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

•

Q2 GAAP Earnings per Share $0.63, Non-GAAP Earnings per Share $1.21

•

Q2 Total Revenue $12.3 billion, up 18% in USD, up 25% in constant currency

•

Q2 Cloud Revenue (IaaS plus SaaS) $3.8 billion, up 43% in USD, up 48% in constant currency

•

Q2 Cloud Infrastructure (IaaS) Revenue $1.0 billion, up 53% in USD, up 59% in constant currency

•

Q2 Cloud Application (SaaS) Revenue $2.8 billion, up 40% in USD, up 45% in constant currency

•

Q2 Fusion Cloud ERP (SaaS) Revenue $0.6 billion, up 23% in USD, up 28% in constant currency

•

Q2 NetSuite Cloud ERP (SaaS) Revenue $0.6 billion, up 25% in USD, up 29% in constant currency

•

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)

2022

% of

Revenues

2021

% of

Revenues

(Decrease)

in US $

in Constant

Currency (1)

REVENUES

Cloud services and license support

$

8,598

70%

$

7,554

73%

14%

20%

Cloud license and on-premise license

1,435

12%

1,237

12%

16%

23%

Hardware

850

7%

767

7%

11%

16%

Services

1,392

11%

802

8%

74%

83%

Total revenues

12,275

100%

10,360

100%

18%

25%

OPERATING EXPENSES

Cloud services and license support

1,891

15%

1,259

12%

50%

55%

Hardware

286

2%

229

2%

25%

31%

Services

1,181

10%

671

7%

76%

85%

Sales and marketing

2,216

18%

1,954

19%

13%

18%

Research and development

2,158

18%

1,754

17%

23%

26%

General and administrative

366

3%

319

3%

15%

19%

Amortization of intangible assets

907

7%

299

3%

203%

204%

Acquisition related and other (2)

62

1%

4,667

45%

(99%)

(99%)

Restructuring

137

1%

32

0%

330%

376%

Total operating expenses

9,204

75%

11,184

108%

(18%)

(15%)

OPERATING INCOME (LOSS)

3,071

25%

(824

)

(8%)

*

*

Interest expense

(856

)

(7%)

(679

)

(6%)

26%

26%

Non-operating (expenses) income, net

(71

)

(1%)

7

0%

*

*

INCOME (LOSS) BEFORE INCOME TAXES

2,144

17%

(1,496

)

(14%)

*

*

(Provision for) benefit from income taxes

(403

)

(3%)

249

2%

*

*

NET INCOME (LOSS)

$

1,741

14%

$

(1,247

)

(12%)

*

*

EARNINGS (LOSS) PER SHARE:

Basic

$

0.65

$

(0.46

)

Diluted

$

0.63

$

(0.46

)

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Basic

2,695

2,694

Diluted

2,746

2,694

(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, 2022, 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, 2022 compared with the corresponding prior year period decreased our total revenues by 7 percentage points and total operating expenses by 3 percentage points.

(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)

2022

GAAP

Adj.

2022

Non-GAAP

2021

GAAP

Adj.

2021

Non-GAAP

GAAP

Non-GAAP

GAAP

Non-GAAP

TOTAL REVENUES

$

12,275

$

—

$

12,275

$

10,360

$

—

$

10,360

18%

18%

25%

25%

TOTAL OPERATING EXPENSES

$

9,204

$

(2,015

)

$

7,189

$

11,184

$

(5,679

)

$

5,505

(18%)

31%

(15%)

36%

Stock-based compensation (3)

909

(909

)

—

681

(681

)

—

33%

*

33%

*

Amortization of intangible assets (4)

907

(907

)

—

299

(299

)

—

203%

*

204%

*

Acquisition related and other

62

(62

)

—

4,667

(4,667

)

—

(99%)

*

(99%)

*

Restructuring

137

(137

)

—

32

(32

)

—

330%

*

376%

*

OPERATING INCOME (LOSS)

$

3,071

$

2,015

$

5,086

$

(824

)

$

5,679

$

4,855

*

5%

*

12%

OPERATING MARGIN %

25%

41%

(8%)

47%

*

(543) bp.

*

(485) bp.

