Financial: Oracle Reports 22% Software License Growth in Q4, Net Income Increases 31% to 36 Cents Per Share - Company Financial Information

Edge: Work-Group Computing Report, June 21, 1999

Oracle Corporation (Nasdaq: ORCL), the world's second largest software company, Tuesday announced record fourth quarter and fiscal year end results for the period ended May 31, 1999. For fiscal year 1999, revenue grew 24% to $8.8 billion while net income increased 35% to $1.3 billion, or $0.87 per share.

This compares to revenue of $7.1 billion and net income of $955 million, or $0.64 per share, for fiscal year 1998, excluding one-time charges. For the fourth quarter revenue increased 22% to $2.9 billion from $2.4 billion in the same period last year. Net income for the period increased 31% to $527 million, or $0.36 per share, compared to net income of $403 million, or $0.27 per share, in the same period last year. Overall, Q4 software license revenue grew 22% year-over-year. Specifically, database software sales increased 25%, applications software sales increased 28%, while services revenue increased 22%, versus Q4 last year. These results solidify Oracle's position as the world's number one supplier of database software. In fact, the latest survey from IDC reports that Oracle's overall relational database market share is now more than double that of the Company's closest competitor, IBM DB2. IDC shows Oracle with a 40.4% share, IBM DB2 with a 17.8% share and Microsoft SQL Server with a 5.1% share. (This independent research study dramatically contradicts reports circulating in the media that IBM DB2 has taken a narrow lead over Oracle in the database market.) In the rapidly growing UNIX and Windows NT relational database markets, Oracle's lead over IBM DB2 is much greater. On UNIX, Dataquest reports that Oracle has a 61.1% share, over 8 times larger than the IBM DB2 share of 7.4%. On Windows NT, Dataquest shows Oracle with a 47.3% share, again far larger than the IBM DB2 share of 9.9%. "We view the database survey results on UNIX and Windows NT as most telling," said Larry Ellison, Oracle Corporation founder and CEO. "These are the operating systems that power the Internet. This is the growth segment of the market." "Oracle's applications software license growth rate of 28% is especially impressive when you consider the following two facts," Ellison continued. "Y2K is just around the corner. And every other ERP vendor -- SAP, Peoplesoft, BAAN and JD Edwards -- has reported declines of software sales in their most recent quarter. Furthermore, our CRM software business grew so fast in the fourth quarter that we passed all but one of our CRM competitors. "The reason that our ERP and CRM application software businesses are growing much faster than our competitors' is because we offer 100% pure Internet server based applications," Ellison explained. "All you need to use any Oracle application is a standard Internet browser. In contrast, all of our competitors (with the exception of Ariba) still sell older, more costly client-server technology." "We've now shown four consecutive quarters of consistent margin improvement," said Jeffrey O. Henley, Executive Vice President and Chief Financial Officer. "This kind of margin expansion over the next couple of years will be possible principally through continued productivity gains, as we transform our business to an e-business." During the 1999 fiscal year, Oracle delivered 100% Internet enabled versions of its major product lines: *On March 1, 1999, Oracle announced the immediate availability of Oracle8i, the world's first Internet database and the core of Oracle's Internet Platform. Oracle 8i was built on 20 years of experience in providing scalable, reliable and secure database systems. Oracle's Internet Platform, comprised of Oracle8i, Oracle Application Server and Oracle's Internet development tools, uniquely delivers the technology required to move an entire business to the Web. In just six months more than 250,000 Internet developers have joined Oracle's online resource for Internet development, increasing the membership by more than 300%. * On May 26, 1999, Oracle announced the availability of Oracle CRM 3i, the third generation of Oracle's customer relationship management applications, and the first 100% Internet-enabled marketing, sales and service applications. By integrating all front office applications, Oracle CRM3i manages all aspects of customer relations necessary for an effective e-business through channels including the web, direct sales forces and call centers. Oracle CRM 3i offers solutions for both business-to-business and business-to-consumer web stores, Internet bill, payment and presentment and Internet marketing. * During the 1999 fiscal year, Oracle announced the successful completion of the Oracle Business OnLine(TM) pilot program, the world's leading Internet application software hosting service. During the pilot phase, Oracle proved that it could run mission-critical applications software for its customers more economically and efficiently on Oracle Applications. With their financial, manufacturing or human resources software systems up and running in record time, the first three pilot phase customers -- Core Technology Group, Robert Mondavi Corp. and Triton Network Systems -- substantially reduced their IT costs. Since the completion of the pilot program, Oracle Business OnLine continues to build momentum, with a total of 15 customers signed on to date. Oracle Corporation is the world's second largest software company. With annual revenues of more than $8.8 billion, Oracle offers its database, tools and application products, along with related consulting, education and support services, in more than 145 countries around the world. FMI: www.oracle.com.