ORCL Oracle Corporation

Operator (Operator): Hello. And thank you for standing by. My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the Oracle Corporation Q2 FY 2026 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star, then the number one on your telephone keypad. I would now like to turn the call over to Ken Bond, Head of Investor Relations. Sir, please go ahead. Ken Bond (Head of Investor Relations): Thank you, Tiffany. Afternoon, everyone, and welcome to Oracle's second quarter fiscal year 2026 earnings conference call. On the call today are Chairman and Chief Technology Officer, Lawrence Ellison, Chief Executive Officer, Mike Cecilia, Chief Executive Officer Clay McGork, and Principal Financial Officer, Doug Caring. A copy of the press release and financial tables, which includes a GAAP to non-GAAP reconciliation, other supplemental financial information, and a list of many customers who purchased Oracle Cloud Services or went live on Oracle Cloud recently, will be available from our Investor Relations website. As a reminder, today's discussion will include forward-looking statements, and we will discuss some important factors relating to our business. These forward-looking statements are also subject to risks and uncertainties that may cause actual results to differ materially from statements being made today. As a result, we caution you from placing undue reliance on these forward-looking statements, and we encourage you to review our most recent reports, including our 10-K and 10-Q and any applicable amendments. And finally, we are not obligating ourselves to revise our results or these financial-looking statements. Before taking questions, we'll begin with a few prepared remarks, and I'll turn the call over to Mike. Doug Caring (Principal Financial Officer): As it relates to the numbers we are about to present, the following apply to both the results for Q2 and to our guidance for Q3. First, we'll be discussing our financials using constant currency growth rates as this is how we manage the business. Second, we'll be presenting our numbers on a non-GAAP basis, except where we indicate otherwise. Finally, as it relates to currency, it had a 1% positive impact on revenue and a 3¢ positive impact on earnings in Q2. For Q3, assuming currency exchange rates remain the same as they are now, currency should have a 2% to 3% positive effect on revenue and have a 6¢ positive effect on EPS depending on rounding. In terms of the result for Q2, we had another excellent quarter of execution. Remaining Performance Obligations, or RPO, ended the quarter at $523.3 billion, up 433% from last year and up $68 billion since August. Driven by contracts signed with Meta, NVIDIA, and others as we continue to diversify our customer backlog. RPO expected to be recognized in the next twelve months grew 40% year over year, compared with 25% last quarter, and 21% last year. Total cloud revenue, which includes both applications and infrastructure, was up 33% at $8 billion, representing a significant acceleration from the 24% growth rate reported last year. Cloud revenue now accounts for half of Oracle's overall revenue. Cloud infrastructure revenue was $4.1 billion, up 66% with GPU-related revenue growing 177%. Oracle's cloud infrastructure businesses continue to grow much faster than our competitors. Cloud database services revenue was up 30%, with Autonomous Database revenue up 43% and multi-cloud consumption up 817%. Cloud applications revenue was $3.9 billion, up 11%. Our strategic back-office applications revenue was $2.4 billion, up 16%. We finished combining our industry-based cloud apps and our Fusion cloud apps under one selling organization in each region across the world, and have been seeing increasing cross-selling synergies that are expected to drive higher cloud applications growth rates in the future. All in, total revenues for the quarter were $16.1 billion, up 13% and higher than the 9% growth reported in Q2 last year. Continuing our trend of accelerating total revenue growth. Operating income grew 8% to $6.7 billion. Non-GAAP EPS was $2.26, up 51%, while GAAP EPS was $2.10, up 86%. We recognized a pretax gain of $2.7 billion in the quarter, stemming from the sale of our interest in Ampere. Turning to cash flow. Operating cash flow in Q2 was $2.1 billion, while free cash flow was a negative $10 billion and CapEx was $12 billion reflecting the investments being made to support our accelerating growth. As a reminder, the vast majority of our CapEx investments are for revenue-generating equipment that is going into our data centers, and not for land, buildings, or power that collectively are covered via leases. Oracle does not pay for these leases until the completed data centers and accompanying ... [transcript truncated at 5,000 chars — full text available via API]

