Oracle Japan : Flash Report for the 2nd Quarter of Fiscal Year Ending May 31, 2022

Oracle Corporation Japan (4716) Flash Report for the 2nd Quarter of Fiscal Year Ending May 31, 2022 (Non-consolidated)

This flash report is unaudited and the translation of the Japanese language version.

Flash Report for the 2nd Quarter of Fiscal Year Ending May 31, 2022

[under Japanese GAAP] (Non-consolidated)

December 21, 2021

Company Name

Oracle Corporation Japan

Listed Stock Exchange: TSE 1st Section

Ticker: 4716

URL:

http://www.oracle.com/jp/corporate/investor-relations/index.html

Representative & Contact personal

Telephone: [phone]

Representative personal

Hiroko Utsumi, Representative Corporate Executive Officer & Managing Counsel

Contact personal

Yuki Nishio, Director, Investor Relations

Quarterly Report Filing Date (as planned): January 11, 2022

Schedule for dividends payment: -

Preparation of supplementary materials on quarterly financial results: Yes

Holding of quarterly financial results conference: Yes (for analysts and institutional investors)

(Amount of less than ¥1 million are rounded down)

1. Financial results for this term (from June 1, 2021 to November 30, 2021)

(1) Operating result

(% of change from previous year)

Revenue

Operating Income

Ordinary Income

Net Income

Million Yen

％

Million Yen

％

Million Yen

％

Million Yen

％

2nd Quarter, May 2022

102,084

1.8

34,079

3.1

34,177

3.5

23,685

3.5

2nd Quarter, May 2021

100,246

2.8

33,067

10.0

33,022

9.9

22,874

10.0

Net income per share

Net income per share

(diluted)

Yen

Sen

Yen

Sen

2nd Quarter, May 2022

184

94

184

88

2nd Quarter, May 2021

178

55

178

41

1. Financial Position

	Total Assets	Net Assets	Ratio of shareholders'
	equity
	Million Yen	Million Yen	%
2nd Quarter, May 2022	194,366	97,804	50.3
FY ended May 2021	333,999	219,999	65.8

Shareholders' equity 2nd Quarter, May 2022: 97,692 Million Yen (FY2021: 219,881 Million Yen)

2. Dividends

						Dividend per share
	1st Quarter			2nd Quarter		3rd Quarter		Fiscal Year		Total
	end			end		end		End
	Yen	Sen		Yen	Sen	Yen	Sen	Yen	Sen	Yen	Sen
FY ended May 2021	-		0	00	-		1,146	00	1,146	00
FY ending May 2022	-		0	00
FY ending May 2022(Forecast)						-		-		-

(Note1) Revision of outlook for dividends in this quarter: No

(Note2) Year-end dividend for this fiscal year has yet to be determined.

3. Forecast for the May 2022 term (from June 1, 2021 to May 31, 2022)

(% of change from previous year)

		Revenue	Net income
		per share
		%	Yen
Entire term	1.0~4.0	385.00~395.00
(Note1)	Revision of forecast for May 2022 term in this quarter: No
(Note2)	Company uses ranges of values for the forecast. Please refer to 1. Qualitative Information on Results in the Quarter under
	Review, (3) Qualitative Information on Forecasts, on page 4.
(Note3)	Estimation of effective tax rate is 30.8%

Oracle Corporation Japan (4716) Flash Report for the 2nd Quarter of Fiscal Year Ending May 31, 2022 (Non-consolidated)

4. Other information

1. Adoption of specified accounting methods for the preparation of quarterly non-consolidated financial statements: Yes
2. Changes in accounting policies, procedures, presentation rules, etc

1. Changes in accounting policies due to revision of accounting standards : Yes
2. Changes in accounting policies due to reasons other than (i): None
3. Changes in accounting estimates : None
4. Restatements : None

1. The number of shares outstanding (common stock)

1. The number of shares outstanding (inclusive of treasury stock)
2. The number of treasury stock
3. The number of average shares outstanding (cumulative, non-consolidated, at end of third quarter)

2nd Quarter, May 2022	128,251,571	shares
FY ended May 2021	128,240,971	shares
2nd Quarter, May 2022	120,844	shares
FY ended May 2021	201,781	shares
2nd Quarter, May 2022	128,068,299	shares
2nd Quarter, May 2021	128,110,546	shares

(Note) The Company's stock held by Board Incentive Plan Trust and Employee Stock Ownership Plan Trust is included in the number of treasury stock.

