EX-99.1 2 orcl-ex991_6.htm EX-99.1 orcl-ex991_6.htm

Exhibit 99.1

 

For Immediate Release

 

 

 

 

 

 

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 FY19 GAAP EPS UP 18% TO $0.61 and NON-GAAP EPS UP 16% TO $0.80

Trailing Twelve Month Operating Cash Flow Up 5% to $15.2 Billion

Trailing Twelve Month Free Cash Flow Up 10% to $13.8 Billion

Customer Count Nearly 6,000 for Fusion Cloud ERP

 

REDWOOD SHORES, Calif., December 17, 2018 -- Oracle Corporation (NYSE: ORCL) today announced fiscal 2019 Q2 results. Total Revenues were unchanged at $9.6 billion and up 2% in constant currency, compared to Q2 last year. Total Cloud Services and License Support plus Cloud License and On-Premise License revenues were up 1% to $7.9 billion. Cloud Services and License Support revenues were $6.6 billion, while Cloud License and On-Premise License revenues were $1.2 billion.

GAAP Operating Income was up 2% to $3.1 billion and GAAP Operating Margin was 32%. Non-GAAP Operating Income was down 2% to $4.1 billion and non-GAAP Operating Margin was 43%. GAAP Net Income was up 5% to $2.3 billion and non-GAAP Net Income was up 3% to $3.1 billion. GAAP Earnings Per Share was up 18% to $0.61 while non-GAAP Earnings Per Share was up 16% to $0.80.

Short-term deferred revenues were up 3% to $8.2 billion compared to a year ago. Operating Cash Flow was up 5% to $15.2 billion during the trailing twelve months.

Without the strengthening of the U.S. dollar compared to foreign currencies, Oracle’s reported GAAP and non-GAAP Total Revenues would have been approximately $140 million higher, and Earnings Per Share would have been 2 cents higher in comparison to as reported amounts for fiscal 2019 Q2.

“In Q2, non-GAAP earnings per share grew 19% in constant currency,” said Oracle CEO, Safra Catz.  “In addition to our strong EPS growth, free cash flow grew 10% to $13.8 billion over the previous twelve months. I am confident that we will continue to record strong EPS and free cash flow growth during the second half of this fiscal year.”

“Oracle’s two cloud ERP businesses, Fusion ERP and NetSuite ERP, delivered a combined revenue growth rate of 32% in Q2,” said Oracle CEO, Mark Hurd. “With nearly 6,000 Fusion ERP customers and over 16,000 NetSuite ERP customers, Oracle is the clear leader in cloud ERP.  ERP has always been the largest segment of the enterprise applications business, so we have lots of room to grow as customers migrate from their traditional on-premise ERP to the Oracle Fusion ERP Cloud.”

“The Oracle Autonomous Database for data warehousing and transaction processing is the world’s only self-driving database,” said Oracle CTO, Larry Ellison. “The Oracle Autonomous Database lowers costs by eliminating human labor and increases reliability by eliminating human error.  And Oracle is the only database that automatically patches and upgrades itself while running.”

The Board of Directors declared a quarterly cash dividend of $0.19 per share of outstanding common stock. This dividend will be paid to stockholders of record as of the close of business on January 16, 2019, with a payment date of January 30, 2019.

 


Q2 Fiscal 2019 Earnings Conference Call and Webcast

Oracle will hold a conference call and webcast today to discuss these results at 2:00 p.m. Pacific. You may listen to the call by dialing (816) 287-5563, Passcode: 425392. To access the live webcast, please visit the Oracle Investor Relations website at http://www.oracle.com/investor. In addition, Oracle’s Q2 results and fiscal 2019 financial tables are available on the Oracle Investor Relations website.

A replay of the conference call will also be available by dialing (855) 859-2056 or (404) 537-3406, Passcode: 9393468.

About Oracle

Oracle offers a comprehensive and fully integrated stack of cloud applications and platform services. For more information about Oracle (NYSE: ORCL), visit www.oracle.com/investor or contact Investor Relations at investor_us@oracle.com or (650) 506-4073.

