Oracle(ORCL)2025-03-11 20:11Revenue Composition - The cloud and license business accounted for 85% of total revenues on a trailing 4-quarter basis [93]. - Cloud services revenues represented 44% and 43% of total revenues for the three- and nine-month periods ended February 28, 2025, respectively, compared to 38% and 37% for the same periods in 2024 [95]. - The hardware business represented 5% of total revenues on a trailing 4-quarter basis [99]. - The services business accounted for 10% of total revenues on a trailing 4-quarter basis [103]. - The cloud and license business accounted for 86% of total revenues in the third quarter of fiscal 2025, up from 84% in the prior year [116]. Revenue Growth - Total revenues increased by 2.8 billion (7%) in the first nine months of fiscal 2025 compared to the prior year periods [117]. - Cloud and license revenues rose by 3.1 billion (10%) in the first nine months of fiscal 2025, while hardware revenues decreased by 138 million (6%) respectively [117]. - The Americas region contributed 75% to total revenue growth in the third quarter and 74% in the first nine months of fiscal 2025, while the EMEA region contributed 18% [117]. - The Americas region contributed 74% of the cloud services revenue growth in Q3 2025, while EMEA and Asia Pacific contributed 20% and 6%, respectively [125]. Operating Expenses - Total operating expenses increased by 920 million (3%) in the first nine months of fiscal 2025, primarily due to higher cloud services and license support expenses [118]. - Total expenses for the cloud and license business increased by 1.4 billion (12%) in the first nine months, primarily due to higher infrastructure and employee-related expenses [126]. - Total expenses for the hardware business decreased by 143 million (17%) in the first nine months, aligning with lower revenues [131]. - Total expenses decreased by 257 million (down 7%) in the first nine months compared to the prior year [135]. Profit Margins - In constant currency, total operating margin increased to 31% in the third quarter of fiscal 2025, up from 28% in the prior year [116]. - Total margin for the cloud and license business was 450 million (64% margin) in Q3 2025, showing a 5% decrease from the prior year [130]. Research and Development - Research and development investments are anticipated to improve existing products and develop new offerings across all business segments [100]. - Research and development expenses increased by 517 million (8%) in the first nine months of fiscal 2025 compared to the prior year [118]. - The company plans to continue significant investments in research and development to maintain its competitive position [138]. Acquisitions and Investments - The company has invested billions in acquisitions to enhance its corporate strategy and may continue to do so as opportunities arise [104]. - The total carrying value of investments in Ampere Computing Holdings LLC was 17.8 billion as of February 28, 2025, compared to 14.7 billion in the first nine months of fiscal 2025, a 16% increase from 12.5 billion in the first nine months of fiscal 2025, compared to 5.8 billion in the trailing four quarters ended February 28, 2025, compared to 892 million, a 2% increase compared to 14.0 billion in senior notes [151]. - Interest income increased by 22% to 111 million in the same period of fiscal 2024 [154]. - During the first nine months of fiscal 2025, the company issued 1.75 billion of 6.00% senior notes due August 2055 [172]. Stock-Based Compensation - Stock-based compensation expenses totaled 3.374 billion in the first nine months of fiscal 2025, reflecting an increase from the prior year [122]. - The cumulative potential dilution from stock-based awards since June 1, 2021, has been an annualized rate of 1.7% per year, with a maximum potential dilution of 5.8% as of February 28, 2025 [177]. - The company’s stock repurchase program has substantially offset the dilutive effect of its stock-based compensation program in recent years [177]. Tax and Other Income - Provision for income taxes increased to 464 million in the same period of fiscal 2024 [158]. - Non-operating income, net increased by 76 million decrease in foreign currency losses and a $38 million increase in interest income [156].