The treasury shares which remain in the BIP trust and the ESOP trust are included in the treasury stock to be deducted in the calculation of the number of average shares outstanding during the term.

Caution1:

These quarterly financial statements are outside the scope of quarterly review procedures.

Caution2:

Above forecast is based on the information available at a time of issuance of this report, and the actual result may change by various reasons. Please refer to Qualitative information on Forecasts, on page 4.

Oracle Corporation Japan (4716) Flash Report for the 2nd Quarter of Fiscal Year Ending May 31, 2021 (Non-consolidated)
[Table of Contents of Attached Material]
1. Qualitative Information on Results in the Quarter under Review---------------------------------------------	2
(1)	Qualitative Information on Business Outcomes ------------------------------------------------------------	2
(2)	Qualitative Information on Financial Situation-------------------------------------------------------------	4
(3)	Qualitative Information on Forecasts-------------------------------------------------------------------------	4
2. Quarterly Financial Statements and Main Notes ----------------------------------------------------------------	5
(1)	Quarterly Balance Sheet---------------------------------------------------------------------------------------	5
(2)	Quarterly Statement of Income--------------------------------------------------------------------------------	6
(3)	Statement of Cash Flows---------------------------------------------------------------------------------------	7
(4)	Notes to Quarterly Financial Statements---------------------------------------------------------------------	8
	Notes to Going Concern----------------------------------------------------------------------------------------	8
	Notes to significant changes in the stockholders' equity--------------------------------------------------	8
	Adoption of specified accounting methods for the preparation of quarterly non-consolidated
		8
	Financial statements -------------------------------------------------------------------------------------------
	Changes in Accounting Policies ------------------------------------------------------------------------------	8
	Additional Information ----------------------------------------------------------------------------------------	8
	Application of Accounting Standard, etc. for Revenue Recognition ------------------------------------	8
	Segment Information, etc. -------------------------------------------------------------------------------------	9

1

Oracle Corporation Japan (4716) Flash Report for the 2nd Quarter of Fiscal Year Ending May 31, 2022 (Non-consolidated)

1. Qualitative Information on Results in the Quarter under Review

1. Qualitative Information on Business Outcomes

Overview

During the second quarter under review (from June 1, 2021 to November 30, 2021, hereinafter "this quarter"), the Japanese information services industry in which the Company operates were gradually recovering in migrating to the Cloud and IT investment aimed at corporate growth and boosting competitiveness, including investing in new technologies exemplified by Autonomous, AI, Machine learning or Deep leaning technology, improving efficiency through the use of variable digital data, soaring data volume because of remote working, and strengthening contact points with end users.

In this business environment, the Company is expanding our Cloud business for realizing Customers' innovation, for their business transformation, and for supporting their firm growth.

As the COVID-19 virus (Coronavirus) was showing up in early 2020, the Company recognizes that one of its most important business missions is to protect safety and health of its employees' and customers' and to continue its business stably. The Company has shifted promptly to remote working style and pressed ahead with efforts to ensure efficient risk management and to strengthen our sales capabilities continuously.

As a result of these measures, the Company posted 102,084 million yen (up 1.8 % year on year) in revenue, 34,079 million yen (rising 3.1 %) in operating income, 34,177 million yen (gaining 3.5 %) in ordinary income and 23,685 million yen (increasing 3.5 %) in net income.

The Company is delivering our value to strive further business growth by achieving customer's innovation and supporting their business transformation by utilizing cloud service and data.

For revenue and each profit category indicated attained hit record high as this quarter (six months ended).

Go to Market Strategy

Our mission is to help people see data in new ways, discover insights, unlock endless possibilities. The Company is aiming for further business growth by supporting our customers' cloud migration of their core systems and active data utilization with deepen customer-trust, which is based on "Be a TRUSTED TECHNOLOGY ADVISOR". We have practiced DX (Digital Transformation) with our Cloud Journey to the Cloud by own technology which brought business success to ourselves. By accelerating to deploy and implement our technology to the customers, we support their Cloud Journey to Data-driven DX.

