Oracle Corporation · NYSE:ORCL
Oracle — Shareholder Meeting (October 2013)
33 slides from Oracle's shareholder meeting presentation, Oct 31, 2013
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Slide 2: Annual Stockholder Meeting
Annual Stockholder Meeting October 31, 2013 Jeff Henley Ch i Chairman off th the B Board d 2
Slide 3: Safe Harbor Statement
Safe Harbor Statement "Safe Harbor" Statement: Statements made during Oracle’s Annual Stockholders Meeting relating to Oracle's future plans, expectations, beliefs expectations beliefs, intentions and prospects are "forward forward-looking looking statements" statements and are subject to material r
Slide 4: Non-GAAP Financial Measures
Non-GAAP Financial Measures To supplement our financial results presented on a GAAP basis, basis we use non-GAAP measures, which exclude certain business combination accounting entries and expenses related to acquisitions, as well as other significant expenses including stock- based compensation, th
Slide 5: Oracle Strategy
Oracle Strategy Complete Stack Complete Customer Choice • Best-of-Breed • On-Premise • Open • Private Cloud • Vertical Integration • Extreme Performance • Public Cloud • Engineered Systems • Hybrid Cloud 5
Slide 6: Best-in-Class Leader
Best-in-Class Leader • Database • Human Capital • Database on Solaris & Management • Customer Relationship Linux Management • Data Warehousing • Project Portfolio • Embedded Database Management • Middleware • Communications • Application Servers • Retail • Financial Services • Identity and Access •
Slide 7: Company Profile
Company Profile Scale • $37B FY13 • #1 in 50 product or industry categories • 400,000 customers in 145 countries • 25,000 partners • 120,000 employees • 15 million developers in Oracle on-line communities Innovation and Investment • 35,000 developers and engineers • 18,000 customer support specialis
Slide 8: Current Financial Performance
Current Financial Performance Year over Year Growth FY13 Q1 FY14 Software Revenue +7% +8% Hardware Revenue -14% -5% Services Revenue -5% -6% Total Revenue +2% +4% Operating Income +4% +6% Operating Margin (as reported) 47% 45% Earnings per Share +11% +14% Share Repurchases $11B $3B Free Cash Flow $1
Slide 9: Revenue: FY2013 Geographic Distribution
Revenue FY2013 Geographic Distribution Asia Pacific 17% of Total Revenue Americas 53% off T Total t lRRevenue EMEA 30% of Total Revenue Source: GAAP Results. 9
Slide 10: Revenue: FY2013 Line of Business Distribution
Revenue FY2013 Line of Business Distribution Hardware Systems Support 6% of Total Revenue Hardware Systems Products 8% of Total Revenue Services Revenues 12% of Total Revenue Software License Updates & Support 46% of Total Revenue New Software Licenses 28% of Total Revenue 10 Source: GAAP Results.
Slide 11: Software Revenue Grew 14% CAGR
Software Revenue Grew 14% CAGR $27.5B $26.1B $ $24.0B $20.6B $18.9B $17.8B $14.2B +9% +5% $11.5B +17% $9.4B +9% $8.1B +6% $7 2B $7.2B 26% +26% +23% +23% +17% +2% +12% FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 Source: GAAP Results. Compounded Annual Growth Rate from FY03 to FY13, or 10 y
Slide 12: Our Business Model Drives Recurring Revenue
Our Business Model Drives Recurring Revenue $ $27.5B $26.2B $24.1B $20.7B $19.1B 54% $18.0B $14.4B $11.9B $9.7B $8.1B $7 2B $7.2B 44% FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 New Software License First Year Support Continuing Support Source: Non-GAAP Results. GAAP to Non-GAAP reconcili
Slide 13: Operating Margin Trends
Operating Margin Trends 11% Operating Margin Expansion 47% 47% 46% 46% 45% 44% 43% ~ 4 mos of Sun 41% % 41% % included 40% 39% 36% FY03 FY04 FY05 FY06 FY07 FY08 FY09 1H10 2H10 FY11 FY12 FY13 Source: Non-GAAP Results. GAAP to Non-GAAP reconciliations are available at www.oracle.com/investor. 13
Slide 14: Earnings Per Share Grew 20% CAGR
Earnings Per Share Grew 20% CAGR $2.68 $2.46 $2.22 $1 67 $1.67 $1.44 $1.30 +9% +11% +33% $1.01 $0.80 +16% $0 68 $0.68 +11% $0.51 +29% $0.43 +26% +33% +18% +19% +10% FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 Source: Non-GAAP Results. GAAP to Non-GAAP reconciliations are available at www.
