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Oracle Reports Net Income Up 111%, Earnings Per Share $0.17. Application Sales Up 42%, Database Sales Up 32%; Oracle Stock to Split 2 for 1

September 14, 2000

Application Sales Up 42%, Database Sales Up 32%; Oracle Stock to Split 2 for 1

Redwood Shores, Calif. 14-SEP-2000 Today, Oracle Corporation announced record results for the first quarter (Q1) of its fiscal year 2001. In addition, Oracle announced a two-for-one stock split of its outstanding common shares.

First quarter net income increased 111% to $501 million, or $0.17 per share, while revenue grew to $2.3 billion. This compares to $237 million in net income, or $0.08 per share and $2.0 billion in revenue, in Q1 last year. First quarter applications software sales increased 42% to $156 million, while database software sales grew 32% to $585 million. Total software license revenue was up 28% to $807 million, while total service revenue increased 8% to $1.5 billion for the quarter.

"We are off to our fastest start in six years," said Oracle CEO, Larry Ellison. "The spectacular growth in our database business demonstrates that we are continuing to take market share from IBM and Microsoft. The world's largest Web sites — from Amazon.com to Yahoo! — rely on the Oracle database to handle huge numbers of users and enormous quantities of information. The Oracle database is the software that powers the Internet."

"Sales of our new applications software — the Oracle e-Business suite — will just get stronger and stronger throughout the year," Ellison continued. "The e-Business suite puts every aspect of a business — marketing, sales, supply chain, manufacturing, customer service, accounting, human resources — everything, on the Internet. Our complete and integrated E-business suite is proving to be a compelling alternative to buying applications from several different vendors, and trying to make them work together."

"A little more than a year ago, Oracle set out to save one billion dollars annually by using our own Internet e-Business applications," said Oracle Chief Financial Officer, Jeff Henley. "A billion dollars in annual savings translates to a 10 point improvement in our margins. We did better than that again this quarter. In Q1 our operating margin improved over last year's Q1 by 11.7 points — from 17.4% to 29.1%. And now that we are in the second year of our e-Business transformation, we are seeing the sales and marketing productivity gains that should accelerate revenue growth throughout fiscal 2001. It should be a great year."

This marks the tenth time that Oracle's common stock has been split since the company's initial public offering in March 1986. The two-for-one stock split will entitle each stockholder of record at the close of business on September 25, 2000 (the record date) to receive one additional share for every share of Oracle common stock held on that date. Shares resulting from the split will be distributed by the transfer agent on October 12, 2000 (the effective date). Oracle's stock will reflect the post-split price at the opening of the trading session on October 13, 2000. Oracle currently has approximately 2,802,029,000 shares of common stock outstanding.

Oracle Corporation is the world's second largest software company. With annual sales of more than $10 billion, Oracle provides the software that powers the Internet. For more information about Oracle, please call Investor Relations at (650) 506-4073 or visit Oracle on the web at http://www.oracle.com.

"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995: Information in this release relating to Oracle's future prospects which are "forward-looking statements" are subject to certain risks and uncertainties that could cause actual results to differ materially, including, but not necessarily limited to, the following: (1) Management's ability to manage growth, continuously hire and retain significant numbers of qualified employees, forecast revenues and control expenses, especially on a quarterly basis, continues to be a challenge. An unexpected decline in the growth rate of revenues without a corresponding and timely slowdown in expense growth could have a material adverse effect on results of operations. (2) The market for Oracle's products is intensely competitive and is characterized by rapid technological advances and frequent new product introductions. There can be no assurances that Oracle will continue to introduce new products and new versions of existing products that keep pace with technological developments, satisfy increasingly sophisticated customer requirements and achieve market acceptance. (3) Oracle has recently made changes to its pricing model which could lead to a decline or delay in sales as its sales force and customers adjust to the new pricing policies. Intense competition in the various markets in which Oracle competes may also put pressure on Oracle to reduce prices on certain products. (4) Delays in product delivery or closing of sales can cause quarterly revenues and income to fall significantly short of anticipated levels. (5) Oracle is introducing new products, such as internet procurement and supply chain management software, customer relationship management applications and application hosting services, as well as assisting its customers in forming exchanges for a number of business procurement needs; the market acceptance and contribution to Oracle's revenues of these products and exchanges cannot be assured. Oracle undertakes no obligation to update information contained in this release. For further information regarding risks and uncertainties associated with Oracle's business, please refer to the "Risk Factors" section of Oracle Corporation's SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting Oracle Corporation's Investor Relations Department at (650) 506-4073 or Oracle's Investor Relations website at http://www.oracle.com.