# # #

Trademarks

Oracle and Java are registered trademarks of Oracle 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 future plans, expectations, beliefs, intentions and prospects, including statements regarding the growth of our EPS, free cash flow, and the SaaS ERP market segment, are all "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) Our cloud strategy, including our Oracle Software as a Service, Platform as a Service, Infrastructure as a Service and Data as a Service offerings, may not be successful. (2) If we are unable to develop new or sufficiently differentiated products and services, integrate acquired products and services, or enhance and improve our existing products and support services in a timely manner, or price our products and services to meet market demand, customers may not purchase or subscribe to our software, hardware or cloud offerings or renew software support, hardware support or cloud subscriptions contracts. (3) Enterprise customers rely on our cloud, license and hardware offerings and related services to run their businesses and significant coding, manufacturing or configuration errors in our cloud, license and hardware offerings and related services could expose us to product liability, performance and warranty claims, as well as cause significant harm to our brand and reputation, which could impact our future sales. (4) If the security measures for our products and services are compromised and as a result, our customers’ data or our IT systems are accessed improperly, made unavailable, or improperly modified, our products and services may be perceived as vulnerable, our brand and reputation could be damaged and we may experience legal claims and reduced sales. (5) Our business practices with respect to data could give rise to operational interruption, liabilities or reputational harm as a result of governmental regulation, legal requirements or industry standards relating to consumer privacy and data protection. (6) Economic, political and market conditions can adversely affect our business, results of operations and financial condition, including our revenue growth and profitability, which in turn could adversely affect our stock price. (7) Our international sales and operations subject us to additional risks that can adversely affect our operating results. (8) We have a selective and active acquisition program and our acquisitions may not be successful, may involve unanticipated costs or other integration issues or may disrupt our existing operations. A detailed discussion of these factors and other risks that affect our business is contained in our U.S. Securities and Exchange Commission (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 press release is current as of December 17, 2018. Oracle undertakes no duty to update any statement in light of new information or future events.

 

 


ORACLE CORPORATION

Q2 FISCAL 2019 FINANCIAL RESULTS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in millions, except per share data)

 

 

Three Months Ended November 30,

 

% Increase

 

% Increase

(Decrease)

 

 

 

2018

 

 

% of

Revenues

 

2017

 

 

% of

Revenues

 

(Decrease)

in US $

 

in Constant

Currency (1)

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cloud services and license support

 

$

6,637

 

 

69%

 

$

6,461

 

 

67%

 

3%

 

5%

 

Cloud license and on-premise license

 

 

1,217

 

 

13%

 

 

1,331

 

 

14%

 

(9%)

 

(6%)

 

Hardware

 

 

891

 

 

9%

 

 

941

 

 

10%

 

(5%)

 

(3%)

 

Services

 

 

817

 

 

9%

 

 

856

 

 

9%

 

(5%)

 

(2%)

 

Total revenues

 

 

9,562

 

 

100%

 

 

9,589

 

 

100%

 

0%

 

2%

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cloud services and license support

 

 

956

 

 

10%

 

 

893

 

 

9%

 

7%

 

9%

 

Hardware

 

 

332

 

 

4%

 

 

350

 

 

4%

 

(5%)

 

(2%)

 

Services

 

 

713

 

 

8%

 

 

717

 

 

8%

 

(1%)

 

2%

 

Sales and marketing

 

 

2,101

 

 

22%

 

 

2,088

 

 

22%

 

1%

 

3%

 

Research and development

 

 

1,475

 

 

15%

 

 

1,473

 

 

15%

 

0%

 

2%

 

General and administrative

 

 

299

 

 

3%

 

 

320

 

 

3%

 

(7%)

 

(5%)

 

Amortization of intangible assets

 

 

424

 

 

5%

 

 

400

 

 

4%

 

6%

 

6%

 

Acquisition related and other

 

 

18

 

 

0%

 

 

17

 

 

0%

 

7%

 

9%

 

Restructuring

 

 

143

 

 

1%

 

 

292

 

 

3%

 

(51%)

 

(50%)

 

Total operating expenses

 

 

6,461

 

 

68%

 

 

6,550

 

 

68%

 

(1%)

 

