This flash report is unaudited and the translation of the Japanese language version.
Flash Report for the 3rd Quarter of Fiscal Year Ending May 31, 2021
[under Japanese GAAP] (Non-consolidated) March 19, 2021
Company Name Ticker: 4716
Oracle Corporation Japan
Listed Stock Exchange: TSE 1st SectionURL:http://www.oracle.com/jp/corporate/investor-relations/index.htmlRepresentative & Contact personal
Telephone: 03-6834-6666
Representative personal Contact personalHiroko Utsumi, Representative Corporate Executive Officer & Managing Counsel Yuki Nishio, Director, Investor Relations
Quarterly Report Filing Date (as planned): April 12, 2021 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, 2020 to February 28, 2021)
(1) Operating result
(% of change from previous year)
Revenue | Operating Income | Ordinary Income | Net Income | |||||
Million Yen | % | Million Yen | % | Million Yen | % | Million Yen | % | |
3rd Quarter, May 2021 | 149,698 | 0.5 | 49,720 | 7.3 | 49,703 | 7.2 | 34,424 | 7.3 |
3rd Quarter, May 2020 | 148,887 | 6.5 | 46,343 | 9.2 | 46,353 | 9.2 | 32,069 | 9.1 |
Net income per share (diluted) | ||||
Net income per share | ||||
Yen | Sen | Yen | Sen | |
3rd Quarter, May 2021 | 268 | 72 | 268 | 53 |
3rd Quarter, May 2020 | 250 | 56 | 250 | 33 |
(2) Financial Position
Total Assets
Net AssetsRatio of shareholders' equity
3rd Quarter, May 2021 FY ended May 2020 Shareholders' equity
Million Yen294,766
Million Yen205,182
294,139
191,362
%69.665.0
3rd Quarter, May 2021: 205,062 Million Yen (FY2020: 191,206 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 2020 | - | 0 | 00 | - | 149 | 00 | 149 | 00 | |
FY ending May 2021 | - | 0 | 00 | - | |||||
FY ending May 2021(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 2021 term (from June 1, 2020 to May 31, 2021)
(% of change from previous year)
RevenueNet income per share
%
Entire term
0.0~3.0
Yen370.00~385.00
(Note1) Revision of forecast for May 2021 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 3.
(Note3) Estimation of effective tax rate is 30.8%
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
(i) Changes in accounting policies due to revision of accounting standards : None
(ii) Changes in accounting policies due to reasons other than (i): None
(iii) Changes in accounting estimates : None
(iv) Restatements : None
(3) The number of shares outstanding (common stock)
(i) The number of shares outstanding | 3rd Quarter, May 2021 | 128,234,471 | shares |
(inclusive of treasury stock) | FY ended May 2020 | 128,184,271 | shares |
(ii) The number of treasury stock | 3rd Quarter, May 2021 | 202,856 | shares |
FY ended May 2020 | 116,303 | shares | |
(iii) The number of average shares outstanding (cumulative, non-consolidated, at end of third quarter) | 3rd Quarter, May 2021 | 128,105,619 | shares |
3rd Quarter, May 2020 | 127,992,953 | 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 for Forecasts, on page 3.
