- Remaining Performance Obligations (RPO): $98 billion, up $18 billion from Q3 and up 44% year over year from $68 billion last year.
- Total Cloud Revenue (excluding Cerner): $4.7 billion, up 23%.
- Total Cloud Revenue (including Cerner): $5.3 billion, up 20%.
- SaaS Revenue: $3.3 billion, up 10%.
- IaaS Revenue: $2 billion, up 42%.
- Total Cloud Services and License Support: $10.2 billion, up 10%.
- Applications Subscription Revenues: $4.6 billion, up 6%.
- Strategic Back Office SaaS Applications Annualized Revenue: $7.7 billion, up 16%.
- Infrastructure Subscription Revenues: $5.6 billion, up 13%.
- OCI Gen 2 Infrastructure Cloud Services Growth: 44%, with annualized revenue of $7.4 billion.
- OCI Consumption Revenue: Up 63%.
- Database Subscriptions: Up 6%, with cloud database services up 26% and annualized revenue of $2 billion.
- Software License Revenues: Down 14% to $1.8 billion.
- Total Revenues for the Quarter: $14.3 billion, up 4% including Cerner, up 5% excluding Cerner.
- Gross Margin for Cloud Services and License Support: 77%.
- Non-GAAP Operating Income: $6.7 billion, up 9% from last year.
- Operating Margin: 47%, up from 44% last year.
- Non-GAAP EPS: $1.63.
- GAAP EPS: $1.11.
- Total Company Revenue for Fiscal Year: $53 billion, up 6%.
- Total Cloud Services and License Support Revenue for Fiscal Year: $39.4 billion, up 11%.
- Total Application Subscription Revenue: Up 9%.
- Infrastructure Subscription Revenue: Up 13%.
- Total Cloud Services (excluding Cerner): Up 26% to $17.2 billion.
- SaaS Revenue (excluding Cerner): Up 13% to $10.4 billion.
- IaaS and Cloud Infrastructure Revenue: Up 60% to $6.8 billion.
- Non-GAAP EPS for Fiscal Year: $5.56, up 9%.
- Full-Year Operating Margin Percentage: 44%, up from 42% last year.
- Cash and Marketable Securities at Quarter-End: Nearly $10.7 billion.
- Short-Term Deferred Revenue Balance: $9.3 billion, up 4%.
- Operating Cash Flow Over Last Four Quarters: $18.7 billion, up 9%.
- Free Cash Flow Over Last Four Quarters: $11.8 billion, up 39%.
- Capital Expenditures: $6.9 billion.
- Shares Purchased This Quarter: 1.25 million shares for $150 million.
- Dividends Paid Over Last 12 Months: $4.4 billion.
- Declared Dividend: $0.40 per share.
Release Date: June 11, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Oracle Corp (ORCL, Financial) signed the largest sales contracts in its history, driven by high demand for cloud services.
- Remaining Performance Obligations (RPO) increased to $98 billion, up 44% year-over-year.
- Total cloud revenue, excluding Cerner, was $4.7 billion, up 23%; including Cerner, it was $5.3 billion, up 20%.
- Non-GAAP operating income was $6.7 billion, up 9% from last year, with an operating margin of 47%.
- Oracle Corp (ORCL) announced a new multi-cloud partnership with Google, expanding its cloud service offerings.
Negative Points
- Currency headwinds negatively impacted total revenue by 1% and EPS by $0.01.
- Software license revenues were down 14% to $1.8 billion, reflecting a shift towards cloud services.
- Gross margin for cloud services and license support was 77%, affected by the faster growth of cloud compared to support.
- CapEx for fiscal year 2025 is expected to double compared to fiscal year 2024, indicating higher future expenditures.
- The company decided to exit the advertising business, which had declined to about $300 million in revenue for fiscal year 2024.
Q & A Highlights
Q: Safra, can you help us bridge the strong RPO number and how we need to think about feeding that into revenue? Is that just a capacity function?
A: It's all about capacity. As we bring the capacity online, wherever it's going online around the world, those workloads are coming over. Customers have done a lot of the analysis and engineering in advance and are just waiting for us to give them more capacity.
Q: Larry, can you talk about the innovation road map for OCI and your AI services in particular?
A: We are building very small data centers that can be placed in various locations, as well as the largest data centers in the world, including a 200-megawatt data center. Our data centers are designed for high-speed networks, liquid cooling, and full automation, which allows us to scale efficiently and securely.
Q: As you embark on offering multi-cloud flexibility to customers, when can we see a similar partnership with AWS?
A: We believe in giving customers choice and are working towards interconnecting all clouds. We are thrilled with our partnerships with Microsoft and Google and would love to do the same with AWS. We aim to eliminate fees for moving data between clouds and provide seamless integration.
Q: How many deployment models are you offering for OCI, and how does this provide an advantage in sales cycles?
A: We offer a full Oracle Cloud that can be installed in customers' existing data centers, providing maximum security and privacy. Our cloud is highly automated and scalable, from very small to very large deployments, which is a significant advantage over competitors.
Q: Can you expand on the OpenAI announcement and what it entails in terms of your collaboration?
A: We are building a very large data center for OpenAI, equipped with the latest NVIDIA chips and liquid cooling, primarily for training large language models and neural networks. This collaboration extends beyond language to include image processing for applications like medical diagnostics.
Q: What has been the contribution of Oracle database at Azure and AI to IaaS revenue growth this quarter versus what we should expect in fiscal '25?
A: Both Oracle database at Azure and AI workloads are incremental to our current revenues. The database at Azure centers are just going live, and AI contracts signed recently are much larger, indicating significant incremental growth in fiscal '25.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