The Company has the comprehensive product portfolio which consists of platform, applications, hardware which can be deployed on cloud environment and on-premise environment. Especially our software license products have been widely adopted in the field of mission critical systems, which have demanded high security, availability and high performance for many years. The Oracle Cloud, which the Company has focused on as a pillar of its new business, has been developed based on the same system architecture and technologies as these software licenses, and the Company enjoys a strength in enabling coordination and bidirectional migration between on-premises systems built with the software licenses products and the Oracle Cloud.

The Company is further accelerate to provide its Cloud services, which maximize the value of information by data-driven approaching and supporting services for customers to utilize our Cloud Services that we have been focusing on, hereby the Company drives its customers' DX.

The four measures which make "To Accelerate Cloud Transformation" 1) Realization of data-driven DX by SaaS

We promote aggressively DX by deploying and implementing Oracle Cloud ERP / HCM, / CX to our customers, which focuses on large-scale and strategic transactions.

2) Modernization of IT infrastructure with Hybrid Cloud

We move large-scale workloads of mission-critical systems to OCI (Oracle Cloud Infrastructure) and focus on increasing the number of cloud engineers.

3) Promotion of Social infrastructure DX

We strengthen the sales team of the public sector that has led to promote DX of social infrastructure, and support the Smart city projects of local governments.

4) Expansion of partner ecosystem

We support the buildup OCI / SaaS delivery system by deploying "Dedicated Region Cloud @Customer", which builds Oracle's public cloud in the customer's data center to strategic partners.

2

Oracle Corporation Japan (4716) Flash Report for the 2nd Quarter of Fiscal Year Ending May 31, 2022 (Non-consolidated)

In the role of promoting strategy, the Company is expanding the capacity of two datacenters in Tokyo and Osaka region so that it has built Disaster Recovery service system and has delivered its cloud services corresponding to enterprise workload and security.

In terms of the structure of sales team, it deployed into Cloud and License, and newly built the sales team for specialized the public sector. We expand our cloud business by "Team Collaboration", add value sales with our support and consulting services.

(Glossary)

• Cloud service: Providing software and hardware resources which are used for IT system infrastructure at companies and other organizations as services under agreements for certain periods through the networks such as Internets.
• On-premises:A form of IT system developed and operated as the company's possession.

Business status in the 2nd Quarter of the fiscal year (from September 1, 2021 to November 30, 2021)[Cloud & Licenses]

In the Cloud license and on-premise license, the Company has developed its strength of products and services to its Customers under our strategy stated above.

Regarding our License business, in the last six months, given the state of emergency announced by the Government in Japan, we had to overcome the challenge as we conducted our business. Since starting this fiscal year, the market is showing gradually some signs of a recovery trend in IT investment which is not only for cost reduction but developing and growing their business. Revenue in License business decline year on year because of the previous large quarter, while we captured demands from the distribution service and the manufacturing industries. However we are continuously examining our business status henceforth owing to the range of investment momentum depends on the industry.

In terms of Partner business side, we are expanding our cooperative ties of alliance and creating new demands on SME market segment.

Concerning the Cloud services, we delivered some achieve results for Cloud Migration (from On- premise to Cloud services) which are mainly "Oracle Fusion Cloud ERP" to our install-based customers, and also it has been deployed to the new customers in variable industries for accelerating Cloud shifting. Regarding "Oracle Cloud Infrastructure (OCI)", there is a lot of demands from customers putting a weight on performance, security and cost effectiveness that has led to the usage of our Tokyo and Osaka region data center are successfully increasing continuously with expansion its Cloud datacenter.

Also we have been keeping the high renewal rate of license support contracts and the attach rate for the Cloud license and on-premise license.

NetSuite for SME market remained brisk performance in adding new customers who adopted Cloud ERP.

[Hardware Systems]

In Hardware Systems segment, the Company released "Oracle Exadata Database Machine X9M" (upgraded version of X8M) combines Intel® Optane™ DC persistent memory in September 2021. The inquiry for this machine is strong, while we have supply chain issues because of shortage of the semiconductor chip worldwide. Exadata X9M removes storage bottlenecks and dramatically increase performance for the most demanding workloads such as Online Transaction Processing (OLTP), analytics, IoT, fraud detection, and high frequency trading.

[Services]

In Services segment, the number of composite projects from Consulting Services taking advantage of the Company's comprehensive product and service portfolio has increased steadily. They include projects for platform transition from the on-premise environment to the IaaS and PaaS environment and those for linkage with SaaS solutions such as the ERP cloud.

3