Oracle Corporation FY2024 Net Income $10.467B Up 23.2%

Executive Summary

Oracle Corporation reported strong fiscal 2024 results with a net income of $10.467 billion, representing a 23.2% increase compared to the prior year’s $8.503 billion. Revenue grew by 5.9% to $52.961 billion from $49.954 billion, driven by growth in cloud services and license support. The company maintained robust margins and improved liquidity, reflecting its solid market position and operational efficiency.

Management Discussion and Analysis

Key Metrics

Income Statement Analysis

Revenue increased by 5.9%, primarily due to higher cloud services and license support revenues, which grew by 11.4% to $39.383 billion from $35.307 billion. Cost of revenues remained stable, resulting in a gross margin of 53.8%. Operating expenses rose modestly, leading to an operating income of $15.353 billion, up 17.4%. Net income saw a significant rise of 23.2%, reaching $10.467 billion, with earnings per share (diluted) at $3.71, up from $3.07.

Balance Sheet Analysis

Cash and cash equivalents increased by 7.0% to $10.454 billion, while total assets grew by 4.9% to $140.977 billion. Accounts receivable increased by 14.0%, reflecting higher sales activity. Total liabilities rose slightly to $131.737 billion, with current liabilities at $31.544 billion. Stockholders’ equity improved to $9.239 billion, driven by retained earnings and share repurchases. Liquidity remains strong, supporting strategic investments and shareholder returns.

Cash Flow Analysis

Operating cash flow increased by 8.7%, supported by higher net income and efficient working capital management. Investing activities used $7.36 billion, primarily for capital expenditures and acquisitions. Financing activities included debt repayment of $3.5 billion and share repurchases totaling $1.2 billion. Dividends increased to $1.60 per share, totaling $4.391 billion, reflecting ongoing shareholder commitment. Overall, cash flow dynamics indicate healthy cash generation capacity and prudent capital management.

Ratios & DuPont Analysis

Net profit margin improved to 19.8% from 17.0%. Return on assets (ROA) increased to 7.4%, and return on equity (ROE) rose to 113.4%, driven by higher net income and efficient asset utilization. Asset turnover remained stable at approximately 0.38, indicating effective asset management. The equity multiplier was 15.3, reflecting leveraged financing but within manageable levels.

Risk Factors

Potential risks include regulatory challenges, market competition, rapid technological changes, cybersecurity threats, and macroeconomic uncertainties such as inflation and geopolitical tensions. The company’s exposure to foreign currency fluctuations and global supply chain disruptions also pose operational risks. Continued investments in innovation and compliance are critical to mitigate these threats.

Notes & Additional Commentary

Unusual items include a $4.7 billion litigation-related charge in fiscal 2022, which has been substantially resolved. There were no significant one-time gains or losses in fiscal 2024. The company’s strategic focus on cloud growth and share repurchases are expected to sustain long-term shareholder value. Management remains optimistic about future revenue streams, supported by expanding cloud adoption and enterprise digital transformation trends.

Investment Implications

Oracle’s fiscal 2024 results demonstrate a resilient business model with strong cash flow generation and margins. The growth in cloud services positions the company well for future revenue expansion. Risks include competitive pressures and macroeconomic headwinds. Investors should consider Oracle as a stable, cash-rich enterprise with growth prospects in cloud computing, suitable for long-term investment but mindful of industry dynamics and market valuation.