Operator (Operator): Hello and thank you for standing by. My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the Oracle Corporation Q1 FY2026 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star then the number one on your telephone keypad. I would now like to turn the call over to Ken Bond, Head of Investor Relations. Ken, please go ahead. Ken Bond (Head of Investor Relations): Thank you, Tiffany. Good afternoon, everyone, and welcome to Oracle's first quarter fiscal year 2026 earnings conference call. A copy of the press release and financial tables, which include a GAAP to non-GAAP reconciliation and other supplemental financial information, can be viewed and downloaded from our investor relations website. Additionally, a list of many customers who purchased Oracle Cloud Services or went live on Oracle Cloud recently will be available from the investor relations website. On the call today are Chairman and Chief Technology Officer, Lawrence Ellison, and Chief Executive Officer, Safra Catz. A reminder, today's discussion will include forward-looking statements, including predictions, expectations, estimates, or other information that might be considered forward-looking. Throughout today's discussion, we will present some important factors relating to our business, which may potentially affect these forward-looking statements. These forward-looking statements are also subject to risks and uncertainties that may cause actual results to differ materially from statements being made today. As a result, we caution you against placing undue reliance on these forward-looking statements and we encourage you to review our most recent reports, including our 10-K and 10-Q, and any applicable amendments for a complete discussion of these factors and other risks that may affect our future results or the market price of our stock. And finally, we are not obligating ourselves to revise our results or these forward-looking statements in light of new information or future events. Before taking questions, we'll begin with a few prepared remarks. And with that, I'd like to turn the call over to Safra. Safra Catz (CEO): Thanks, Ken, and good afternoon, everyone. Clearly, we had an amazing start to the year because Oracle has become the go-to place for AI workloads. We have signed significant cloud contracts with the who's who of AI, including OpenAI, xAI, Meta, NVIDIA, AMD, and many others. At the end of Q1, remaining performance obligations or RPO now top $455 billion. This is up 359% from last year and up $317 billion from Q4. Our cloud RPO grew nearly 500% on top of 83% growth last year. Now to the results. Using constant currency growth rates, as you can see, we've made some changes to the face of our income statement to better reflect how we manage the business and so you can understand our cloud business dynamics more directly. So here it goes. Total cloud revenue, that's both apps and infrastructure, was up 27% to $7.2 billion. Cloud infrastructure revenue was $3.3 billion, up 54% on top of the 46% growth reported in Q1 last year. OCI consumption revenue was up 57% and demand continues to dramatically outstrip supply. Cloud database services, which were up 32%, now have annualized revenues of nearly $2.8 billion. Autonomous Database revenue was up 43% on top of the 26% growth reported in Q1 last year. Multi-cloud database revenue, where Oracle regions are embedded in AWS, Azure, and GCP, grew 1529% in Q1. Cloud application revenue was $3.8 billion, up 10%, while our strategic back-office application revenue was $2.4 billion, up 16%. Total software revenue for the quarter was $5.7 billion, down 2%. So all in, total revenues for the quarter were $14.9 billion, up 11% from last year and higher than the 8% growth reported in Q1 last year. We have also been on an accelerated journey to adopt AI internally to run more efficiently. I expect our operating income will grow mid-teens this year and higher still in FY2027. Non-GAAP EPS was $1.47 while GAAP EPS was $1.01. The non-GAAP tax rate for the quarter was 20.5%, which was higher than the 19% guidance and caused EPS to be $0.03 lower. For the last four quarters, operating cash flow was up 13% to $21.5 billion and free cash flow was a negative $5.9 billion with $27.4 billion of CapEx. Operating cash flow for Q1 was $8.1 billion while free cash flow was a negative $362 million with CapEx of $8.5 billion. At quarter end, we had $11 billion in cash and marketable securities and short-term deferred revenue balance was $12 billion, up 5%. Over the last ten years, we've reduced the shares outstanding by a third at an average price of $55, which is, at this point, much less than a quarter of our current stock price. This quarter, we repurchase ... [transcript truncated at 5,000 chars — full text available via API]

