Oracle Delivers Better-Than-Expected Results
March 16, 2017
reported fiscal 2017 Q3 results. Total Revenues were $9.2 billion, up 2%
in U.S. dollars and up 3% in constant currency. Non-GAAP Total Revenues
were $9.3 billion, up 3% in U.S. dollars and up 4% in constant currency.
Cloud software as a service (SaaS) and platform as a service (PaaS)
revenues were $1.0 billion, up 73% in U.S. dollars and up 74% in
constant currency. Non-GAAP SaaS and PaaS revenues were $1.1 billion, up
85% in U.S. dollars and up 86% in constant currency. Total Cloud
Revenues, including infrastructure as a service (IaaS), were $1.2
billion, up 62% in U.S. dollars and up 63% in constant currency. Total
Cloud and On-Premise Software Revenues were $7.4 billion, up 4% in U.S.
dollars and up 5% in constant currency.
Operating Income was $3.0 billion and Operating Margin was 32%. Non-GAAP
Operating Income was $3.9 billion, up 3% in U.S. dollars and up 4% in
constant currency, and non-GAAP Operating Margin was 43%. Net Income was
$2.2 billion while non-GAAP Net Income was $2.9 billion, up 6% in U.S.
dollars and up 7% in constant currency. Earnings Per Share was $0.53,
while non-GAAP Earnings Per Share was $0.69, up 7% in U.S. dollars.
Without the impact of the U.S. dollar strengthening compared to foreign
currencies, Oracle’s reported GAAP Earnings Per Share would have been 1
Investors were looking for revenue of $9.26 billion, and a profit of 62
cents per share.
Short-term deferred revenues were $7.4 billion, up 7% in U.S. dollars
and constant currency compared with a year ago. Operating cash flow on a
trailing twelve-month basis was $13.5 billion.
“The hyper-growth we continue to experience in the cloud has rapidly
driven both our SaaS and PaaS businesses to scale,” said Oracle CEO,
Safra Catz. “On an annualized non-GAAP basis, our total cloud business
has reached the $5 billion mark, and our SaaS and PaaS businesses grew
at the astonishing rate of 85% in Q3. That growth and the resulting
scale enabled our SaaS and PaaS businesses to increase non-GAAP gross
margins to 65%. Our new, large, fast growing, high-margin cloud
businesses are driving Oracle’s total revenue and earnings up and
improving nearly every important non-GAAP business metric you care to
inspect; total revenue is up, margins are up, operating income is up,
net income is up, EPS is up. Take a look. Q3 was a very strong quarter.”
the last year, we sold more new SaaS and PaaS than Salesforce.com, and
we’re growing more than 3 times faster,” said Oracle CEO, Mark Hurd. “If
these trends continue, where we are selling more SaaS and PaaS in
absolute dollars AND growing dramatically faster, it’s just a matter of
when we catch and pass Salesforce.com in total cloud revenue.”
“Both our SaaS and PaaS businesses are doing great, but I’m even more
excited about our second generation IaaS business,” said Oracle Chairman
and CTO, Larry Ellison. “Our new Gen2 IaaS is both faster and lower cost
than Amazon Web Services. And now our biggest customers can run their
largest and most demanding Oracle database workloads in the Oracle
Cloud—something that is absolutely impossible to do in the Amazon
The Oracle Board of Directors declared a quarterly cash dividend of
$0.19 per share of outstanding common stock, reflecting a 27% increase
over the current quarterly dividend of $0.15. Larry Ellison, Oracle’s
Chairman of the Board, Chief Technology Officer and largest stockholder,
did not participate in the deliberation or the vote on this matter. This
increased dividend will be paid to stockholders of record as of the
close of business on April 12, 2017, with a payment date of April 26,