1
Annual Stockholder Meeting
October 31, 2013

Jeff Henley
Chairman of th B d
Ch i
f the Board
2
Safe Harbor Statement

"Safe Harbor" Statement: Statements made during Oracle’s Annual Stockholders Meeting relating to Or...
Non-GAAP Financial Measures

To supplement our financial results presented on a GAAP basis we
basis,
use non-GAAP measures...
Oracle Strategy

Complete Stack
•
•
•
•
•

5

Complete Customer Choice
• On-Premise

Best-of-Breed
Open
Vertical Integrati...
Best-in-Class Leader
• Database
• Database on Solaris &
Linux
• Data Warehousing
• Embedded Database
• Middleware
• Applic...
Company Profile
Scale
•
•
•
•
•
•

$37B FY13
#1 in 50 product or industry categories
400,000 customers in 145 countries
25...
Current Financial Performance

Year over Year Growth
FY13

Software Revenue

+7%

+8%

Hardware Revenue

-14%

-5%

Servic...
Revenue
FY2013 Geographic Distribution

Asia Pacific
17% of Total Revenue

Americas
53% of T t l R
f Total Revenue

EMEA
3...
Revenue
FY2013 Line of Business Distribution
Hardware Systems Support
6% of Total Revenue

Hardware Systems Products
8% of...
Software Revenue Grew 14% CAGR

$26.1B
$

$27.5B


$24.0B
$20.6B
$17.8B

$18.9B

$14.2B
$11.5B

+17%

$9.4B
$7.2B
$7 2B
+2...
Our Business Model Drives Recurring Revenue
$26.2B

$
$27.5B

$24.1B
$20.7B
$18.0B

54%

$19.1B

$14.4B
$11.9B
$9.7B
$7.2B...
Operating Margin Trends
11% Operating Margin Expansion

47%
46%

47%
46%

45%
44%

43%
41%
%

~ 4 mos
of Sun
included

41%...
Earnings Per Share Grew 20% CAGR
$2.68
$2.46
$2.22

$1.67
$1 67
$1.44
$1.30

+9%
+33%

$1.01
$0.68
$0 68
$0.43
+10%

FY03
...
Free Cash Flow Grew 17% CAGR
$13.1B
$13 1B

$13.6B

$10.8B
$8.5B
$8 5B
$7.2B

$7.7B
+22%

$5.2B

+27%

$4.3B
$2.7B

$3.0B
...
Investing for Growth
Sales Headcount Growth

,
9,900
8,500
7,200
6,400
5,800
5,300

5,700

4,200
2 500
2,500
800

1,200

2...
Investing for Innovation
Research & Development Headcount Growth

,
8,000
6,700
5,900

5,100

5,400

4,200
3,500
2,600
2 1...
Investing for Growth & Innovation


96% of Headcount Additions 

since June 1, 2010

have been in Sales and R&D


18

Sour...
Oracle Acquisitions

APPLICATIONS

MIDDLEWARE
Middleware Platform

Business Intelligence

and Management

Identity and Acc...
Sources and Uses of Cash
$83B in M&A and Shareholder Returns
$26B

$82B

($44B)

Proceeds
from
Financing

Acquisitions

($...
Capital Allocation
$42B in Buybacks and Dividends

$12.5B

$7.1B

$4.2B

$3.9B
$2.7B

$2.1B

$1.5B

FY03

FY05

FY06

FY07...
A Very Healthy Balance Sheet
• Return on Equity (TTM)
• Return on Assets (TTM)

14%

• Cash & Investment (MRQ)

$39B

Debt...
Comparative Performance


23
How Does Oracle Compare to Tech Peers?


24

We selected 12 Tech Peers and normalized each to Oracle’s fiscal year and agg...
How Does Oracle Compare to The Dow?


25

We included all Dow Jones 30 companies except financial services companies of Am...
Revenue

