

18%

19%

Hardware

229

2%

244

2%

(6%)

(5%)

Services

671

7%

631

6%

6%

7%

Sales and marketing

1,954

19%

1,836

19%

6%

7%

Research and development

1,754

17%

1,601

16%

10%

9%

General and administrative

319

3%

324

3%

(2%)

(2%)

Amortization of intangible assets

299

3%

345

4%

(13%)

(13%)

Acquisition related and other (2)

4,667

45%

76

1%

*

*

Restructuring

32

0%

96

1%

(67%)

(67%)

Total operating expenses

11,184

108%

6,217

63%

80%

79%

OPERATING (LOSS) INCOME

(824

)

(8%)

3,583

37%

*

*

Interest expense

(679

)

(6%)

(600

)

(7%)

13%

13%

Non-operating income (expenses), net

7

0%

(11

)

0%

*

*

(LOSS) INCOME BEFORE INCOME TAXES

(1,496

)

(14%)

2,972

30%

*

*

Benefit from (provision for) income taxes

249

2%

(530

)

(5%)

*

*

NET (LOSS) INCOME

$

(1,247

)

(12%)

$

2,442

25%

*

*

(LOSS) EARNINGS PER SHARE:

Basic

$

(0.46

)

$

0.82

Diluted

$

(0.46

)

$

0.80

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Basic

2,694

2,977

Diluted

2,694

3,046

(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, 2021, 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 November 30, 2021 compared with the corresponding prior year period increased our total operating expenses by 1 percentage point.

(2)

Acquisition related and other for the three months ended November 30, 2021 included the impact of litigation related charges totaling $4.7 billion.

*

Not meaningful

Three Months Ended November 30,

% Increase (Decrease)

in US $

% Increase (Decrease) in

Constant Currency (2)

2021

GAAP

Adj.

2021

Non-GAAP

2020

GAAP

Adj.

2020

Non-GAAP

GAAP

Non-GAAP

GAAP

Non-GAAP

TOTAL REVENUES

$

10,360

$

—

$

10,360

$

9,800

$

—

$

9,800

6%

6%

6%

6%

TOTAL OPERATING EXPENSES

$

11,184

$

(5,679

)

$

5,505

$

6,217

$

(1,005

)

$

5,212

80%

6%

79%

6%

Stock-based compensation (3)

681

(681

)

—

488

(488

)

—

39%

*

39%

*

Amortization of intangible assets (4)

299

(299

)

—

345

(345

)

—

(13%)

*

(13%)

*

Acquisition related and other

4,667

(4,667

)

—

76

(76

)

—

*

*

*

*

Restructuring

32

(32

)

—

96

(96

)

—

(67%)

*

(67%)

*

OPERATING (LOSS) INCOME

$

(824

)

$

5,679

$

4,855

$

3,583

$

1,005

$

4,588

*

6%

*

7%

OPERATING MARGIN %

(8%)

47%

37%

47%

*

5 bp.

*

14 bp.

INCOME TAX EFFECTS (5)

$

249

$

(1,052

)

$

(803

)

$

(530

)

$

(212

)

$

(742

)

*

8%

*

9%

NET (LOSS) INCOME

$

(1,247

)

$

4,627

$

3,380

$

2,442

$

793

$

3,235

*

4%

*

5%

DILUTED (LOSS) EARNINGS PER SHARE (6)

$

(0.46

)

$

1.21

$

0.80

$

1.06

*

14%

*

15%

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (6)

2,694

91

2,785

3,046

—

3,046

(12%)

(9%)

(12%)

(9%)

(1)

This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A.

(2)

We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in effect on May 31, 2021, 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

November 30, 2021

Three Months Ended

November 30, 2020

GAAP

Adj.

Non-GAAP

GAAP

Adj.