[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-------------------------------------------------------------3
(3) Qualitative Information on Forecasts------------------------------------------------------------------------- 3
2. Quarterly Financial Statements and Main Notes ----------------------------------------------------------------
(1) Quarterly Balance Sheet---------------------------------------------------------------------------------------4 4
(2) Quarterly Statement of Income-------------------------------------------------------------------------------- 5
(3) Notes to Quarterly Financial Statements--------------------------------------------------------------------- 6
Notes to Going Concern---------------------------------------------------------------------------------------- | 6 |
Notes to significant changes in the stockholders' equity-------------------------------------------------- | 6 |
Adoption of specified accounting methods for the preparation of quarterly non-consolidated | |
6 | |
Financial statements ------------------------------------------------------------------------------------------- | |
Segment Information------------------------------------------------------------------------------------------- | 6 |
Additional Information----------------------------------------------------------------------------------------- | 6 |
1 |
1. Qualitative Information on Results in the Quarter under Review
(1) Qualitative Information on Business Outcomes
Overview
During the third quarter under review (from June 1, 2020 to February 28, 2021, hereinafter "this quarter"), the Japanese information services industry in which the Company operates were stable in system renewal demand and solid Cloud and IT investment aimed at corporate growth and boosting competitiveness, including investing in mobile solutions, improving efficiency through the use of IoT and other digital data, soaring data volume because of remote working, and strengthening contact points with end users. On the other hand, in some industries which were affected by business performance negatively under COVID19 situation, we still see some slow-down regarding IT spending. 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 the end of last fiscal year, 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 149,698 million yen (up 0.5 % year on year) in revenue, 49,720 million yen (rising 7.3 %) in operating income, 49,703 million yen (gaining 7.2 %) in ordinary income and 34,424 million yen (increasing 7.3 %) 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. All four indicators attained hit record highs as this quarter (9 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 set a slogan "Customer Centric", in order to accelerate our focus points "Win ERP Cloud", "Focus on Big Deals" and "Growth Cloud Consumption". Furthermore the Company also aim to provide the value of "OCI (Oracle Cloud Infrastructure)" which is able to perform extremely at dramatically increased data volume and the most demanding workloads under robust security network. Hereby the Company is expanding to provide its Cloud services, which maximize the value of information by data-driven approaching and supporting services for customers to use Cloud.
In the role of promoting strategy, the Company opened a new datacenter in Osaka region in February 2020, added on the datacenter in Tokyo region opened in May 2019 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 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 3rd Quarter of the fiscal year (from December 1, 2020 to February 28, 2021)
3rd Quarter | December 1, 2020 | February 28, 2021 |
Regarding 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, given the state of emergency announce by the Government in Japan, we had to overcome the challenge as we conducted our business in the 3rd quarter. 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, including "Oracle Cloud Infrastructure (OCI)", there is a lot of demands from customers putting a weight on performance, security and cost effectiveness, furthermore one of the most important strategy "ERP upgrade" (from On-premise to Cloud services) has been deployed to mainly its enterprise Customers. That has led to the usage of our Tokyo region data center opened in May this year is successfully increasing continuously across all of segment significantly with expansion its Gen-2 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.
In Hardware Systems segment, the Company released "Oracle Exadata Database Machine X8M" combines Intel® Optane™ DC persistent memory, and the inquiry for this machine is strong. Exadata X8M 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.
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.
Revenue breakdown by business segments (Year to Date)
Item | FY2020 | FY2021 | May 2020 | ||||
3rd Quarter | 3rd Quarter | ||||||
Amount | Comp. | Amount | Comp. | YoY | Amount | Comp. | |
Million Yen | % | Million Yen | % | % | Million Yen | % | |
Cloud license & on-premise license | 32,552 | 21.9 | 29,999 | 20.0 | -7.8 | 54,972 | 26.0 |
Cloud services & license support | 87,701 | 58.9 | 91,680 | 61.2 | 4.5 | 117,601 | 55.6 |
Cloud & License | 120,253 | 80.8 | 121,680 | 81.3 | 1.2 | 172,573 | 81.7 |
Hardware systems | 12,582 | 8.5 | 12,143 | 8.1 | -3.5 | 17,362 | 8.2 |
Services | 16,051 | 10.8 | 15,874 | 10.6 | -1.1 | 21,420 | 10.1 |
Total | 148,887 | 100.0 | 149,698 | 100.0 | 0.5 | 211,357 | 100.0 |
*Amount is rounded down. Composition ratio and year-to-year comparison (% of change YoY) are rounded off.