400

300

200

100

0
FY06

FY08

FY09

Oracle

26

FY07

FY10

Tech Peers

Source: FactSet. GAAP results were in...
Operating Income
400

300

200

100

0
FY06

FY08

FY09

Oracle

27

FY07

FY10

Tech Peers

Source: FactSet. GAAP results...
Net Income

400

300

200

100

0
FY06

FY08

FY09

Oracle

28

FY07

FY10

Tech Peers

Source: FactSet. GAAP results were...
Free Cash Flow

400

300

200

100

0
FY06

FY08

FY09

Oracle

29

FY07

FY10

Tech Peers

Source: FactSet. GAAP results ...
Earnings Per Share
400

300

200

100

0
FY06

FY08

FY09

Oracle

30

FY07

FY10

Tech Peers

Source: FactSet. GAAP resul...
Oracle Stock Has Performed Well

Compared to Broader Indices – 7 Year

2006

2007

2008

Oracle
O l

31

2009

Nasdaq
d

2...
32
33
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  1. 1. 1
  2. 2. Annual Stockholder Meeting October 31, 2013 Jeff Henley Chairman of th B d Ch i f the Board 2
  3. 3. 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 looking statements and are subject to material risks and forward-looking statements" 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 economic crisis and slowing economic conditions in other parts of the world, 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 y g particular quarter, unanticipated fluctuations in currency exchange rates, delays in delivery of new products or releases or a decline in our renewal rates for support contracts. (3) Our hardware systems revenues and profitability could decline further, 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. (6) Our periodic workforce restructurings, including reorganizations of our sales force, can be disruptive. (7) If we are unable to develop new or sufficiently differentiated products force disruptive 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, cloud software subscriptions 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) 506-4073 or by clicking on SEC Filings on Oracle’s Investor Relations website at ) y g g http://www.oracle.com/investor. All information set forth in this presentation is current as of October 31, 2013. Oracle undertakes no duty to update any statement in light of new information or future events. 3
  4. 4. Non-GAAP Financial Measures To supplement our financial results presented on a GAAP basis we basis, use non-GAAP measures, which exclude certain business combination accounting entries and expenses related to acquisitions, as well as other significant expenses including stockbased compensation, that we believe are helpful in understanding our past financial performance and our future results. Our nonGAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be considered only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Today’s discussion c udes certain o G d scuss o includes ce a non-GAAP financial measures, which a ca easu es, c were included in our earnings releases. 4
  5. 5. Oracle Strategy Complete Stack • • • • • 5 Complete Customer Choice • On-Premise Best-of-Breed Open Vertical Integration Extreme Performance Engineered Systems • Private Cloud • Public Cloud • Hybrid Cloud
  6. 6. Best-in-Class Leader • Database • Database on Solaris & Linux • Data Warehousing • Embedded Database • Middleware • Application Servers • Identity and Access Management • Enterprise Performance Management 6 • Human Capital Management • Customer Relationship Management • Project Portfolio Management • Communications • Retail • Financial Services • Banking • Insurance • Public Sector • Professional Services
  7. 7. 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 • • • • 7 35,000 developers and engineers 18,000 customer support specialists, speaking 29 languages 18,000 implementation consultants 2.5 2 5 million students supported annually Headcount current as of Q1 FY2014.
  8. 8. Current Financial Performance Year over Year Growth FY13 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 8 Q1 FY14 $14B $6B Unless stated otherwise, year-over-year growth rates are non-GAAP and presented in constant currency. GAAP to Non-GAAP reconciliations are available at www.oracle.com/investor.
  9. 9. Revenue FY2013 Geographic Distribution Asia Pacific 17% of Total Revenue Americas 53% of T t l R f Total Revenue EMEA 30% of Total Revenue 9 Source: GAAP Results.
  10. 10. 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 New Software Licenses 28% of Total Revenue 10 Source: GAAP Results. Software License Updates & Support 46% of Total Revenue
  11. 11. Software Revenue Grew 14% CAGR $26.1B $ $27.5B $24.0B $20.6B $17.8B $18.9B $14.2B $11.5B +17% $9.4B $7.2B $7 2B +2% FY03 11 $8.1B +12% FY04 26% +26% +17% FY05 +23% FY06 +6% +9% +5% FY12 FY13 +9% +23% FY07 FY08 FY09 Source: GAAP Results. Compounded Annual Growth Rate from FY03 to FY13, or 10 years FY10 FY11