Non-GAAP

Cloud services and license support

$

50

$

(50

)

$

—

$

36

$

(36

)

$

—

Hardware

4

(4

)

—

3

(3

)

—

Services

18

(18

)

—

14

(14

)

—

Sales and marketing

120

(120

)

—

80

(80

)

—

Research and development

423

(423

)

—

314

(314

)

—

General and administrative

66

(66

)

—

41

(41

)

—

Total stock-based compensation

$

681

$

(681

)

$

—

$

488

$

(488

)

$

—

(4)

Estimated future annual amortization expense related to intangible assets as of November 30, 2021 was as follows:

Remainder of fiscal 2022

$

534

Fiscal 2023

716

Fiscal 2024

473

Fiscal 2025

124

Fiscal 2026

24

Fiscal 2027

6

Thereafter

4

Total intangible assets, net

$

1,881

(5)

Income tax effects were calculated reflecting an effective GAAP tax rate of (16.6%) and 17.8% in the second quarter of fiscal 2022 and 2021, respectively, and an effective non-GAAP tax rate of 19.2% and 18.7% in the second quarter of fiscal 2022 and 2021, respectively. The difference in our GAAP and non-GAAP tax rates in the second quarter of fiscal 2022 was primarily due to the net tax effects related to stock-based compensation expense and acquisition related and other items, including the net tax effects for litigation related charges (refer to Appendix A for additional information), and the net tax effects on amortization of intangible assets, 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. The difference in our GAAP and non-GAAP tax rates in the second quarter of fiscal 2021 was primarily due to the net tax effects on stock-based compensation expense and acquisition related and other items, including the tax effects on amortization of intangible assets.

(6)

In the second quarter of fiscal 2022, GAAP diluted loss per share was calculated excluding the dilutive effects of 91 million shares related to employee stock plans as the effect would be anti-dilutive.

*

Not meaningful

Six Months Ended November 30,

% Increase

% Increase

(Decrease)

2021

% of

Revenues

2020

% of

Revenues

(Decrease)

in US $

in Constant

Currency (1)

REVENUES

Cloud services and license support

$

14,925

74%

$

14,059

73%

6%

6%

Cloud license and on-premise license

2,049

10%

1,978

10%

4%

4%

Hardware

1,530

8%

1,658

9%

(8%)

(8%)

Services

1,583

8%

1,472

8%

8%

7%

Total revenues

20,087

100%

19,167

100%

5%

4%

OPERATING EXPENSES

Cloud services and license support

2,472

12%

2,075

11%

19%

19%

Hardware

474

2%

490

3%

(3%)

(3%)

Services

1,315

7%

1,254

7%

5%

4%

Sales and marketing

3,808

19%

3,690

19%

3%

3%

Research and development

3,438

17%

3,190

17%

8%

7%

General and administrative

618

3%

619

3%

0%

(1%)

Amortization of intangible assets

603

3%

690

4%

(13%)

(13%)

Acquisition related and other (2)

4,687

24%

95

0%

*

*

Restructuring

70

0%

270

1%

(74%)

(74%)

Total operating expenses

17,485

87%

12,373

65%

41%

40%

OPERATING INCOME

2,602

13%

6,794

35%

(62%)

(60%)

Interest expense

(1,384

)

(7%)

(1,214

)

(6%)

14%

14%

Non-operating expenses, net

(34

)

0%

(13

)

0%

158%

97%

INCOME BEFORE INCOME TAXES

1,184

6%

5,567

29%

(79%)

(76%)

Benefit from (provision for) income taxes

25

0%

(874

)

(5%)

*

*

NET INCOME

$

1,209

6%

$

4,693

24%

(74%)

(71%)

EARNINGS PER SHARE:

Basic

$

0.44

$

1.56

Diluted

$

0.43

$

1.53

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Basic

2,731

3,009

Diluted

2,823

3,076

(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, 2021, 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 six months ended November 30, 2021 compared with the corresponding prior year period increased our total revenues and total operating expenses, each by 1 percentage point, and decreased our operating income by 2 percentage points.

(2)

Acquisition related and other for the six months ended November 30, 2021 included the impact of litigation related charges totaling $4.7 billion.

*

Not meaningful

Six Months Ended November 30,

% Increase (Decrease)

in US $

% Increase  (Decrease) in

Constant Currency (2)

2021

GAAP

Adj.

2021

Non-GAAP

2020

GAAP

Adj.