                              ORACLE CORPORATION


                    CONSOLIDATED STATEMENTS OF OPERATIONS
                   ($ in thousands, except per share data)
                                 (unaudited)

                                                    1st Quarter Ended
                                                         August 31,
                                                 -----------------------
                                                    2000         1999

                                                    ----         ----

    REVENUES
      Licenses and other                          $807,238      $632,181
      Services                                   1,454,637     1,352,336
                                                ----------    ----------
        Total Revenues                           2,261,875     1,984,517
                                                ----------    ----------


    OPERATING EXPENSES
      Sales and marketing                          572,964       538,426
      Cost of services                             673,878       756,750
      Research and development                     251,027       235,941
      General and administrative                   105,965       107,537
                                                ----------    ----------

        Total Operating Expenses                 1,603,834     1,638,654
                                                ----------    ----------


    OPERATING INCOME                               658,041       345,863

      Net investment gains/(losses) related
       to marketable securities (A)                 15,433        (3,340)
      Other income (expense), net                  102,769        21,687
                                                ----------    ----------
    INCOME BEFORE TAXES                            776,243       364,210

      Provision for income taxes                   275,566       127,474
                                                ----------    ----------
    NET INCOME                                    $500,677      $236,736

                                               ===========    ==========
    EARNINGS PER SHARE (B)
      Basic                                          $0.18         $0.08
      Diluted                                        $0.17         $0.08

    SHARES OUTSTANDING
      Basic                                      2,802,029     2,860,920
      Diluted                                    2,966,435     2,982,402

    -----------------------
    (A)  Net investment gains related to marketable securities relate to
         results from sales of marketable securities, and the Company's equity

         share in the results of non-consolidated subsidiaries.

    (B)  All earnings per share and shares outstanding amounts have been
         adjusted to reflect a 2:1 stock split during the quarter ended
         February 2000.


                              ORACLE CORPORATION

                    CONDENSED CONSOLIDATED BALANCE SHEETS
                               ($ in thousands)

                                                   August 31,    May 31,

                                                      2000        2000
                                                      ----        ----
                                                   (unaudited)
    ASSETS

    Current Assets
      Cash and short term investments              $5,062,572   $7,761,998
      Trade receivables, net                        1,696,320    2,533,964
      Prepaid and refundable income taxes             213,780      212,829
      Other current assets                            285,923      374,543
                                                   ----------   ----------
        Total Current Assets                        7,258,595   10,883,334
                                                   ----------   ----------
    Long-term cash investments                         70,000      110,000

    Property and equipment, net                       936,757      934,455
    Computer software development costs, net           88,696       94,609
    Other assets                                    1,158,479    1,054,381
                                                   ----------   ----------

    TOTAL ASSETS                                   $9,512,527  $13,076,779
                                                  ===========   ==========

    LIABILITIES AND STOCKHOLDERS' EQUITY

    Current Liabilities
      Notes payable, including current maturities      $3,660       $2,691
      Accounts payable                                253,243      287,495
      Income taxes                                    517,123    2,821,776
      Customer advances and unearned revenues       1,269,585    1,133,482

      Other current liabilities                     1,263,498    1,616,794
                                                   ----------   ----------

        Total Current Liabilities                   3,307,109    5,862,238
                                                   ----------   ----------

    Long-term debt                                    300,731      300,770

    Long-term liabilities                             178,128      186,178

    Deferred income taxes                             355,661      266,130

    Stockholders' equity                            5,370,898    6,461,463
                                                   ----------   ----------

    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY     $9,512,527  $13,076,779

                                                  ===========   ==========

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