  12. 12. Our Business Model Drives Recurring Revenue $26.2B $ $27.5B $24.1B $20.7B $18.0B 54% $19.1B $14.4B $11.9B $9.7B $7.2B $7 2B $8.1B 44% FY03 FY04 FY05 FY06 New Software License 12 FY07 FY08 FY09 First Year Support FY10 FY11 FY12 FY13 Continuing Support Source: Non-GAAP Results. GAAP to Non-GAAP reconciliations are available at www.oracle.com/investor. “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”
  13. 13. Operating Margin Trends 11% Operating Margin Expansion 47% 46% 47% 46% 45% 44% 43% 41% % ~ 4 mos of Sun included 41% % 40% 39% 36% FY03 13 FY04 FY05 FY06 FY07 FY08 FY09 1H10 2H10 Source: Non-GAAP Results. GAAP to Non-GAAP reconciliations are available at www.oracle.com/investor. FY11 FY12 FY13
  14. 14. Earnings Per Share Grew 20% CAGR $2.68 $2.46 $2.22 $1.67 $1 67 $1.44 $1.30 +9% +33% $1.01 $0.68 $0 68 $0.43 +10% FY03 14 $0.80 +19% FY04 +16% +29% $0.51 +11% +11% +26% +33% +18% FY05 FY06 FY07 FY08 FY09 FY10 Source: Non-GAAP Results. GAAP to Non-GAAP reconciliations are available at www.oracle.com/investor. FY11 FY12 FY13
  15. 15. Free Cash Flow Grew 17% CAGR $13.1B $13 1B $13.6B $10.8B $8.5B $8 5B $7.2B $7.7B +22% $5.2B +27% $4.3B $2.7B $3.0B $3.4B $ -4% +12% FY03 15 +10% FY04 FY05 +38% +28% FY06 +4% +8% +9% +21% FY07 FY08 FY09 Source: Non-GAAP Results. Compounded Annual Growth Rate from FY03 to FY13, or 10 years. FY10 FY11 FY12 FY13
  16. 16. Investing for Growth Sales Headcount Growth , 9,900 8,500 7,200 6,400 5,800 5,300 5,700 4,200 2 500 2,500 800 1,200 2,800 , 1,600 Q1FY11 Q2FY11 Q3FY11 Q4FY11 Q1FY12 Q2FY12 Q3FY12 Q4FY12 Q1FY13 Q2FY13 Q3FY13 Q4FY13 Q1FY14 16 Source: Company
  17. 17. Investing for Innovation Research & Development Headcount Growth , 8,000 6,700 5,900 5,100 5,400 4,200 3,500 2,600 2 100 2,100 1,300 500 1,600 700 Q1FY11 Q2FY11 Q3FY11 Q4FY11 Q1FY12 Q2FY12 Q3FY12 Q4FY12 Q1FY13 Q2FY13 Q3FY13 Q4FY13 Q1FY14 17 Source: Company
  18. 18. Investing for Growth & Innovation 96% of Headcount Additions since June 1, 2010 have been in Sales and R&D 18 Source: Company
  19. 19. Oracle Acquisitions APPLICATIONS MIDDLEWARE Middleware Platform Business Intelligence and Management Identity and Access Management Performance Management Enterprise Content Management Data Integration DATABASE OPERATING SYSTEM AND VIRTUAL MACHINE Operating System Systems Management SERVERS AND STORAGE 19 Virtual Machine
  20. 20. Sources and Uses of Cash $83B in M&A and Shareholder Returns $26B $82B ($44B) Proceeds from Financing Acquisitions ($39B) Cash from Operations and Other Buybacks & Dividends $32B $7B FY03 20 Source: GAAP results. FY13
  21. 21. Capital Allocation $42B in Buybacks and Dividends $12.5B $7.1B $4.2B $3.9B $2.7B $2.1B $1.5B FY03 FY05 FY06 FY07 Buybacks 21 $2.2B FY10 FY11 $1.3B FY04 $2.0B $2.0B Source: GAAP Results. FY08 FY09 Dividends FY12 FY13
  22. 22. A Very Healthy Balance Sheet • Return on Equity (TTM) • Return on Assets (TTM) 14% • Cash & Investment (MRQ) $39B Debt i • D b to Equity (MRQ) .96x 96 • Net Cash (MRQ) 22 25% $15B Figures presented above are based on GAAP results for the four most recent quarters including Q1 FY2014. TTM – Trailing Twelve Months; MRQ – Q1 FY2014
  23. 23. Comparative Performance 23
  24. 24. How Does Oracle Compare to Tech Peers? 24 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.”
  25. 25. How Does Oracle Compare to The Dow? 25 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.
  26. 26. Revenue 400 300 200 100 0 FY06 FY08 FY09 Oracle 26 FY07 FY10 Tech Peers Source: FactSet. GAAP results were indexed to 100 for FY06 (or closest 4 quarter period); subsequent periods were indexed to FY06 to show trend on a common basis. FY11 Dow 30 FY12 FY13 FY13
  27. 27. Operating Income 400 300 200 100 0 FY06 FY08 FY09 Oracle 27 FY07 FY10 Tech Peers Source: FactSet. GAAP results were indexed to 100 for FY06 (or closest 4 quarter period); subsequent periods were indexed to FY06 to show trend on a common basis. FY11 Dow 30 FY12 FY13 FY13
  28. 28. Net Income 400 300 200 100 0 FY06 FY08 FY09 Oracle 28 FY07 FY10 Tech Peers Source: FactSet. GAAP results were indexed to 100 for FY06 (or closest 4 quarter period); subsequent periods were indexed to FY06 to show trend on a common basis. FY11 Dow 30 FY12 FY13 FY13
  29. 29. Free Cash Flow 400 300 200 100 0 FY06 FY08 FY09 Oracle 29 FY07 FY10 Tech Peers Source: FactSet. GAAP results were indexed to 100 for FY06 (or closest 4 quarter period); subsequent periods were indexed to FY06 to show trend on a common basis. FY11 Dow 30 FY12 FY13 FY13
  30. 30. Earnings Per Share 400 300 200 100 0 FY06 FY08 FY09 Oracle 30 FY07 FY10 Tech Peers Source: FactSet. GAAP results were indexed to 100 for FY06 (or closest 4 quarter period); subsequent periods were indexed to FY06 to show trend on a common basis. FY11 Dow 30 FY12 FY13 FY13
  31. 31. Oracle Stock Has Performed Well Compared to Broader Indices – 7 Year 2006 2007 2008 Oracle O l 31 2009 Nasdaq d 2010 S&P 500 2011 Dow J Jones Source: FactSet Research. Prices for the last 7 years were indexed (September 2006 – September 2013) 2012 2013
  32. 32. 32
  33. 33. 33
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