Operator (Operator): Hello and welcome to the Oracle Corporation Fourth Quarter and Full Year 2025 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. I would now like to turn the conference over to Ken Bond, Head of Investor Relations. Please go ahead. Ken Bond (Head of Investor Relations): Thank you, Sarah, and good afternoon, everyone, and welcome to Oracle's fourth quarter and fiscal year 2025 earnings conference call. A copy of the press release and financial tables, which includes a GAAP to non-GAAP reconciliation and other supplemental financial information can be viewed and downloaded from our Investor Relations website. Additionally, a list of many customers who purchase Oracle Cloud Services or went live on Oracle Cloud recently will be available from our Investor Relations website. On the call today are Chairman and Chief Technology Officer, Lawrence Ellison and Chief Executive Officer, Safra Catz. As a reminder, today's discussion will include forward-looking statements including predictions, expectations, estimates or other information that might be considered forward-looking. Throughout today's discussion, we will present some important factors relating to our business which may potentially affect these forward-looking statements. These forward-looking statements are also subject to risks and uncertainties that may cause actual results to differ materially from the statements being made today. As a result, we caution you against placing undue reliance on these forward-looking statements, and we encourage you to review our most recent reports, including our 10-Ks and 10-Qs and any applicable amendments for a complete discussion of these factors and other risks that may affect our future results or market price of our stock. And finally, we are not obligating ourselves to revise our results or these forward-looking statements in light of new information or future events. Before taking questions, we will begin with a few prepared remarks. And with that, I'd like to turn the call over to Safra. Safra Catz (CEO): Thanks, Ken, and good afternoon, everyone. As you can see, we had an excellent finish to an amazing year. With Q4 total revenue and EPS both exceeding my guidance. We are reporting our fiscal year-end results just eleven days after the last day of the quarter. Using Oracle Fusion, we continue to announce our quarterly and annual financial results faster than any other company in the S&P 500. Now a few years ago, I told you that we had reached a tipping point in our cloud transition and expected revenue growth to accelerate. And it has. In Q4, we hit double-digit revenue growth and it's only going up from here. Even as the company gets bigger. Our remaining performance obligations now stand at $138 billion, up $8 billion from last quarter and up 41% from last year. And yet, the best is still to come. Our applications business was the area we moved to the cloud more than a decade ago and we are now the leader in enterprise back office with SaaS solutions for ERP, Financials, EPM, HCM, supply chain, and manufacturing. With the addition of over 100 AI agents along with strong bookings and higher renewal rates for our strategic SaaS products, I expect the cloud applications growth rate will accelerate this coming year. Our infrastructure business was the next area to move to the cloud. We made engineering decisions that were much different from the other hyperscalers and that were better suited to the needs of enterprise customers resulting in lower costs to them and giving them deployment flexibility. OCI has seen exceptional demand for infrastructure services and those contracted non-cancelable bookings in RPO give us confidence that OCI revenue will grow over 70% this current year. Included in that is the Oracle Autonomous Database and the AI data platform. Enterprises know that their AI needs demand the most capable database to manage a company's full dataset further with our AI and autonomous features, our customers can bring all their data together, make it available for LLMs, and yet have the best security built in. In addition, our customers have the flexibility to run their Oracle databases in OCI, in private clouds, or in partner clouds with our multi-cloud offering. But what is clear is that more customers will use the Oracle database to leverage AI. So as a result of the strength in our cloud applications and infrastructure including database services, we are raising our revenue guidance for fiscal year 2026 to over $67 billion, up 16% for the year. Now for the results. And as usual, I'll be discussing our financials using constant currency growth rates as it is how we manage the business. Total cloud revenue SaaS plus IaaS was up 27% at $6.7 billion. And total cloud services and license support revenue for the quarter was $11.7 billion, up 14%. IaaS revenue was $3 billion, up ... [transcript truncated at 5,000 chars — full text available via API]