1%

 

OPERATING INCOME

 

 

3,101

 

 

32%

 

 

3,039

 

 

32%

 

2%

 

5%

 

Interest expense

 

 

(519

)

 

(5%)

 

 

(475

)

 

(5%)

 

9%

 

9%

 

Non-operating income, net

 

 

192

 

 

2%

 

 

262

 

 

2%

 

(26%)

 

(26%)

 

INCOME BEFORE PROVISION FOR INCOME TAXES

 

 

2,774

 

 

29%

 

 

2,826

 

 

29%

 

(2%)

 

1%

 

Provision for income taxes

 

 

441

 

 

5%

 

 

612

 

 

6%

 

(28%)

 

(28%)

 

NET INCOME

 

$

2,333

 

 

24%

 

$

2,214

 

 

23%

 

5%

 

9%

 

EARNINGS PER SHARE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.63

 

 

 

 

$

0.53

 

 

 

 

 

 

 

 

Diluted

 

$

0.61

 

 

 

 

$

0.52

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

3,720

 

 

 

 

 

4,160

 

 

 

 

 

 

 

 

Diluted

 

 

3,817

 

 

 

 

 

4,283

 

 

 

 

 

 

 

 

 

(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, 2018, 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, 2018 compared with the corresponding prior year period decreased our revenues by 2 percentage points, operating expenses by 2 percentage points and operating income by 3 percentage points.

 

1


ORACLE CORPORATION

Q2 FISCAL 2019 FINANCIAL RESULTS

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

($ in millions, except per share data)

 

 

Three Months Ended November 30,

 

 

% Increase (Decrease)

in US$

 

% Increase (Decrease) in

Constant Currency (2)

 

 

2018

GAAP

 

 

Adj.

 

 

2018

Non-GAAP

 

 

2017

GAAP

 

 

Adj.

 

 

2017

Non-GAAP

 

 

GAAP

 

Non-GAAP

 

GAAP

 

Non-GAAP

TOTAL REVENUES

 

$

9,562

 

 

$

5

 

 

$

9,567

 

 

$

9,589

 

 

$

9

 

 

$

9,598

 

 

0%

 

0%

 

2%

 

2%

Cloud services and license support

 

 

6,637

 

 

 

5

 

 

 

6,642

 

 

 

6,461

 

 

 

9

 

 

 

6,470

 

 

3%

 

3%

 

5%

 

5%

TOTAL OPERATING EXPENSES

 

$

6,461

 

 

$

(981

)

 

$

5,480

 

 

$

6,550

 

 

$

(1,122

)

 

$

5,428

 

 

(1%)

 

1%

 

1%

 

3%

Sales and marketing (3)

 

 

2,101

 

 

 

(93

)

 

 

2,008

 

 

 

2,088

 

 

 

(93

)

 

 

1,995

 

 

1%

 

1%

 

3%

 

3%

Stock-based compensation (4)

 

 

303

 

 

 

(303

)

 

 

 

 

 

320

 

 

 

(320

)

 

 

 

 

(5%)

 

*

 

(5%)

 

*

Amortization of intangible assets (5)

 

 

424

 

 

 

(424

)

 

 

 

 

 

400

 

 

 

(400

)

 

 

 

 

6%

 

*

 

6%

 

*

Acquisition related and other

 

 

18

 

 

 

(18

)

 

 

 

 

 

17

 

 

 

(17

)

 

 

 

 

7%

 

*

 

9%

 

*

Restructuring

 

 

143

 

 

 

(143

)

 

 

 

 

 

292

 

 

 

(292

)

 

 

 

 

(51%)

 

*

 

(50%)

 

*

OPERATING INCOME

 

$

3,101

 

 

$

986

 

 

$

4,087

 

 

$

3,039

 

 

$

1,131

 

 

$

4,170

 

 

2%

 

(2%)

 

5%

 

0%

OPERATING MARGIN %

 

32%

 

 

 

 

 

 

43%

 

 

32%

 

 

 

 

 

 

43%

 

 

73 bp.

 

(74) bp.

 

86 bp.

 

(78) bp.

