Oracle Financial Services Software (532466) Q4 06/07 earnings summary

Executive summary

• FY2006-07 consolidated Indian GAAP revenue rose 39% to Rs 20,609.4m; net income before prior-period items increased 50% to Rs 3,722.8m.

• Expansion combined strong product and services growth with investment in Mantas, new facilities and headcount; Oracle’s ownership reached 81.02% by March 31, 2007.

Financial highlights

• Consolidated Indian GAAP revenue was Rs 20,609.4m, up 39% YoY; income before tax rose 36% to Rs 4,131.1m and net income before prior-period items rose 50% to Rs 3,722.8m.

• Consolidated Indian GAAP EPS was Rs 47.05 basic and Rs 45.76 diluted, versus Rs 31.45 and Rs 30.62, respectively, in FY2005-06.

• US GAAP revenue increased 37% to Rs 20,381.1m; operating income rose 15% to Rs 2,752.8m and net income rose 26% to Rs 2,768.1m.

• US GAAP results included Rs 115.6m of share-based compensation expense and Rs 272.5m of intangible amortization; acquisitions added Rs 1,324m revenue but reduced net income by ~Rs 502m.

Outlook and guidance

• Expected demand was supported by core banking replacement, multi-country standardization, risk and compliance spending, Islamic banking, private wealth management and IT outsourcing.

• Priorities included expanding the portfolio in developed markets, building insurance capabilities and leveraging Oracle’s global sales network and the Oracle-IBM alliance.

• Future financing needs were expected to center on capital expenditure and working capital; operating cash generation was considered sufficient for foreseeable requirements.