Slide 15: Free Cash Flow Grew 17% CAGR
Free Cash Flow Grew 17% CAGR $13.6B $13.1B $13 1B $10.8B $8 5B $8.5B $7.7B $7.2B +4% +22% $5.2B +27% $4.3B +9% $ $3.4B +8% $3.0B +38% $2.7B +21% +28% +10% +12% -4% FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 Source: Non-GAAP Results. Compounded Annual Growth Rate from FY03 to FY13, or 10
Slide 16: Investing for Growth
Investing for Growth Sales Headcount Growth , 9,900 8,500 7,200 6,400 5,800 5,700 5,300 4,200 2,800 , 2 500 2,500 1,600 1,200 800 Q1FY11 Q2FY11 Q3FY11 Q4FY11 Q1FY12 Q2FY12 Q3FY12 Q4FY12 Q1FY13 Q2FY13 Q3FY13 Q4FY13 Q1FY14 Source: Company 16
Slide 17: Investing for Innovation
Investing for Innovation Research & Development Headcount Growth , 8,000 6,700 5,900 5,400 5,100 4,200 3,500 2,600 2 100 2,100 1,600 1,300 500 700 Q1FY11 Q2FY11 Q3FY11 Q4FY11 Q1FY12 Q2FY12 Q3FY12 Q4FY12 Q1FY13 Q2FY13 Q3FY13 Q4FY13 Q1FY14 Source: Company 17
Slide 18: 96% of Headcount Additions Have Been in Sales and R&D
Investing for Growth & Innovation 96% of Headcount Additions since June 1, 2010 have been in Sales and R&D Source: Company 18
Slide 19: Oracle Acquisitions
Oracle Acquisitions APPLICATIONS MIDDLEWARE Middleware Platform Business Intelligence Identity and Access Performance Enterprise Content Management Management Management and Management Data Integration DATABASE OPERATING SYSTEM AND VIRTUAL MACHINE Operating System Systems Management Virtual Machine
Slide 20: Sources and Uses of Cash
Sources and Uses of Cash $83B in M&A and Shareholder Returns $26B ($44B) Proceeds $82B from Financing Acquisitions ($39B) Cash from Operations Buybacks & and Other Dividends $32B $7B FY03 FY13 Source: GAAP results. 20
Slide 21: Capital Allocation
Capital Allocation $42B in Buybacks and Dividends $12.5B $7.1B $3.9B $4.2B $2.7B $2.1B $2.0B $2.0B $2.2B $1.5B $1.3B FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 Buybacks Dividends Source: GAAP Results. 21
Slide 22: A Very Healthy Balance Sheet
A Very Healthy Balance Sheet • Return on Equity (TTM) 25% • Return on Assets (TTM) 14% • Cash & Investment (MRQ) $39B • Debt D b to Equiity (MRQ) .96x 96 • Net Cash (MRQ) $15B Figures presented above are based on GAAP results for the four most recent quarters including Q1 FY2014. TTM – Trailing Twel
Slide 23: Comparative Performance
= Comparative Performance OE Al ORACLE 23
Slide 24: How Does Oracle Compare to Tech Peers?
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 24 Oracle’s financial performance against the group of our “Tech Peers.”
Slide 25: How Does Oracle Compare to The Dow?
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. 25 GAAP financial results for each company were normalized to Oracle’s fiscal year and aggregated to compare Oracle
Slide 26: Revenue
Revenue 400 300 200 100 0 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 Oracle Tech Peers Dow 30 Source: FactSet. GAAP results were indexed to 100 for FY06 (or closest 4 quarter period); 26 subsequent periods were indexed to FY06 to show trend on a common basis.
Slide 27: Operating Income
Operating Income 400 300 200 100 0 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 Oracle Tech Peers Dow 30 Source: FactSet. GAAP results were indexed to 100 for FY06 (or closest 4 quarter period); 27 subsequent periods were indexed to FY06 to show trend on a common basis.
Slide 28: Net Income
Net Income 400 300 200 100 0 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 Oracle Tech Peers Dow 30 Source: FactSet. GAAP results were indexed to 100 for FY06 (or closest 4 quarter period); 28 subsequent periods were indexed to FY06 to show trend on a common basis.
Slide 29: Free Cash Flow
Free Cash Flow 400 300 200 100 0 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 Oracle Tech Peers Dow 30 Source: FactSet. GAAP results were indexed to 100 for FY06 (or closest 4 quarter period); 29 subsequent periods were indexed to FY06 to show trend on a common basis.
Slide 30: Earnings Per Share
Earnings Per Share 400 300 200 100 0 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 Oracle Tech Peers Dow 30 Source: FactSet. GAAP results were indexed to 100 for FY06 (or closest 4 quarter period); 30 subsequent periods were indexed to FY06 to show trend on a common basis.
Slide 31: Oracle Stock Has Performed Well
Oracle Stock Has Performed Well Compared to Broader Indices – 7 Year 2006 2007 2008 2009 2010 2011 2012 2013 O l Oracle Nasdaq d S&P 500 Dow J Jones Source: FactSet Research. Prices for the last 7 years were indexed (September 2006 – September 2013) 31
Slide 32: Hardware and Software
Hardware and Software Engineered to Work Together
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