(2) Qualitative Information on Financial Situation
Current assets at the end of the third quarter of the current fiscal year were 41,982 million yen (decreasing 207,849 million yen from the previous fiscal year end). This was mainly due to a decrease in short-term loans receivable from subsidiaries and associates (160,000 million yen) resulting from the collection of loans receivable from Oracle Japan Holding Inc. (the parent company of the Company) started from February 2019.
Noncurrent assets of the Company at the end of the term stood at 252,784 million yen (increasing 208,477 million yen from the previous fiscal year end). This was mainly due to an increase in long-term loans receivable from subsidiaries and associates (210,000 million yen) as a result of a new loan to Oracle Japan Holding Inc. (the parent company of the Company) with a maximum loan period of five years started from February 2021.
Liabilities were 89,584 million yen (decreasing 13,192 million yen from the previous fiscal year end). Net assets totaled 205,182 million yen (increasing 13,819 million yen from the previous fiscal year end). As a result, the ratio of shareholders' equity was 69.6 % (up 4.6 percentage points from the previous fiscal year end).
(3) Qualitative Information on Forecasts
There is no change to the forecast announced on June 25, 2020.
2. Quarterly Financial Statements and Main Notes
(1) Quarterly Balance Sheet
(Unit : Million yen) | ||
Description | Previous term end (as of May 31, 2020) | Current term end (as of February 28, 2021) |
Assets | ||
Current assets | ||
Cash and deposits | 60,091 | 25,090 |
Accounts receivable-trade Short-term loans receivable from subsidiaries and associates | 26,539 | 13,713 |
160,000 | - | |
Other | 3,214 | 3,239 |
Allowance for doubtful accounts | -13 | -59 |
Total current assets | 249,832 | 41,982 |
Noncurrent assets | ||
Property, plant and equipment | ||
Buildings, net | 10,367 | 9,710 |
Land | 26,057 | 26,057 |
Other, net | 2,471 | 1,568 |
Total property, plant and equipment | 38,895 | 37,335 |
Intangible assets | 1 | 0 |
Investments and other assets Long-term loans receivable from subsidiaries and associates | ||
- | 210,000 | |
Other | 5,409 | 5,447 |
Allowance for doubtful accounts | -0 | - |
Total investments and other assets | 5,409 | 215,447 |
Total noncurrent assets | 44,306 | 252,784 |
Total assets | 294,139 | 294,766 |
Liabilities | ||
Current liabilities | ||
Accounts payable-trade | 10,501 | 12,075 |
Accounts payable-other | 4,242 | 2,531 |
Income taxes payable | 11,875 | 6,566 |
Advances received | 67,730 | 62,531 |
Provision for bonuses | 2,341 | 1,525 |
Other Provision | 425 | 525 |
Other | 5,651 | 3,828 |
Total current liabilities | 102,768 | 89,583 |
Noncurrent liabilities | ||
Other | 7 | 0 |
Total noncurrent liabilities | 7 | 0 |
Total liabilities | 102,776 | 89,584 |
Net assets | ||
Shareholders' equity | ||
Capital stock | 24,884 | 25,018 |
Capital surplus | 8,235 | 8,369 |
Retained earnings | 158,846 | 174,173 |
Treasury stock | -759 | -2,499 |
Total shareholders' equity | 191,206 | 205,062 |
Subscription rights to shares | 156 | 120 |
Total net assets | 191,362 | 205,182 |
Total liabilities and net assets | 294,139 | 294,766 |
(2) Quarterly Statement of Income
Cumulative Third Quarter
(Unit : Million yen) | ||
Description | Previous term (From June 1, 2019 to February 29, 2020) | Current term (From June 1, 2020 to February 28, 2021 ) |
Net sales | 148,887 | 149,698 |
Cost of sales | 77,428 | 76,906 |
Gross Profit | 71,458 | 72,791 |
Selling, general and administrative expenses | 25,115 | 23,071 |
Operating income | 46,343 | 49,720 |
Non-operating income | ||
Interest income | 21 | 27 |
Others | 30 | 14 |
Total Non-Operating Income | 52 | 41 |
Non-Operating expenses | ||
Foreign exchange losses | 39 | 53 |
Others | 2 | 5 |
Total Non-Operating expenses | 42 | 58 |
Ordinary Income | 46,353 | 49,703 |
Extraordinary Income | ||
Gain on reversal of subscription rights to shares | 12 | 11 |
Total Extraordinary Income | 12 | 11 |
Income before income taxes | 46,365 | 49,714 |
Income taxes | 14,296 | 15,289 |
Net Income | 32,069 | 34,424 |
(3) Notes to Quarterly Financial Statements
(Notes to Going Concern): Not Applicable
(Notes to significant changes in the stockholders' equity): Not Applicable
(Adoption of specified accounting methods for the preparation of quarterly non-consolidated
Financial statements)
The Company has adopted a method in which tax expenses are calculated by multiplying quarterly net income before tax by effective tax rates estimated in a reasonable way, after applying tax effect accounting to net income before tax for the fiscal year under review. Income taxes-deferred is stated including corporate tax.
