2012 Financial Analyst Meeting. Ken Bond, Investor Relations October 4, 2012

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2 2012 Financial Analyst Meeting Ken Bond, Investor Relations October 4, 2012

3 Safe Harbor Statement "Safe Harbor Statement: Statements in this presentation relating to Oracle's future plans, expectations, beliefs, intentions and prospects are "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) Economic, political and market conditions, including the current European debt crisis, 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. (2) We may fail to achieve our financial forecasts due to such factors as delays or size reductions in transactions, fewer large transactions in a particular quarter, unanticipated fluctuations in currency exchange rates, delays in delivery of new products or releases or a decline in our renewal rates for software license updates and product support. (3) Our hardware systems business may not be successful, and we may fail to achieve our financial forecasts with respect to this business. (4) We have an active acquisition program and our acquisitions may not be successful, may involve unanticipated costs or other integration issues or may disrupt our existing operations. (5) Our international sales and operations subject us to additional risks that can adversely affect our operating results, including risks relating to foreign currency gains and losses and risks relating to compliance with international and U.S. laws that apply to our international operations. (6) Intense competitive forces demand rapid technological advances and frequent new product introductions and could require us to reduce prices or cause us to lose customers. (7) If we are unable to develop new or sufficiently differentiated products and services, or to enhance and improve our products and support services in a timely manner or to position and/or price our products and services to meet market demand, customers may not buy new software licenses or hardware systems products or purchase or renew support contracts. A detailed discussion of these factors and other risks that affect our business is contained in our 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) or by clicking on SEC Filings on Oracle s Investor Relations website at All information set forth in this presentation is current as of October 4, Oracle undertakes no duty to update any statement in light of new information or future events.

4 The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for Oracle s products remains at the sole discretion of Oracle.

5 Non-GAAP Financial Measures To supplement our financial results presented on a GAAP basis, we use non- GAAP measures, which exclude certain business combination accounting entries and expenses related to acquisitions and other significant expenses including stock based compensation, that we believe are helpful in understanding our past financial performance and our future results. Our non- GAAP financial 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. Today s discussion includes certain non-gaap financial measures, which were included in our earnings releases. A PDF copy of this press release and financial tables, which include a GAAP to non-gaap reconciliation, can be viewed and downloaded on the Oracle Investor Relations website at

6 2012 Financial Analyst Meeting Agenda Topic Welcome Presenter Ken Bond

7 2012 Financial Analyst Meeting Agenda Topic Welcome Financial Summary Oracle Strategy Summary Q&A Presenter Ken Bond Safra Catz Mark Hurd Safra & Mark

8 2012 Financial Analyst Meeting Agenda Topic Welcome Financial Summary Oracle Strategy Summary Q&A Oracle Cloud: PaaS Oracle Cloud: SaaS Engineered Systems: Exadata Engineered Systems: Exalogic Q&A Presenter Ken Bond Safra Catz Mark Hurd Safra & Mark Abhay Parasnis Steve Miranda Juan Loaiza Hasan Rizvi Thomas Kurian

9 2012 Financial Analyst Meeting Agenda Topic Welcome Financial Summary Oracle Strategy Summary Q&A Oracle Cloud: PaaS Oracle Cloud: SaaS Engineered Systems: Exadata Engineered Systems: Exalogic Q&A BREAK Presenter Ken Bond Safra Catz Mark Hurd Safra & Mark Abhay Parasnis Steve Miranda Juan Loaiza Hasan Rizvi Thomas Kurian

10 2012 Financial Analyst Meeting Agenda Topic Welcome Financial Summary Oracle Strategy Summary Q&A Oracle Cloud: PaaS Oracle Cloud: SaaS Engineered Systems: Exadata Engineered Systems: Exalogic Q&A BREAK Oracle Database 12c Engineered Systems: Exalytics Big Data Q&A Presenter Ken Bond Safra Catz Mark Hurd Safra & Mark Abhay Parasnis Steve Miranda Juan Loaiza Hasan Rizvi Thomas Kurian Andy Mendelsohn Balaji Yelamanchili Thomas Kurian Thomas Kurian

11 2012 Financial Analyst Meeting Agenda Topic Welcome Financial Summary Oracle Strategy Summary Q&A Oracle Cloud: PaaS Oracle Cloud: SaaS Engineered Systems: Exadata Engineered Systems: Exalogic Q&A BREAK Oracle Database 12c Engineered Systems: Exalytics Big Data Q&A Q&A Presenter Ken Bond Safra Catz Mark Hurd Safra & Mark Abhay Parasnis Steve Miranda Juan Loaiza Hasan Rizvi Thomas Kurian Andy Mendelsohn Balaji Yelamanchili Thomas Kurian Thomas Kurian Larry Ellison