Operator (Operator): Thank you for joining us. I'm Abby, the conference operator. Welcome to the Oracle Corporation Third Quarter Fiscal Year '25 Earnings Conference Call. Please note that all lines are muted to minimize background noise. After the presentations, we will have a question-and-answer session. Now, I will pass the call to Ken Bond, Head of Investor Relations. Ken, you may start. Ken Bond (Head of Investor Relations): Thank you, Abby. Good afternoon, everyone, and welcome to Oracle's third quarter fiscal year 2025 earnings conference call. A copy of the press release and financial tables, which includes a GAAP to non-GAAP reconciliation and other supplemental financial information, can be viewed and downloaded from our investor relations website. Additionally, a list of many customers who purchased Oracle Cloud Services or went live on Oracle Cloud recently will be available from our Investor Relations website. On the call today are Chairman and Chief Technology Officer, Larry Ellison; and Chief Executive Officer Safra Catz. As a reminder, today's discussion will include forward-looking statements, including predictions, expectations, estimates, or other information that might be considered forward looking. Throughout today's discussion, we will present some important factors relating to our business, which may potentially affect these forward-looking statements. These forward-looking statements are also subject to risks and uncertainties that may cause actual results to differ materially from the statements being made today. As a result, we caution you against placing undue reliance on these forward-looking statements, and we encourage you to review our most recent reports, including our 10-K and 10-Q and any applicable amendments for a complete discussion of these risk factors and other risks that may affect our future results or the market price of our stock. And finally, we are not obligating ourselves to revise our results or these forward-looking statements in light of new information or future events. Before taking any questions, we will begin with a few prepared remarks. And with that, I'd like to turn the call over to Safra. Safra Catz (CEO): Thanks, Ken, and good afternoon, everyone. As you can see, this was our strongest booking quarter ever by a huge margin as we added $48 billion to our backlog. Our RPO balance is now $130 billion, up from $97 billion last quarter and up from $80 billion last year. That's a growth of 63% year-over-year, and this does not include any contracts with Project Stargate. The RPO figure is the leading indicator of demand for our cloud services, while our live data center count and power capacity is the leading indicator of the conversion of RPO to revenue. Speaking of data centers, we marked a milestone this quarter as we crossed into triple digits with our 101st cloud region coming online. It's just a matter of time before we have more cloud regions than all of our competitors combined, reflecting the strategic advantage of our Gen 2 architecture, which offers our customers the most flexibility. From a delivery standpoint, the growth of our power capacity under contract is even higher than the growth in the number of data centers, and we expect that our available power capacity will double this calendar year and triple by the end of next fiscal year. As we bring more capacity online, our revenues will clearly accelerate. What we are seeing in the market is that we are the destination of choice for both AI training and inferencing. This is due to the fact that our Gen 2 cloud is faster and therefore, cheaper than our competitors and also due to our ultra high-speed networking engineering that we started decades ago and that is now highly relevant for AI. Taken together we have numerous structural engineering advantages that distinguish OCI from our competitors. And as Larry will discuss in more detail, Beyond that, because of the momentum OCI is enjoying, customers are looking at us for many more workloads. Now shifting to Q3 results. I'll discuss our financials using constant currency growth rate, as this is how we manage the business. Total cloud revenue for SaaS and IaaS increased by 25% to $6.2 billion, with SaaS revenue of $3.6 billion in the quarter, up 10%, and IaaS revenue of $2.7 billion, up 51% on top of the 49% growth reported last year. It's important to note that the exit of our advertising business last year lowered total cloud revenue growth by 2% this quarter. Total cloud services and license support revenue for the quarter was $11 billion, up 12%, driven by OCI, our strategic cloud applications, and cloud database services. Infrastructure subscription revenues, which include license support, reached $6.2 billion, up 18%. Record-level AI demand drove Oracle Cloud Infrastructure revenue up 51% in Q3, and grew by 54% when excluding our legacy hosting, both significantly outpacing our hyperscaler competitors. Our infrastructure cloud service ... [transcript truncated at 5,000 chars — full text available via API]