(Segment Information)
Ⅰ . Previous quarter under review (from June 1, 2019 to February 29, 2020)
Segment sales and operating income (loss)
(Unit: Million Yen) | ||||||
Reportable operating segments | Amount on Statement of Income (Note) 2 | |||||
Cloud and license | Hardware Systems | Adjustment | ||||
Services | Total | (Note) 1 | ||||
Sales | ||||||
External customers | 120,253 | 12,582 | 16,051 | 148,887 | - | 148,887 |
Intersegment net sales or transfer | - | - | - | - | - | - |
Total | 120,253 | 12,582 | 16,051 | 148,887 | - | 148,887 |
Operating income (loss) | 46,522 | 629 | 2,622 | 49,775 | -3,431 | 46,343 |
(Unit: Million Yen)
(Notes): 1. Segment profit adjustment of minus 3,431 million yen is a Company-wide expense, which primarily relates to administration departments that do not belong to any reported segment.
2. Segment profits are adjusted in comparison with operating income in the statement of income.
Ⅱ. Current quarter under review (from June 1, 2020 to February 28, 2021)
Segment sales and operating income (loss)
(Unit: Million Yen) | ||||||
Reportable operating segments | Amount on Statement of Income (Note) 2 | |||||
Cloud and license | Hardware Systems | Adjustment | ||||
Services | Total | (Note) 1 | ||||
Sales | ||||||
External customers | 121,680 | 12,143 | 15,874 | 149,698 | - | 149,698 |
Intersegment net sales or transfer | - | - | - | - | - | - |
Total | 121,680 | 12,143 | 15,874 | 149,698 | - | 149,698 |
Operating income (loss) | 49,148 | 485 | 3,312 | 52,945 | -3,225 | 49,720 |
(Unit: Million Yen)
(Notes): 1. Segment profit adjustment of minus 3,225 million yen is a Company-wide expense, which primarily relates to administration departments that do not belong to any reported segment.
2. Segment profits are adjusted in comparison with operating income in the statement of income.
(Additional Information)
The Company makes accounting estimates (evaluation of recoverability of deferred tax assets, consideration of impairment accounting for fixed assets, etc.) based on the assumption that the business impact by COVD-19 infection will continue to a certain extent within 2020. However, in the second quarter of the current fiscal year, given that the timing of convergence is still uncertain, so we have changed our assumption that the impact on our business will continue to a certain extent throughout the current fiscal year.
Based on the assumption, the Company makes accounting estimates (evaluation of recoverability of deferred tax assets, consideration of impairment accounting for fixed assets, etc.), and the impact of this change on our business performance and financial position is immaterial at this time.
Attachments
- Original document
- Permalink
Disclaimer
Oracle Corporation Japan published this content on 19 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 March 2021 06:01:10 UTC.