Oracle becomes second largest Cloud SaaS company in the world
Tuesday, 24 June 2014 00:01
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Q4 SaaS and PaaS subscriptions up 25% to $ 322 million, Q4 IaaS subscription revenue up 13% to $ 128 million
Oracle Corporation has announced that fiscal 2014 Q4 total revenues were up 3% to $ 11.3 billion. Software and Cloud revenues were up 4% to $ 8.9 billion.
GAAP Cloud software-as-a-service (SaaS) and platform-as-a-service (PaaS) revenues were up 25% to $ 322 million, while non-GAAP SaaS and PaaS revenues were up 23% to $ 327 million. In addition, Cloud infrastructure-as-a-service (IaaS) revenues were up 13% to $ 128 million.
New software licenses revenues were unchanged at $ 3.8 billion. Software license updates and product support revenues were up 7% to $ 4.7 billion. Overall hardware systems revenues were up 2% to $ 1.5 billion with hardware systems products up 2% to $ 870 million, and hardware systems support up 2% to $ 596 million.
In Q4, both GAAP and non-GAAP earnings per share were lowered by $ 0.02 due to a non-operating loss caused by exchange rate changes in Venezuela. Furthermore, last year’s Q4 GAAP earnings per share increased $ 0.04 because of a $ 269 million acquisition price reduction. As a result of these two factors, Q4 GAAP earnings per share were unchanged at $ 0.80 compared with last year, while GAAP net income was down 4% to $ 3.6 billion, and GAAP operating income was down 2% to $4.9 billion. Q4 GAAP operating margin was 43% in the quarter.
Non-GAAP earnings per share were up 6% to $ 0.92, but would have been $ 0.94 if not for the currency loss in Venezuela. Non-GAAP net income was up 2% to $ 4.2 billion while non-GAAP operating income was up 3% to $ 5.8 billion. The non-GAAP operating margin was 51%. GAAP operating cash flow on a trailing twelve-month basis was $ 14.9 billion.
For fiscal year 2014, total revenues were up 3% at $ 38.3 billion. GAAP Software and Cloud revenues were up 5%. GAAP Cloud SaaS and PaaS revenues were up 23% to $ 1.1 billion while Cloud IaaS revenues were $ 456 million.
New software licenses revenues were unchanged at $ 9.4 billion while software license updates and product support revenues were up 6% to $ 18.2 billion. Total hardware system revenues were flat at $ 5.4 billion. GAAP operating income was up 1% to $ 14.8 billion, and GAAP operating margin was 39%. Non-GAAP operating income was up 3% to $ 18.1 billion, and non-GAAP operating margin was 47%. GAAP net income was unchanged at $ 11.0 billion, while non-GAAP net income was up 2% to $ 13.2 billion. GAAP earnings per share were $ 2.38, up 5% compared to last year while non-GAAP earnings per share were $ 2.87, up 7%.
“Our cloud subscription business is now approaching a run rate of $ 2 billion a year,” said Oracle President and CFO Safra Catz. “As our business has transitioned, more software revenues are being recognised over the life of a subscription rather than upfront. We’re making this transition to cloud subscriptions and ratable revenue recognition while continuously increasing our top-line revenue and our bottom-line profits year-after-year.”
“We have transformed Sun’s commodity hardware business into a profitable and growing Engineered Systems business,” said Oracle President Mark Hurd. “Our overall hardware business grew 2% in constant currency this past year. We saw record levels of Engineered Systems shipments and expect to deliver our 10,000th unit in Q1.”
“Oracle is now the second largest SaaS company in the world,” said Oracle CEO Larry Ellison. “In SaaS, we’re in front of everybody but salesforce.com. In IaaS we’re larger and more profitable than Rackspace. We have by far the most complete portfolio of modern SaaS and PaaS products in the industry: CRM: Sales, Service & Marketing; HCM: HR, Payroll & Talent; ERP: Accounting, Procurement, Supply Chain & more. All these SaaS products run on the world’s most powerful PaaS: the Oracle in-memory multitenant database and Java. We plan to increase our focus on the Cloud and become number one in both the SaaS and the PaaS businesses.”
Oracle looks to boost growth with biggest deal in 5 years
To buy Micros Systems in $ 5.3 b in deal to expand offerings for the hospitality and retail industries
Reuters: Oracle Corp said it would buy Micros Systems in a $5.3 billion deal as the world’s No.2 business software maker looks to boost flagging growth through acquisitions.
The purchase of Micros, which makes point-of-sale hardware and software for restaurants and hotels, is the first multi-billion dollar acquisition by Oracle in five years and follows disappointing fourth-quarter results.
Analysts said the acquisition could be first in a string of deals for Oracle, which has been stung by aggressive pricing by companies such as Salesforce.com Inc and Workday Inc for their software and internet-based products.
“We view this morning’s Micros deal as just the start of what we expect will be a surge of M&A activity for Oracle over the coming year ...,” FBR Capital Markets analyst Daniel Ives wrote in a note to clients.
“It is clear to us that the company needs to quickly put more ‘growth fuel in its engine’ to catalyze growth in the top-line,” Ives said. Larry Ellison-led Oracle’s spree of acquisitions has slowed of late. Micros is the company’s largest acquisition since its $5.6 billion purchase of Sun Microsystems in 2009.
Oracle said on Monday it offered Micros shareholders $68 per share, representing a premium of 3.4 percent to the stock’s Friday close. Micros shares were trading at $67.87 a few minutes after the opening on Monday. Up to Friday’s close, they had risen 14% since Bloomberg reported on 17 June that the companies were in talks. Ives said the Micros deal could help Oracle stave off threat from e-commerce software providers such as Demandware Inc and NetSuite Inc. Oracle reported on Thursday flat new software sales and internet-based software subscriptions in its fiscal fourth quarter, disappointing investors looking for progress against rivals selling Web-based services.
Oracle said the transaction is expected to add to earnings immediately.