INCOME TAX EFFECTS (5)

$

(403

)

$

(444

)

$

(847

)

$

249

$

(1,052

)

$

(803

)

*

5%

*

14%

NET INCOME (LOSS)

$

1,741

$

1,571

$

3,312

$

(1,247

)

$

4,627

$

3,380

*

(2%)

*

6%

DILUTED EARNINGS (LOSS) PER SHARE (6)

$

0.63

$

1.21

$

(0.46

)

$

1.21

*

(1%)

*

7%

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (6)

2,746

—

2,746

2,694

91

2,785

2%

(1%)

2%

(1%)

(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, 2022, 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, 2022

Three Months Ended

November 30, 2021

GAAP

Adj.

Non-GAAP

GAAP

Adj.

Non-GAAP

Cloud services and license support

$

113

$

(113

)

$

—

$

50

$

(50

)

$

—

Hardware

5

(5

)

—

4

(4

)

—

Services

35

(35

)

—

18

(18

)

—

Sales and marketing

151

(151

)

—

120

(120

)

—

Research and development

510

(510

)

—

423

(423

)

—

General and administrative

95

(95

)

—

66

(66

)

—

Total stock-based compensation

$

909

$

(909

)

$

—

$

681

$

(681

)

$

—

(4)

Estimated future annual amortization expense related to intangible assets as of November 30, 2022 was as follows:

Remainder of fiscal 2023

$

1,755

Fiscal 2024

2,995

Fiscal 2025

2,283

Fiscal 2026

1,620

Fiscal 2027

664

Fiscal 2028

635

Thereafter

1,641

Total intangible assets, net

$

11,593

(5)

Income tax effects were calculated reflecting an effective GAAP tax rate of 18.8% and (16.6%) in the second quarter of fiscal 2023 and 2022, respectively, and an effective non-GAAP tax rate of 20.4% and 19.2% in the second quarter of fiscal 2023 and 2022, respectively. The difference in our GAAP and non-GAAP tax rates in the second quarter of fiscal 2023 was primarily due to the net tax effects related to stock-based compensation expense and acquisition related and other items, including the 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 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.

(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)

2022

% of

Revenues

2021

% of

Revenues

(Decrease)

in US $

in Constant

Currency (1)

REVENUES

Cloud services and license support

$

17,015

72%

$

14,925

74%

14%

20%

Cloud license and on-premise license

2,339

10%

2,049

10%

14%

21%

Hardware

1,613

7%

1,530

8%

5%

11%

Services

2,753

11%

1,583

8%

74%

83%

Total revenues

23,720

100%

20,087

100%

18%

24%

OPERATING EXPENSES

Cloud services and license support

3,626

15%

2,472

12%

47%

52%

Hardware

536

2%

474

2%

13%

18%

Services

2,233

9%

1,315

7%

70%

79%

Sales and marketing

4,393

19%

3,808

19%

15%

20%

Research and development

4,251

18%

3,438

17%

24%

26%

General and administrative

777

3%

618

3%

26%

30%

Amortization of intangible assets

1,826

8%

603

3%

203%

204%

Acquisition related and other (2)

103

1%

4,687

24%

(98%)

(98%)

Restructuring

281

1%

70

0%

301%

340%

Total operating expenses

18,026

76%

17,485

87%

3%

6%

OPERATING INCOME

5,694

24%

2,602

13%

119%

159%

Interest expense

(1,643

)

(7%)

(1,384

)

(7%)

19%

19%

Non-operating expenses, net

(251

)

(1%)

(34

)

0%

638%

658%

INCOME BEFORE INCOME TAXES

3,800

16%

1,184

6%

221%

359%

(Provision for) benefit from income taxes

(511

)

(2%)

25

0%

*

*

NET INCOME

$

3,289

14%

$

1,209

6%

172%

289%

EARNINGS PER SHARE:

Basic

$

1.22

$

0.44

Diluted

$

1.20

$

0.43

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Basic

2,690

2,731

Diluted

2,747

2,823

(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, 2022, 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, 2022 compared with the corresponding prior year period decreased our total revenues by 6 percentage points, total operating expenses by 3 percentage points and operating income by 40 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)

2022

GAAP

Adj.