INCOME TAX EFFECTS (6)

 

$

441

 

 

$

258

 

 

$

699

 

 

$

612

 

 

$

385

 

 

$

997

 

 

(28%)

 

(30%)

 

(28%)

 

(28%)

NET INCOME

 

$

2,333

 

 

$

728

 

 

$

3,061

 

 

$

2,214

 

 

$

746

 

 

$

2,960

 

 

5%

 

3%

 

9%

 

6%

DILUTED EARNINGS PER SHARE

 

$

0.61

 

 

 

 

 

 

$

0.80

 

 

$

0.52

 

 

 

 

 

 

$

0.69

 

 

18%

 

16%

 

22%

 

19%

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

 

 

3,817

 

 

 

 

 

 

3,817

 

 

 

4,283

 

 

 

 

 

 

4,283

 

 

(11%)

 

(11%)

 

(11%)

 

(11%)

 

 

(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, 2018, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during the respective periods.

 

(3)

Non-GAAP adjustments to sales and marketing expenses were as follows:

 

 

Three Months Ended

November 30,

 

 

 

2018

 

 

2017

 

Stock-based compensation (4)

 

$

(93

)

 

$

(98

)

Acquired deferred sales commissions amortization

 

 

 

 

 

5

 

Total non-GAAP sales and marketing adjustments

 

$

(93

)

 

$

(93

)

 

(4)

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

 

 

Three Months Ended

November 30, 2018

 

 

Three Months Ended

November 30, 2017

 

 

 

GAAP

 

 

Adj.

 

 

Non-GAAP

 

 

GAAP

 

 

Adj.

 

 

Non-GAAP

 

Cloud services and license support

 

$

24

 

 

$

(24

)

 

$

 

 

$

20

 

 

$

(20

)

 

$

 

Hardware

 

 

2

 

 

 

(2

)

 

 

 

 

 

3

 

 

 

(3

)

 

 

 

Services

 

 

12

 

 

 

(12

)

 

 

 

 

 

14

 

 

 

(14

)

 

 

 

Research and development

 

 

222

 

 

 

(222

)

 

 

 

 

 

237

 

 

 

(237

)

 

 

 

General and administrative

 

 

43

 

 

 

(43

)

 

 

 

 

 

46

 

 

 

(46

)

 

 

 

Subtotal

 

 

303

 

 

 

(303

)

 

 

 

 

 

320

 

 

 

(320

)

 

 

 

Sales and marketing

 

 

93

 

 

 

(93

)

 

 

 

 

 

98

 

 

 

(98

)

 

 

 

Total stock-based compensation

 

$

396

 

 

$

(396

)

 

$

 

 

$

418

 

 

$

(418

)

 

$

 

 

(5)

Estimated future annual amortization expense related to intangible assets as of November 30, 2018 was as follows:

 

Remainder of fiscal 2019

 

$

812

 

Fiscal 2020

 

 

1,500

 

Fiscal 2021

 

 

1,279

 

Fiscal 2022

 

 

1,019

 

Fiscal 2023

 

 

625

 

Fiscal 2024

 

 

383

 

Thereafter

 

 

485

 

Total intangible assets, net

 

$

6,103

 

 

(6)

Income tax effects were calculated reflecting an effective GAAP tax rate of 15.9% and 21.7% in the second quarter of fiscal 2019 and 2018, respectively, and an effective non-GAAP tax rate of 18.6% and 25.2% in the second quarter of fiscal 2019 and 2018, respectively. The difference between our GAAP and non-GAAP tax rates in the second quarters of fiscal 2019 and 2018 was primarily due to the net tax effects on stock-based compensation expense and acquisition related items, including the tax effects of amortization of intangible assets.