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14 Financial Summary October 4, 2012

15 Safe Harbor Statement "Safe Harbor Statement: Statements in this presentation relating to Oracle's future plans, expectations, beliefs, intentions and prospects are "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) Economic, political and market conditions, including the current European debt crisis, 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. (2) We may fail to achieve our financial forecasts due to such factors as delays or size reductions in transactions, fewer large transactions in a particular quarter, unanticipated fluctuations in currency exchange rates, delays in delivery of new products or releases or a decline in our renewal rates for software license updates and product support. (3) Our hardware systems business may not be successful, and we may fail to achieve our financial forecasts with respect to this business. (4) We have an active acquisition program and our acquisitions may not be successful, may involve unanticipated costs or other integration issues or may disrupt our existing operations. (5) Our international sales and operations subject us to additional risks that can adversely affect our operating results, including risks relating to foreign currency gains and losses and risks relating to compliance with international and U.S. laws that apply to our international operations. (6) Intense competitive forces demand rapid technological advances and frequent new product introductions and could require us to reduce prices or cause us to lose customers. (7) If we are unable to develop new or sufficiently differentiated products and services, or to enhance and improve our products and support services in a timely manner or to position and/or price our products and services to meet market demand, customers may not buy new software licenses or hardware systems products or purchase or renew support contracts. A detailed discussion of these factors and other risks that affect our business is contained in our 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) or by clicking on SEC Filings on Oracle s Investor Relations website at All information set forth in this presentation is current as of October 4, Oracle undertakes no duty to update any statement in light of new information or future events.

16 Agenda Current Financial Performance Business Model Overview Historical Financial Performance Comparative Performance

17 Recent Financial Performance Year over Year Growth FY12 Q1 FY13 New Software License Revenue +9% +11% Software License Updates & Product Support Revenues +9% +8% Total Revenues +4% +3% Operating Margin (as reported) 46% 44% Net Income +10% +12% Earnings per Share +10% +17% Free Cash Flow (Trailing 4 quarter US Dollar growth rate) +22% +8% Unless stated otherwise, year-over-year growth rates are non-gaap and presented in constant currency. GAAP to Non-GAAP reconciliations are available at

18 When we were back in New York, we talked about the company growing its earnings in excess of 20 percent a year for the next several years. Larry Ellison March 2005

19 Earnings Per Share Grew 20% CAGR $2.22 $2.46 $1.30 $1.44 $1.67 $0.68 $0.80 $1.01 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 Source: Non-GAAP results. GAAP to Non-GAAP reconciliations are available at

20 Software Drives Earnings 87% of FY12 Margin is Software Related $18.2B $19.7B $11.6B $12.1B $14.0B $6.5B $7.4B $9.0B 87% FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 Software Services Hardware Systems Source: Forms 10-K, FY05 to FY12.

21 Our Business Model Drives Recurring Revenue $24.1B $26.2B $9.7B 49% $11.9B 51% $14.4B 52% $18.0B 51% $19.1B 54% $20.7B 56% 55% 55% FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 New Software License First Year Support Continuing Support Source: Non-GAAP results. GAAP to Non-GAAP reconciliations are available at First Year Support is an internal estimate and assumes 100% software support attach, 22% pricing and all sales at the end of the quarter. Continuing Support is non-gaap software support, as reported, less First Year Support

22 Historical Financial Performance

23 Revenue Grew 18% CAGR $35.6B $37.1B $22.4B $23.3B $26.8B $11.8B $14.4B $18.0B FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 Source: GAAP results. Compounded Annual Growth Rate from FY05 to FY12, or 7 years.

24 New License Revenue Grew 13% CAGR $9.2B $9.9B $7.5B $7.1B* $7.5B $4.1B $4.9B $5.9B FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 Source: GAAP results. Compounded Annual Growth Rate from FY05 to FY12, or 7 years. * - FY09 grew 1% in constant currency.

25 New License Revenue Grew 13% CAGR Balance Across Geographies Americas - EMEA - Asia Pac - 16% CAGR 10% CAGR 14% CAGR $7.5B $7.1B $7.5B $9.2B $9.9B $4.1B $4.9B $5.9B FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 Source: GAAP results. Compounded Annual Growth Rate from FY05 to FY12, or 7 years. * - FY09 grew 1% in constant currency.

26 Software Support Grew 17% CAGR $10.3B $11.8B $13.1B $14.8B $16.2B $5.3B $6.6B $8.3B FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 Source: GAAP results. Compounded Annual Growth Rate from FY05 to FY12, or 7 years.

