Oracle 2005 Annual Report Download - page 44

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Table of Contents
Fiscal 2006 Compared to Fiscal 2005: On Demand revenues increased in fiscal 2006 due to the expansion of our subscription base in Oracle On Demand
services, including incremental revenues from Siebel of $9 million, as well as higher revenues from Advanced Customer Services, including incremental
revenues from Siebel of $17 million and PeopleSoft of $9 million. Excluding the effect of currency rate fluctuations, the Americas contributed 65% to the
increase in On Demand revenues, EMEA contributed 30% and Asia Pacific contributed 5%.
On Demand expenses increased due to higher personnel related expenditures in both our Oracle On Demand and Advanced Customer Services businesses as a
result of additional resources acquired from Siebel as well as higher computer and technology related charges and external contractor costs in our Oracle On
Demand business. The total On Demand margin as a percentage of revenues declined due to lower margins associated with the Siebel On Demand offering as
well as additional expenditures incurred to support planned future growth.
Fiscal 2005 Compared to Fiscal 2004: Excluding the effect of currency rate fluctuations, On Demand services revenues increased primarily due to the
expansion of our subscription base in Oracle On Demand services. Excluding the effect of currency rate fluctuations, the Americas contributed 72% to the
increase in On Demand services revenues, EMEA contributed 12% and Asia Pacific contributed 16%.
Excluding the effect of currency rate fluctuations, total On Demand expenses increased 14% primarily due to higher employee related expenditures related to
increased headcount.
Education: Education revenues are earned by providing instructor led, media based and internet based training in the use of our database, middleware and
applications software. Education expenses primarily consist of personnel related expenditures, facilities and external contractor costs.
Year Ended May 31,
Percent Change Percent Change
(Dollars in millions) 2006 Actual Constant 2005 Actual Constant 2004
Education Revenues:
Americas $ 151 34% 32% $ 113 30% 29% $ 87
EMEA 117 8% 13% 108 9% 2% 99
Asia Pacific 54 13% 15% 48 -9% -13% 53
Total revenues 322 20% 21% 269 13% 10% 239
Expenses:
Cost of services(1) 246 10% 11% 224 8% 4% 207
Stock based compensation — * * 1 * * —
Total expenses 246 10% 11% 225 9% 11% 207
Total Margin $ 76 69% 73% $ 44 38% 42% $ 32
Total Margin % 24% 16% 13%
% Revenues by Geography:
Americas 47% 42% 36%
EMEA 36% 40% 42%
Asia Pacific 17% 18% 22%
(1) Excluding stock-based compensation
* not meaningful
Fiscal 2006 Compared to Fiscal 2005: Education revenues increased in fiscal 2006 due to an increase in customer training on the use of our acquired
applications products. Excluding the effect of currency rate fluctuations, the Americas contributed 64%, EMEA contributed 24% and Asia Pacific contributed
12% to the overall increase in education revenues.
41
Source: ORACLE CORP, 10-K, July 21, 2006 Powered by Morningstar® Document Research℠