 

*

Not meaningful

2


ORACLE CORPORATION

Q2 FISCAL 2019 YEAR TO DATE FINANCIAL RESULTS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in millions, except per share data)

 

 

 

Six Months Ended November 30,

 

% Increase

 

% Increase

(Decrease)

 

 

2018

 

 

% of

Revenues

 

2017

 

 

% of

Revenues

 

(Decrease)

in US $

 

in Constant

Currency (1)

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cloud services and license support

 

$

13,246

 

 

71%

 

$

12,868

 

 

69%

 

3%

 

4%

Cloud license and on-premise license

 

 

2,083

 

 

11%

 

 

2,225

 

 

12%

 

(6%)

 

(4%)

Hardware

 

 

1,796

 

 

9%

 

 

1,884

 

 

10%

 

(5%)

 

(3%)

Services

 

 

1,630

 

 

9%

 

 

1,716

 

 

9%

 

(5%)

 

(3%)

Total revenues

 

 

18,755

 

 

100%

 

 

18,693

 

 

100%

 

0%

 

2%

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cloud services and license support

 

 

1,870

 

 

10%

 

 

1,750

 

 

9%

 

7%

 

8%

Hardware

 

 

658

 

 

4%

 

 

722

 

 

4%

 

(9%)

 

(7%)

Services

 

 

1,428

 

 

8%

 

 

1,417

 

 

8%

 

1%

 

3%

Sales and marketing

 

 

4,140

 

 

22%

 

 

4,077

 

 

22%

 

2%

 

3%

Research and development

 

 

3,039

 

 

16%

 

 

3,045

 

 

16%

 

0%

 

1%

General and administrative

 

 

619

 

 

3%

 

 

638

 

 

4%

 

(3%)

 

(1%)

Amortization of intangible assets

 

 

858

 

 

5%

 

 

811

 

 

4%

 

6%

 

6%

Acquisition related and other

 

 

32

 

 

0%

 

 

28

 

 

0%

 

13%

 

15%

Restructuring

 

 

233

 

 

1%

 

 

416

 

 

2%

 

(44%)

 

(43%)

Total operating expenses

 

 

12,877

 

 

69%

 

 

12,904

 

 

69%

 

0%

 

1%

OPERATING INCOME

 

 

5,878

 

 

31%

 

 

5,789

 

 

31%

 

2%

 

4%

Interest expense

 

 

(1,048

)

 

(6%)

 

 

(944

)

 

(5%)

 

11%

 

11%

Non-operating income, net

 

 

484

 

 

3%

 

 

481

 

 

2%

 

1%

 

1%

INCOME BEFORE PROVISION FOR INCOME TAXES

 

 

5,314

 

 

28%

 

 

5,326

 

 

28%

 

0%

 

2%

Provision for income taxes

 

 

716

 

 

4%

 

 

968

 

 

5%

 

(26%)

 

(26%)

NET INCOME

 

$

4,598

 

 

24%

 

$

4,358

 

 

23%

 

6%

 

9%

EARNINGS PER SHARE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.21

 

 

 

 

$

1.05

 

 

 

 

 

 

 

Diluted

 

$

1.18

 

 

 

 

$

1.02

 

 

 

 

 

 

 

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

3,812

 

 

 

 

 

4,158

 

 

 

 

 

 

 

Diluted

 

 

3,908

 

 

 

 

 

4,283

 

 

 

 

 

 

 

 

(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, 2018, 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, 2018 compared with the corresponding prior year period decreased our revenues by 2 percentage points, operating expenses by 1 percentage point and operating income by 2 percentage points.

 

 

3


ORACLE CORPORATION

Q2 FISCAL 2019 YEAR TO DATE FINANCIAL RESULTS

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

($ in millions, except per share data)

 

 

 

Six Months Ended November 30,

 

 

% Increase (Decrease)

in US$

 

% Increase (Decrease) in

Constant Currency (2)

 

 

2018

GAAP

 

 

Adj.

 

 

2018

Non-GAAP

 

 

2017

GAAP

 

 

Adj.

