Oracle Financial Services Software (532466) Q4 02/03 earnings summary

Executive summary

• FY2002-03 revenue advanced amid global slowdown; 404 customers served across 93 countries, with 59 new customer wins and employee strength up 14% to 2,327.

• FLEXCUBE ranked the world’s No. 1 selling banking solution for 2002; the IPO was completed and shares listed in Mumbai.

• Results vary by accounting basis: Indian GAAP consolidated net income was Rs 1,708.88 million; US GAAP consolidated net income was Rs 1,770.67 million.

Financial highlights

• Indian GAAP consolidated FY2002-03 revenue was Rs 6,098.54 million, operating income Rs 1,808.54 million, and net income Rs 1,708.88 million, versus Rs 4,194.77 million, Rs 1,230.16 million, and Rs 1,152.99 million in FY2001-02.

• Indian GAAP consolidated basic EPS was Rs 46.78 and diluted EPS Rs 45.92, versus Rs 34.59 for both measures in FY2001-02.

• US GAAP consolidated revenue grew 46% to Rs 6,357.36 million; net income grew 71% to Rs 1,770.67 million and net margin rose to 28% from 24%.

• US GAAP consolidated operating income increased 64% to Rs 1,868.08 million; reported EPS was Rs 49.87 basic and Rs 48.10 diluted.

• Standalone Indian GAAP revenue rose 36% to Rs 5,638.31 million and net income rose 38% to Rs 1,743.75 million; net margin remained 31%.

Outlook and guidance

• Strategic aim: become the preferred IT partner to global banking and financial services, using product breadth, domain expertise, alliances, global reach and cost-effective delivery.

• Management expected sales and marketing costs to continue rising as market presence expanded; no numerical forward-year earnings guidance was stated.

• European subsidiary management anticipated stronger operating revenue growth, citing product demand and FLEXCUBE wins, while acknowledging recession and competitive pressure.