2022

Non-GAAP

2021

GAAP

Adj.

2021

Non-GAAP

GAAP

Non-GAAP

GAAP

Non-GAAP

TOTAL REVENUES

$

23,720

$

—

$

23,720

$

20,087

$

—

$

20,087

18%

18%

24%

24%

TOTAL OPERATING EXPENSES

$

18,026

$

(3,869

)

$

14,157

$

17,485

$

(6,586

)

$

10,899

3%

30%

6%

35%

Stock-based compensation (3)

1,659

(1,659

)

—

1,226

(1,226

)

—

35%

*

35%

*

Amortization of intangible assets (4)

1,826

(1,826

)

—

603

(603

)

—

203%

*

204%

*

Acquisition related and other

103

(103

)

—

4,687

(4,687

)

—

(98%)

*

(98%)

*

Restructuring

281

(281

)

—

70

(70

)

—

301%

*

340%

*

OPERATING INCOME

$

5,694

$

3,869

$

9,563

$

2,602

$

6,586

$

9,188

119%

4%

159%

11%

OPERATING MARGIN %

24%

40%

13%

46%

1,105 bp.

(543) bp.

1,279 bp.

(484) bp.

INCOME TAX EFFECTS (5)

$

(511

)

$

(1,018

)

$

(1,529

)

$

25

$

(1,473

)

$

(1,448

)

*

6%

*

14%

NET INCOME

$

3,289

$

2,851

$

6,140

$

1,209

$

5,113

$

6,322

172%

(3%)

289%

5%

DILUTED EARNINGS PER SHARE

$

1.20

$

2.24

$

0.43

$

2.24

179%

0%

300%

8%

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

2,747

—

2,747

2,823

—

2,823

(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 rates in effect on May 31, 2022, 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, 2022

Six Months Ended

November 30, 2021

GAAP

Adj.

Non-GAAP

GAAP

Adj.

Non-GAAP

Cloud services and license support

$

204

$

(204

)

$

—

$

90

$

(90

)

$

—

Hardware

9

(9

)

—

7

(7

)

—

Services

60

(60

)

—

32

(32

)

—

Sales and marketing

275

(275

)

—

215

(215

)

—

Research and development

932

(932

)

—

767

(767

)

—

General and administrative

179

(179

)

—

115

(115

)

—

Total stock-based compensation

$

1,659

$

(1,659

)

$

—

$

1,226

$

(1,226

)

$

—

(4)

Estimated future annual amortization expense related to intangible assets as of November 30, 2022 was as follows:

Remainder of fiscal 2023

$

1,755

Fiscal 2024

2,995

Fiscal 2025

2,283

Fiscal 2026

1,620

Fiscal 2027

664

Fiscal 2028

635

Thereafter

1,641

Total intangible assets, net

$

11,593

(5)

Income tax effects were calculated reflecting an effective GAAP tax rate of 13.4% and (2.1%) in the first half of fiscal 2023 and 2022, respectively, and an effective non-GAAP tax rate of 19.9% and 18.6% in the first half of fiscal 2023 and 2022, respectively. The difference in our GAAP and non-GAAP tax rates in the first half of fiscal 2023 was primarily due to the net tax effects related to stock-based compensation expense and acquisition related and other items, including the 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 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.

*

Not meaningful

November 30,

2022

May 31,

2022

ASSETS

Current Assets:

Cash and cash equivalents

$

6,813

$

21,383

Marketable securities

537

519

Trade receivables, net

6,197

5,953

Prepaid expenses and other current assets

4,014

3,778

Total Current Assets

17,561

31,633

Non-Current Assets:

Property, plant and equipment, net

14,351

9,716

Intangible assets, net

11,593

1,440

Goodwill, net

61,513

43,811

Deferred tax assets

12,091

12,782

Other non-current assets

11,360

9,915

Total Non-Current Assets

110,908

77,664

TOTAL ASSETS

$

128,469

$

109,297

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities:

Notes payable and other borrowings, current

$

9,746

$

3,749

Accounts payable

1,647

1,317

Accrued compensation and related benefits

1,780

1,944

Deferred revenues

8,705

8,357

Other current liabilities

5,228

4,144

Total Current Liabilities

27,106

19,511

Non-Current Liabilities:

Notes payable and other borrowings, non-current

81,173

72,110

Income taxes payable

11,128

12,210

Deferred tax liabilities

7,165

6,031

Other non-current liabilities

5,673

5,203

Total Non-Current Liabilities

105,139

95,554

Stockholders’ Deficit

(3,776

)

(5,768

)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT

$

128,469

$

109,297

Six Months Ended November 30,

2022

2021

Cash Flows From Operating Activities:

Net income

$

3,289

$

1,209

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

Depreciation

1,138

913

Amortization of intangible assets

1,826

603

Deferred income taxes

(852

)

(820

)

Stock-based compensation

1,659

1,226

Other, net

289

(176

)

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

Decrease in trade receivables, net

516

789

Decrease in prepaid expenses and other assets

121

263

Decrease in accounts payable and other liabilities

(785

)

(918

)

Decrease in income taxes payable

(327

)

(849

)

Increase (decrease) in deferred revenues

369

(531

)

Net cash provided by operating activities

7,243

1,709

Cash Flows From Investing Activities:

Purchases of marketable securities and other investments

(603

)

(9,631

)

Proceeds from sales and maturities of marketable securities and other investments

462

21,617

Acquisitions, net of cash acquired

(27,799

)

(50

)

Capital expenditures

(4,154

)

(1,987

)

Net cash (used for) provided by investing activities

(32,094

)

9,949

Cash Flows From Financing Activities:

Payments for repurchases of common stock

(1,000

)

(15,001

)

Proceeds from issuances of common stock

661

305

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

(895

)

(890

)

Payments of dividends to stockholders

(1,723

)

(1,748

)

Proceeds from issuances of commercial paper, net of repayments

1,880

—

Proceeds from issuances of senior notes and other borrowings, net of issuance costs

28,280

—

Repayments of senior notes and other borrowings

(16,692

)

(5,750

)

Other, net

(56

)

(437

)

Net cash provided by (used for) financing activities

10,455

(23,521

)

Effect of exchange rate changes on cash and cash equivalents

(174

)

(297

)

Net decrease in cash and cash equivalents

(14,570

)

(12,160

)

Cash and cash equivalents at beginning of period

21,383

30,098

Cash and cash equivalents at end of period

$

6,813

$

17,938

Fiscal 2022

Fiscal 2023

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

GAAP Operating Cash Flow

$

15,325

$

10,255

$

10,396

$

9,539

$

10,542

$

15,073

Capital Expenditures

(2,761

)

(3,118

)

(3,805

)

(4,511

)

(5,168

)

(6,678

)

Free Cash Flow

$

12,564

$

7,137

$

6,591

$

5,028

$

5,374

$

8,395

% Growth over prior year

9%

(41%)

(49%)

(63%)

(57%)

18%

GAAP Net Income

$

13,952

$

10,262

$

7,560

$

6,717

$

5,808

$

8,797

Free Cash Flow as a % of Net Income

90%

70%

87%

75%

93%

95%

(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 2022

Fiscal 2023

Q1

Q2

Q3

Q4

TOTAL

Q1

Q2

Q3

Q4

TOTAL

REVENUES BY OFFERINGS

Cloud services

$

2,461

$

2,667

$

2,791

$

2,890

$

10,809

$

3,579

$

3,813

$

7,392

License support

4,910

4,887

4,846

4,722

19,365

4,838

4,785

9,623

Cloud services and license support

7,371

7,554

7,637

7,612

30,174

8,417

8,598

17,015

Cloud license and on-premise license

813

1,237

1,289

2,539

5,878

904

1,435

2,339

Hardware

763

767

798

856

3,183

763

850

1,613

Services

781

802

789

833

3,205

1,361

1,392

2,753

Total revenues

$

9,728

$

10,360

$

10,513

$

11,840

$

42,440

$

11,445

$

12,275

$

23,720

AS REPORTED REVENUE GROWTH RATES

Cloud services

19%

22%

24%

19%

21%

45%

43%

44%

License support

1%

(1%)

(3%)

(5%)

(2%)

(1%)

(2%)

(2%)