 

 

2017

Non-GAAP

 

 

GAAP

 

Non-GAAP

 

GAAP

 

Non-GAAP

TOTAL REVENUES

 

$

18,755

 

 

$

13

 

 

$

18,768

 

 

$

18,693

 

 

$

34

 

 

$

18,727

 

 

0%

 

0%

 

2%

 

2%

Cloud services and license support

 

 

13,246

 

 

 

13

 

 

 

13,259

 

 

 

12,868

 

 

 

34

 

 

 

12,902

 

 

3%

 

3%

 

4%

 

4%

TOTAL OPERATING EXPENSES

 

$

12,877

 

 

$

(1,955

)

 

$

10,922

 

 

$

12,904

 

 

$

(2,060

)

 

$

10,844

 

 

0%

 

1%

 

1%

 

3%

Sales and marketing (3)

 

 

4,140

 

 

 

(188

)

 

 

3,952

 

 

 

4,077

 

 

 

(171

)

 

 

3,906

 

 

2%

 

1%

 

3%

 

3%

Stock-based compensation (4)

 

 

644

 

 

 

(644

)

 

 

 

 

 

634

 

 

 

(634

)

 

 

 

 

2%

 

*

 

2%

 

*

Amortization of intangible assets (5)

 

 

858

 

 

 

(858

)

 

 

 

 

 

811

 

 

 

(811

)

 

 

 

 

6%

 

*

 

6%

 

*

Acquisition related and other

 

 

32

 

 

 

(32

)

 

 

 

 

 

28

 

 

 

(28

)

 

 

 

 

13%

 

*

 

15%

 

*

Restructuring

 

 

233

 

 

 

(233

)

 

 

 

 

 

416

 

 

 

(416

)

 

 

 

 

(44%)

 

*

 

(43%)

 

*

OPERATING INCOME

 

$

5,878

 

 

$

1,968

 

 

$

7,846

 

 

$

5,789

 

 

$

2,094

 

 

$

7,883

 

 

2%

 

0%

 

4%

 

1%

OPERATING MARGIN %

 

31%

 

 

 

 

 

 

42%

 

 

31%

 

 

 

 

 

 

42%

 

 

38 bp.

 

(29) bp.

 

50 bp.

 

(31) bp.

INCOME TAX EFFECTS (6)

 

$

716

 

 

$

656

 

 

$

1,372

 

 

$

968

 

 

$

895

 

 

$

1,863

 

 

(26%)

 

(26%)

 

(26%)

 

(25%)

NET INCOME

 

$

4,598

 

 

$

1,312

 

 

$

5,910

 

 

$

4,358

 

 

$

1,199

 

 

$

5,557

 

 

6%

 

6%

 

9%

 

8%

DILUTED EARNINGS PER SHARE

 

$

1.18

 

 

 

 

 

 

$

1.51

 

 

$

1.02

 

 

 

 

 

 

$

1.30

 

 

16%

 

17%

 

19%

 

19%

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

 

 

3,908

 

 

 

 

 

 

3,908

 

 

 

4,283

 

 

 

 

 

 

4,283

 

 

(9%)

 

(9%)

 

(9%)

 

(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, 2018, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during the respective periods.

 

(3)

Non-GAAP adjustments to sales and marketing expenses were as follows:

 

 

Six Months Ended

November 30,

 

 

 

2018

 

 

2017

 

Stock-based compensation (4)

 

$

(188

)

 

$

(187

)

Acquired deferred sales commissions amortization

 

 

 

 

 

16

 

Total non-GAAP sales and marketing adjustments

 

$

(188

)

 

$

(171

)

 

(4)

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

 

 

Six Months Ended

November 30, 2018

 

 

Six Months Ended

November 30, 2017

 

 

 

GAAP

 

 

Adj.

 

 

Non-GAAP

 

 

GAAP

 

 

Adj.

 

 

Non-GAAP

 

Cloud services and license support

 

$

48

 

 

$

(48

)

 

$

 

 

$

38

 

 

$

(38

)

 

$

 

Hardware

 

 

5

 

 

 

(5

)

 

 

 

 

 

6

 

 

 

(6

)

 

 

 

Services

 

 

25

 

 

 

(25

)

 

 

 

 

 

28

 

 

 

(28

)

 

 

 

Research and development

 

 

479

 

 

 

(479

)

 

 

 

 

 

472

 

 

 

(472

)

 

 

 

General and administrative

 

 

87

 

 

 

(87

)

 

 

 

 

 

90

 

 

 

(90

)

 

 

 

Subtotal

 

 

644

 

 

 

(644

)

 

 

 

 

 

634

 

 

 

(634

)

 

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