Oracle Japan : Flash Report for the Fiscal Year Ended May 31, 2022

Oracle Corporation Japan (4716) Flash Report for the Fiscal Year Ended May 31, 2022 (Non-consolidated)

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

Flash Report for the Fiscal Year Ended May 31, 2022

[under Japanese GAAP] (Non-consolidated)

June 24, 2022

Company Name

Oracle Corporation Japan

Listed Stock Exchange: TSE Standard

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

Schedule for general shareholders meeting: August 23, 2022

Schedule for dividends payment: August 8, 2022

Schedule for annual security report: August 23, 2022

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 May 31, 2022)

(1) Operating result

(% of change from previous year)

Revenue

Operating Income

Ordinary Income

Net Income

Million Yen

％

Million Yen

％

Million Yen

％

Million Yen

％

May 2022

214,691

3.0

73,213

3.3

73,543

3.7

51,182

4.1

May 2021

208,523

-1.3

70,904

3.0

70,904

3.0

49,175

3.1

Net income per share

Net income per share

ROE

ROA

Operating Income

(diluted)

Margin

Yen

Sen

Yen

Sen

％

％

％

May 2022

399

55

399

42

29.7

25.8

34.1

May 2021

383

92

383

66

23.9

22.6

34.0

(2) Financial Position

Total Assets

Net Assets

Ratio of shareholders'

Net assets per share

equity

Million Yen

Million Yen

%

Yen

Sen

May 2022

236,868

125,355

52.9

977

41

May 2021

333,999

219,999

65.8

1,717

30

Shareholders' equity

May 2022: 125,243 Million Yen

(May 2021: 219,881 Million Yen)

(3) Cash Flows

Cash flows from

Cash flows from

Cash flows from

Cash and cash equivalents

operating activities

investing activities

financing activities

at the end of period

Million Yen

Million Yen

Million Yen

Million Yen

May 2022

53,091

99,835

-146,832

60,142

May 2021

65,148

-50,118

-21,115

53,964

2. Dividends

Dividend per share

Dividend

1st Quarter

2nd Quarter

3rd Quarter

Fiscal Year

Total

Total amount

Dividends

Ratio to

end

end

end

End

of dividends

payout ratio

shareholders'

equity

Yen

Sen

Yen

Sen

Yen Sen

Yen

Sen

Yen

Sen

Million Yen

%

%

May 2021

-

0

00

-

1,146

00

1,146

00

146,949

298.5

71.4

May 2022

-

0

00

-

160

00

160

00

20,518

40.0

11.9

May 2023 (Forecast)

-

-

-

-

-

-

(Note1)

Changing Dividend Forecast for the year ended May 31, 2022: Yes

(Note2)

Year-end dividend for the year ending May 31, 2023 has yet to be determined.

Oracle Corporation Japan (4716) Flash Report for the Fiscal Year Ended May 31, 2022 (Non-consolidated)

3. Forecast for the May 2023 term (from June 1, 2022 to May 31, 2023)

			(% of change from previous year)
		Revenue	Net income per share
		%	Yen
Entire term	1.0~4.0	400.00~410.00
(Note1)	Company uses ranges of values for the forecast. Please refer to Future Outlook, on page 5.
(Note2)	Estimation of effective tax rate is 30.8%

4. Other information

1. 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)

May 2022	128,256,471	shares
May 2021	128,240,971	shares
May 2022	118,544	shares
May 2021	201,781	shares
May 2022	128,100,762	shares
May 2021	128,087,828	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:

This flash report is not subject to audit.

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 Future prospects, on page 5.

Oracle Corporation Japan (4716) Flash Report for the Fiscal Year Ended May 31, 2022 (Non-consolidated)
[Table of Contents of Attached Material]
1. Overview of the Management Operations' Results, etc.--------------------------------------------------------	2
(1)	Overview of the Management Operations' Results in the Current Financial Year ---------------------	2
(2)	Overview of the Financial Position in the Current Financial Year ---------------------------------------	4
(3)	Overview of the Cash flows in the Current Financial Year------------------------------------------------	4
(4)	Future Outlook---------------------------------------------------------------------------------------------------	5
2. Basic Policies Concerning Selection of Accounting Standards ------------------------------------------------	6
3. Financial Statements-------------------------------------------------------------------------------------------------	7
(1)	Balance Sheet----------------------------------------------------------------------------------------------------	7
(2)	Statement of Income--------------------------------------------------------------------------------------------	9
(3)	Statement of changes in shareholders' equity---------------------------------------------------------------	10
(4)	Statement of Cash flows---------------------------------------------------------------------------------------	12
(5)	Notes to Financial Statements--------------------------------------------------------------------------------	13
	(Notes to Going Concern) -------------------------------------------------------------------------------------	13
	(Changes in Accounting Policies) ------------------------------------------------------------------------------	13
	(Additional Information) --------------------------------------------------------------------------------------	13
	(Segment Information) -----------------------------------------------------------------------------------------	14
	(Per Share Data) ------------------------------------------------------------------------------------------------	15
	(Notes to subsequent events) ---------------------------------------------------------------------------------	15

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Oracle Corporation Japan (4716) Flash Report for the Fiscal Year Ended May 31, 2022 (Non-consolidated)

1. Overview of the Management Operations' Results, etc.

1. Overview of the Management Operations' Results in the Current Financial Year
   Overview
   During the fiscal year under review (from June 1, 2021 to May 31, 2022, hereinafter "this year"),, 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. The Company re-opened its offices in phases which could realize a higher level of autonomy and hybrid working style.

As a result of these measures, the Company posted 214,691 million yen (up 3.0 % year on year) in revenue, 73,213 million yen (rising 3.3 %) in operating income, 73,543 million yen (gaining 3.7 %) in ordinary income and 51,182 million yen (increasing 4.1 %) 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 highs as this year (the fiscal year 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. 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

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Oracle Corporation Japan (4716) Flash Report for the Fiscal Year Ended May 31, 2022 (Non-consolidated)

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 4th Quarter of the fiscal year (from March 1, 2022 to May 31, 2022)[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, the market is showing a recovery trend in IT investment which is not only for cost reduction but developing and growing their business. Due to hardware supply chain issues (shipment delays) caused by global semiconductor shortages, there were some cases that license projects were moving back with hardware delivery delays.

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 keep on expansion our Cloud partnership, while 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.

We have been authorized ISMAP (Information system Security Management and Assessment Program) for Government Cloud supplier with OCI, PaaS and Oracle Exadata Cloud@Customer, and prospective benefits amid a push for government digitalization include an acceleration and increase in investment, larger projects, and further stimulation of demand over the mid-long term.

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.

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

[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.

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