This summary is based on the fourth quarter fiscal 2008 earnings call conducted by Oracle Corporation (ORCL: chart) on June 25, 2008.
Management:
Investor Relations: Roy Lobo
Co-President, Chief Financial Officer, Director: Safra A. Catz
Chief Executive Officer, Director: Lawrence J. Ellison
Co-President, Director: Charles E. Phillips
Key Investors Issues
- EPS were 39 cents a share compared to 31 cents a share last year.
- Net income rose to $2.04 billion from $1.6 billion in the same period a year earlier.
- Revenue rose to $7.24 billion from $5.83 billion a year ago.
Fourth Quarter Highlights
EPS were 39 cents a share compared to 31 cents a share last year.
The company started the year on a high note with the strongest first half new license growth in more than a decade. It continued that momentum into the second-half, delivering license growth of 28% to $7.5 billion for the year, the highest license growth rate in any fiscal year in the past decade, including during the height of the Internet bubble.
The company achieved the highest non-GAAP operating margin in the company''s history at 49%.
- Non-GAAP EPS grew 29% to $1.30 for the year, well above EPS growth plan of 20% per year.
- New software license revenues were up an exceptionally strong 27% to $3.1 billion.
- Technology new license revenues were up 23% to $2.1 billion in the fourth quarter and up 24% to $5.1 billion for the full year.
- Geographically, the company grew technology license revenues 16% in the Americas, 42% in EMEA, and 6% in APAC.
- BEA contributed $93 million to new software license revenue, exceeding expectations as BEA customers welcomed the closing of the transaction.
- Applications business delivered new license growth of 36% in the fourth quarter and 38% growth for the full year, which is around three times faster than SAP.
- The company turned in a strong performance geographically, growing 33% in the Americas, 41% in EMEA, and 37% in APAC.
- Software license update and product support revenues were up 23% on a non-GAAP basis for the quarter to $2.9 billion and up 23% on a non-GAAP basis to $10.5 billion for the year, exceeding for the first time the $10 billion mark on this highly profitable recurring part of business.
- Non-GAAP operating income grew 31% to $3.5 billion, resulting in margins of 49%. EPS grew 27% to 47 cents per share on a non-GAAP basis.
- Operating cash flows increased to $7.4 billion for the year, while free cash flow increased to $7.2 billion for the year.
- The company bought back approximately 24 million shares at an average price of $20.76. For the year, the company bought back about 97 million shares at an average price of $20.54, spending a total of $2 billion.
The Oracle Technology Network has 4.9 million registered members, up 19% over the last year and 22% in BRIC countries.
- The company has 94% more postings on oracle.com forums, 2.2 million in total.
- The company had a 72% increase in podcast use and in live events. The company had over 6,000 events last year and 340,000 attendees, up 10% from the year before, and is getting more senior attendees.
- In database, 11g continues its momentum. The company has had over 300,000 downloads since the initial release of the product back in August of 2007.
- Some key customers using 11g include Northern California Power Agency, Fair Isaac, the Chicago Board Options Exchange, Edmunds.com and Mobiltel, Bulgaria. They upgraded to Oracle database 11g on Linux to get higher quality of service and respond to changing business needs.
- The company continues to see broad adoption of Fusion middleware by partners. The company signed over 90 new ISVs supporting Fusion middleware and over 30 in the fourth quarter alone. BEA will help significantly here.
- Business intelligence products more than doubled year to year, both in the quarter and for the year as the company continues to take share because of modern, proven and integrated BI platform which can extract information from multiple sources and deliver across multiple channels with a single semantic layer to track all objects and calculations.
- In the area of applications, the company released four new advance supply chain planning products: a new version of Agile PLM, a new integration center AIA, or Applications Integration Architecture, linking Siebel’s Trade Promotion Management with Demantra’s Advanced Trade Planning.
- Some key customers in health sciences that the company had wins across ERP, CRM Performa in clinical applications including Pfizer, Teva Pharmaceuticals and United Health Group.
- The second and more recent global business unit is for insurance. The company announced the acquisition of two companies, AdminServer and Skywire, with award-winning, packaged applications for the insurance industry.
- When combined with pre-existing Siebel for Insurance, Billing and i-flex assets, the company will have a product line that spans policy administration, rating, illustration, agent desktops, and billing for life and property and casualty.
- In CRM, the company had a strong performance, greater than 50% growth.
- In Oracle Financial Services, the company won HBOS, which is the 12th largest bank in the world and parent company of Bank of Scotland. That was a win over Temenos and Misys. The company won Banco de Chile, where it beated Temenos and TBC Bank in Georgia, which is the second-largest bank in Georgia and was a win over Misys as well.