Ken Bond (Head of Investor Relations): Thank you for your patience, and welcome to the Oracle Corporation Second Quarter Fiscal Year 2025 Earnings Conference Call. I would like to now hand it over to Ken Bond, Head of Investor Relations. Please proceed. Thank you, Rob, and good afternoon, everyone, and welcome to Oracle's second quarter fiscal year 2025 earnings conference call. A copy of the press release and financial tables, which includes a GAAP to non-GAAP reconciliation and other supplemental financial information can be viewed and downloaded from our Investor Relations website. Additionally, a list of many customers who purchased Oracle Cloud Services or went live on Oracle Cloud recently will be available from our Investor Relations website as well. On the call today are Chairman and Chief Technology Officer, Larry Ellison; and Chief Executive Officer, Safra Catz. As a reminder, today's discussion will include forward-looking statements, including predictions, expectations, estimates, or other information that might be considered forward-looking. Throughout today's discussion, we will present some important factors relating to our business, which may potentially affect these forward-looking statements. And these forward-looking statements are also subject to risks and uncertainties that may cause actual results to differ materially from statements being made today. As a result, we caution you from placing undue reliance on these forward-looking statements, and we encourage you to review our most recent reports, including our 10-K and 10-Q and any applicable amendments for a complete discussion of these factors and other risks that may affect our future results or the market price of our stock. And finally, we are not obligating ourselves to revise our results or these forward-looking statements in light of new information or future events. Before taking questions, we'll begin with a few prepared remarks. And with that, I'd like to turn the call over to Safra. Safra Catz (CEO): Thanks, Ken, and good afternoon, everyone. Q2 was another excellent quarter with total revenue at the high end of my constant currency guidance, and EPS was actually $0.01 above the high end. These results are being driven by the fact that our largest revenue component, cloud services and license support, now represents 77% of total revenue and is also our fastest-growing line item, which in turn is driving the acceleration of overall revenue growth. We expect cloud revenue to reach $25 billion this fiscal year. This is happening for several reasons. First, our cloud is faster and less expensive than other clouds. We remain the preferred cloud for AI workloads as well as for non-GPU cloud infrastructure services. In addition, our ability to deploy our cloud in many sizes gives our customers flexibility, and our multi-cloud agreements with Microsoft, Google, and AWS provide customers more choice in how they can migrate their Oracle databases to the cloud. And our strategic SaaS applications continue to grow rapidly. And we are also seeing more of our industry-based cloud applications come online, which immediately contribute to revenue growth. You can see all of this in the momentum in the acceleration of our cloud growth and the 50% growth of our $97 billion RPO number, remaining performance obligation. And today, we're telling you again that revenue growth will accelerate further in the coming quarters. Turning to Q2, and I want to remind you that our quarter ended on Saturday a week ago, and here we are announcing our results, and that's only possible because we use Oracle Fusion. Now as for the numbers, we saw all segments exceeding our internal forecast. Now as the dollar strengthened in the quarter, the 1% currency benefit for total revenue and the $0.02 to $0.03 benefit for EPS that were present in my August guidance retreated with total revenue and EPS in Q2 essentially unaffected by currency movement. As usual, as I go over things today, I'll be discussing our financials using constant currency growth rate as this is how we manage the business. So here it goes. Total cloud revenue, that's SaaS and IaaS, was up 24% at $5.9 billion with SaaS revenue of $3.5 billion, up 10%, and IaaS revenue of $2.4 billion, up 52%, on top of the 50% growth reported last year. As a reminder, we exited the advertising business last quarter, which had the effect of lowering the total cloud revenue growth by 2% this quarter. Total cloud services and license support for the quarter was $10.8 billion, up 12%, driven again by OCI, our strategic cloud application, and autonomous database. Infrastructure subscription revenues, which includes license support were $6 billion, up 17%. Record-level AI demand drove Oracle Cloud Infrastructure revenue up 52%. But excluding legacy hosting infrastructure, cloud services revenue was up 55%. Our infrastructure cloud services now have an annualized revenue of $9.7 billion. OCI consumption revenue was up 58 ... [transcript truncated at 5,000 chars — full text available via API]