Oracle(US:ORCL)2025-12-10 23:02Financial Data and Key Metrics Changes - Remaining performance obligations (RPO) reached $523.3 billion, up 433% year over year, with a $68 billion increase since August [5] - Total cloud revenue was $8 billion, up 33%, with cloud infrastructure revenue at $4.1 billion, up 66% [6] - Total revenues for the quarter were $16.1 billion, up 13%, and operating income grew 8% to $6.7 billion [7] - Non-GAAP EPS was $2.26, up 51%, while GAAP EPS was $2.10, up 86% [7] - Operating cash flow was $2.1 billion, while free cash flow was negative $10 billion due to $12 billion in CapEx [8] Business Line Data and Key Metrics Changes - Cloud applications revenue was $3.9 billion, up 11%, with strategic back office applications revenue at $2.4 billion, up 16% [7] - Cloud database services revenue increased by 30%, with autonomous database revenue up 43% and multi-cloud consumption up 817% [6][15] - Fusion ERP grew by 17%, Fusion SCM by 18%, and Fusion HCM by 14% [23] Market Data and Key Metrics Changes - Cloud infrastructure business grew at an accelerating 66% year over year, driven by strong demand for AI infrastructure [12] - Multi-cloud database consumption increased by 817% year over year, with 11 multi-cloud regions launched [15][16] Company Strategy and Development Direction - The company is focused on maintaining profitability while expanding its cloud services, with a commitment to an investment-grade debt rating [9][10] - The integration of AI capabilities into its database and applications is a key strategy, with the Oracle AI Data Platform enabling multi-step reasoning on private data [20][21] - The company aims to leverage its unique combination of infrastructure and applications to differentiate itself from competitors [12][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational and financial strength to execute successfully, with significant demand for cloud services [10] - The company expects total cloud revenue growth of 37%-41% in constant currency for Q3, with total revenues expected to grow from 16% to 18% [11] Other Important Information - The company recognized a pre-tax gain of $2.7 billion from the sale of its interest in Ampere [7] - The company is expanding its customer base and partnerships, with significant growth in marketplace consumption [15] Q&A Session Summary Question: Funding for AI Growth Plans - The company has various options for funding its AI growth, including customer chip contributions and leasing arrangements, expecting to need less than $100 billion for buildouts [36][39] Question: OCI Margins for AI Workloads - The timeline for OCI margins to reach 30%-40% depends on the mix of data centers and the speed of capacity delivery [42][45] Question: Selling Additional Platform Services - The company has made its database available across multiple clouds and is enhancing its database capabilities to support AI models, which increases the value of its offerings [48][50] Question: Fungibility of Infrastructure - The company can quickly transfer capacity between customers, with a process that takes hours [56][58] Question: Cash Flow for Data Centers - The cash flow for data centers is structured to incur no expenses until they are operational, with various models affecting cash flow dynamics [60][63] Question: Confidence in Applications Business Growth - The company is optimistic about its applications business due to its unique position in offering complete application suites with integrated AI features [68][72]