2020

Non-GAAP

GAAP

Non-GAAP

GAAP

Non-GAAP

TOTAL REVENUES

$

20,087

$

—

$

20,087

$

19,167

$

1

$

19,168

5%

5%

4%

4%

Cloud services and license support

14,925

—

14,925

14,059

1

14,060

6%

6%

6%

6%

TOTAL OPERATING EXPENSES

$

17,485

$

(6,586

)

$

10,899

$

12,373

$

(1,971

)

$

10,402

41%

5%

40%

4%

Stock-based compensation (3)

1,226

(1,226

)

—

916

(916

)

—

34%

*

34%

*

Amortization of intangible assets (4)

603

(603

)

—

690

(690

)

—

(13%)

*

(13%)

*

Acquisition related and other

4,687

(4,687

)

—

95

(95

)

—

*

*

*

*

Restructuring

70

(70

)

—

270

(270

)

—

(74%)

*

(74%)

*

OPERATING INCOME

$

2,602

$

6,586

$

9,188

$

6,794

$

1,972

$

8,766

(62%)

5%

(60%)

4%

OPERATING MARGIN %

13%

46%

35%

46%

*

1 bp.

*

0 bp.

INCOME TAX EFFECTS (5)

$

25

$

(1,473

)

$

(1,448

)

$

(874

)

$

(548

)

$

(1,422

)

*

2%

*

1%

NET INCOME

$

1,209

$

5,113

$

6,322

$

4,693

$

1,424

$

6,117

(74%)

3%

(71%)

3%

DILUTED EARNINGS PER SHARE

$

0.43

$

2.24

$

1.53

$

1.99

(72%)

13%

(68%)

12%

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

2,823

—

2,823

3,076

—

3,076

(8%)

(8%)

(8%)

(8%)

(1)

This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A.

(2)

We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in effect on May 31, 2021, 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:

Six Months Ended

November 30, 2021

Six Months Ended

November 30, 2020

GAAP

Adj.

Non-GAAP

GAAP

Adj.

Non-GAAP

Cloud services and license support

$

90

$

(90

)

$

—

$

66

$

(66

)

$

—

Hardware

7

(7

)

—

6

(6

)

—

Services

32

(32

)

—

26

(26

)

—

Sales and marketing

215

(215

)

—

151

(151

)

—

Research and development

767

(767

)

—

590

(590

)

—

General and administrative

115

(115

)

—

77

(77

)

—

Total stock-based compensation

$

1,226

$

(1,226

)

$

—

$

916

$

(916

)

$

—

(4)

Estimated future annual amortization expense related to intangible assets as of November 30, 2021 was as follows:

Remainder of fiscal 2022

$

534

Fiscal 2023

716

Fiscal 2024

473

Fiscal 2025

124

Fiscal 2026

24

Fiscal 2027

6

Thereafter

4

Total intangible assets, net

$

1,881

(5)

Income tax effects were calculated reflecting an effective GAAP tax rate of (2.1%) and 15.7% in the first half of fiscal 2022 and 2021, respectively, and an effective non-GAAP tax rate of 18.6% and 18.9% in the first half of fiscal 2022 and 2021, respectively. The difference in our GAAP and non-GAAP tax rates in the first half of fiscal 2022 was primarily due to the net tax effects related to stock-based compensation expense and acquisition related and other items, including the net tax effects for litigation related charges (refer to Appendix A for additional information), and the net tax effects on amortization of intangible assets, 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. The difference in our GAAP and non-GAAP tax rates in the first half of fiscal 2021 was primarily due to the net tax effects on stock-based compensation expense and acquisition related and other items, including the tax effects on amortization of intangible assets.

*

Not meaningful

November 30,

2021

May 31,

2021

ASSETS

Current Assets:

Cash and cash equivalents

$

17,938

$

30,098

Marketable securities

4,900

16,456

Trade receivables, net

4,462

5,409

Prepaid expenses and other current assets

3,778

3,604

Total Current Assets

31,078

55,567

Non-Current Assets:

Property, plant and equipment, net

8,029

7,049

Intangible assets, net

1,881

2,430

Goodwill, net

43,842

43,935

Deferred tax assets

13,265

13,636

Other non-current assets

8,802

8,490

Total Non-Current Assets

75,819

75,540

TOTAL ASSETS

$

106,897

$

131,107

LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY

Current Liabilities:

Notes payable, current

$

4,998

$

8,250

Accounts payable

1,034

745

Accrued compensation and related benefits

1,503

2,017

Deferred revenues

7,937

8,775

Other current liabilities

3,409

4,377

Total Current Liabilities

18,881

24,164

Non-Current Liabilities:

Notes payable and other borrowings, non-current

73,433

75,995

Income taxes payable

12,122

12,345

Deferred tax liabilities

6,777

7,864

Other non-current liabilities

5,342

4,787

Total Non-Current Liabilities

97,674

100,991

Stockholders’ (Deficit) Equity

(9,658

)

5,952

TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY

$

106,897

$

131,107

Six Months Ended November 30,

2021

2020

Cash Flows From Operating Activities:

Net income

$

1,209

$

4,693

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

Depreciation

913

742

Amortization of intangible assets

603

690

Deferred income taxes

(820

)

(43

)

Stock-based compensation

1,226

916

Other, net

(176

)

184

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

Decrease in trade receivables, net

789

1,263

Decrease in prepaid expenses and other assets

263

545

Decrease in accounts payable and other liabilities

(918

)

(248

)

Decrease in income taxes payable

(849

)

(1,243

)

Decrease in deferred revenues

(531

)

(158

)

Net cash provided by operating activities

1,709

7,341

Cash Flows From Investing Activities:

Purchases of marketable securities and other investments

(9,631

)

(15,578

)

Proceeds from sales and maturities of marketable securities and other investments

21,617

10,779

Acquisitions, net of cash acquired

(50

)

—

Capital expenditures

(1,987

)

(1,004

)

Net cash provided by (used for) investing activities

9,949

(5,803

)

Cash Flows From Financing Activities:

Payments for repurchases of common stock

(15,001

)

(8,962

)

Proceeds from issuances of common stock

305

772

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

(890

)

(520

)

Payments of dividends to stockholders

(1,748

)

(1,447

)

Repayments of borrowings

(5,750

)

(1,000

)

Other, net

(437

)

110

Net cash used for financing activities

(23,521

)

(11,047

)

Effect of exchange rate changes on cash and cash equivalents

(297

)

271

Net decrease in cash and cash equivalents

(12,160

)

(9,238

)

Cash and cash equivalents at beginning of period

30,098

37,239

Cash and cash equivalents at end of period

$

17,938

$

28,001

Fiscal 2021

Fiscal 2022

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

GAAP Operating Cash Flow

$

13,092

$

13,967

$

14,659

$

15,887

$

15,325

$

10,255

Capital Expenditures

(1,614

)

(1,833

)

(1,851

)

(2,135

)

(2,761

)

(3,118

)

Free Cash Flow

$

11,478

$

12,134

$

12,808

$

13,752

$

12,564

$

7,137

% Growth over prior year

(6%)

(1%)

3%

19%

9%

(41%)

GAAP Net Income

$

10,249

$

10,380

$

12,830

$

13,746

$

13,952

$

10,262

Free Cash Flow as a % of Net Income

112%

117%

100%

100%

90%

70%

(1)

To supplement our statements of cash flows presented on a GAAP basis, we use non-GAAP measures of cash flows on a trailing 4-quarter basis to analyze cash flow generated from operations. We believe free cash flow is also useful as one of the bases for comparing our performance with our competitors. The presentation of non-GAAP free cash flow is not meant to be considered in isolation or as an alternative to net income as an indicator of our performance, or as an alternative to cash flows from operating activities as a measure of liquidity.

Fiscal 2021

Fiscal 2022

Q1

Q2

Q3

Q4

TOTAL

Q1

Q2

Q3

Q4

TOTAL

REVENUES BY OFFERINGS

Cloud services and license support

$

6,947

$

7,112

$

7,252

$

7,389

$

28,700

$

7,371

$

7,554

$

14,925

Cloud license and on-premise license

886

1,092

1,276

2,144

5,399

813

1,237

2,049

Hardware

814

844

820

882

3,359

763

767

1,530

Services

720

752

737

812

3,021

781

802

1,583

Total revenues

$

9,367

$

9,800

$

10,085

$

11,227

$

40,479

$

9,728

$

10,360

$

20,087

AS REPORTED REVENUE GROWTH RATES

Cloud services and license support

2%

4%

5%

8%

5%

6%

6%

6%

Cloud license and on-premise license

9%

(3%)

4%

9%

5%

(8%)

13%

4%

Hardware

0%

(3%)

(4%)

(2%)

(2%)

(6%)

(9%)

(8%)

Services

(8%)

(7%)

(5%)

11%

(3%)

8%

7%

8%

Total revenues

2%

2%

3%

8%

4%

4%

6%

5%

CONSTANT CURRENCY REVENUE GROWTH RATES (2)