27 Investing for Growth Sales Headcount Growth 5,300 5,800 4,200 2,500 2, ,200 1,600 Q1 FY11 Q2 FY11 Q3 FY11 Q4 FY11 Q1 FY12 Q2 FY12 Q3 FY12 Q4 FY12 Source: Company

28 Investing for Innovation Research & Development Headcount Growth 4,200 3,500 1,300 1,600 2,100 2, Q1 FY11 Q2 FY11 Q3 FY11 Q4 FY11 Q1 FY12 Q2 FY12 Q3 FY12 Q4 FY12 Source: Company

29 Investing for Growth & Innovation 94% of Headcount Additions in FY11 and FY12 were in Sales and R&D Source: Company

30 Scale Provides Natural Advantages $4.5 Billion in R&D in FY12 GAAP Operating Margin 37% 28% 16% Our Development Investment is Spread Over a Base of 390,000 Customers 8% 6% Oracle > $5B $1-5B $250M-1B <$250M # of Software Revenue Vendors ,235 Source: FactSet Research. GAAP Results for latest Annual Operating Margin for each company

31 Operating Margins Improved 500+ bps While adding a hardware business 47% 46% 45% 46% 43% ~ 4 mos of Sun included 44% 41% 40% 41% FY05 FY06 FY07 FY08 FY09 1H10 2H10 FY11 FY12 Source: Non-GAAP results. GAAP to Non-GAAP reconciliations are available at

32 Operating Income Grew 20% CAGR $15.9B $17.2B $9.7B $10.9B $12.5B $4.9B $6.0B $7.4B FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 Source: Non-GAAP results. GAAP to Non-GAAP reconciliations are available at

33 Capital Allocation $25B in Buybacks and Dividends Buybacks Dividends $7.2B $4.0B $4.2B $2.1B $2.0B $2.0B $2.2B $1.3B FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 Source: GAAP results.

34 Earnings Per Share Grew 20% CAGR $2.22 $2.46 $1.30 $1.44 $1.67 $0.68 $0.80 $1.01 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 Source: Non-GAAP results. GAAP to Non-GAAP reconciliations are available at

35 Comparative Performance

36 How Does Oracle Compare to Tech Peers? We selected 12 Tech Peers and normalized each to Oracle s fiscal year and aggregated GAAP results to compare Oracle s financial performance against the group of our Tech Peers.

37 How Does Oracle Compare to The Dow? We included all Dow Jones 30 companies except financial services companies of American Express, Bank of America, JP Morgan and Traveler s Insurance. GAAP financial results for each company were normalized to Oracle s fiscal year and aggregated to compare Oracle s financial performance against the group.

38 Revenue FY06 FY07 FY08 FY09 FY10 FY11 FY12 Oracle Tech Peers Dow 30 Source: FactSet. GAAP results were indexed to 100 for FY05 (or closest 4 quarter period); subsequent periods were indexed to FY05 to show trend on a common basis.

39 Operating Income FY06 FY07 FY08 FY09 FY10 FY11 FY12 Oracle Tech Peers Dow 30 Source: FactSet. GAAP results were indexed to 100 for FY05 (or closest 4 quarter period); subsequent periods were indexed to FY05 to show trend on a common basis.

40 Net Income FY06 FY07 FY08 FY09 FY10 FY11 FY12 Oracle Tech Peers Dow 30 Source: FactSet. GAAP results were indexed to 100 for FY05 (or closest 4 quarter period); subsequent periods were indexed to FY05 to show trend on a common basis.

41 Free Cash Flow FY06 FY07 FY08 FY09 FY10 FY11 FY12 Oracle Tech Peers Dow 30 Source: FactSet. GAAP results were indexed to 100 for FY05 (or closest 4 quarter period); subsequent periods were indexed to FY05 to show trend on a common basis.

42 Earnings Per Share FY06 FY07 FY08 FY09 FY10 FY11 FY12 Oracle Tech Peers Dow 30 Source: FactSet. GAAP results were indexed to 100 for FY05 (or closest 4 quarter period); subsequent periods were indexed to FY05 to show trend on a common basis.

43 Forward P/E Multiple Change Dow % Source: FactSet as of fiscal year ends May 31, 2005 and May 31, 2012.

44 Forward P/E Multiple Change Dow % Tech Peers % Source: FactSet as of fiscal year ends May 31, 2005 and May 31, 2012.

45 Forward P/E Multiple Change Dow % Tech Peers % Oracle % Source: FactSet as of fiscal year ends May 31, 2005 and May 31, 2012.

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