Oracle: the strengthening of the U.S. dollar impacts on results

Without the effect of U.S. Dollar strengthening (significant impact on results in the quarter), gaap EPS of $0.50 and non-gaap EPS of $0.64 would have been 4 cents higher.

oracle quarter resultsOracle Corporation (NYSE: ORCL) announced fiscal 2016 Q3 results. The strengthening of the U.S. dollar compared to foreign currencies had a significant impact on results in the quarter. Total Revenues were $9.0 billion, down 3% in U.S. dollars and up 1% in constant currency. Cloud plus On-Premise Software Revenues were $7.1 billion, down 1% in U.S. dollars and up 3% in constant currency. Cloud software as a service (SaaS) and platform as a service (PaaS) revenues were $583 million, up 57% in U.S. dollars and up 61% in constant currency. Cloud infrastructure as a service (IaaS) revenues were $152 million, down 2% in U.S. dollars and up 2% in constant currency. Total Cloud Revenues were $735 million, up 40% in U.S. dollars and up 44% in constant currency. Total On-Premise Software Revenues were $6.3 billion, down 4% in U.S. dollars and unchanged in constant currency. Total Hardware Revenues were $1.1 billion, down 13% in U.S. dollars and down 8% in constant currency. Total Services Revenues were $793 million, down 7% in U.S. dollars and down 2% in constant currency.

Operating Income was $3.0 billion and Operating Margin was 34%. Non-GAAP Operating Income was $3.8 billion and non-GAAP Operating Margin was 42%. Net Income was $2.1 billion while non-GAAP Net Income was $2.7 billion. Earnings Per Share was $0.50, while non-GAAP Earnings Per Share was $0.64. Without the impact of the U.S. dollar strengthening compared to foreign currencies, Oracle’s reported GAAP and non-GAAP Earnings Per Share would have been 4 cents higher.

Short-term deferred revenues were $6.9 billion, up 7% in U.S. dollars and up 11% in constant currency compared with a year ago. Operating cash flow on a trailing twelve-month basis was $14.1 billion.

Our Cloud SaaS and PaaS revenue growth rate accelerated to 61% in constant currency in Q3. This dramatic revenue increase drove our non-GAAP SaaS and PaaS gross margins up to 51% in Q3 as compared with 43% in Q2. Our cloud business is now in a hyper-growth phase. Our gross margins are climbing toward our target of 80%. These two factors will ignite substantial EPS and cash flow growth over Oracle’s next few quarters” said Oracle CEO, Safra Catz.