Oracle(US:ORCL)2023-06-12 23:28Financial Data and Key Metrics Changes - Total revenues for Q4 2023 were $13.8 billion, up 18% year-over-year, including Cerner's contribution of $1.5 billion [13][16] - Non-GAAP EPS was $1.47, up 8% in USD and 10% in constant currency [15] - For the full fiscal year, total company revenue was $50 billion, up 22% [16][17] Business Line Data and Key Metrics Changes - Total cloud revenues (SaaS plus IaaS) were $4.4 billion, up 55%, with IaaS revenue of $1.4 billion, up 77%, and SaaS revenue of $3 billion, up 47% [11][12] - Application subscription revenues were $4.4 billion, up 37%, while infrastructure subscription revenues were $5 billion, up 15% [12][14] - Strategic back office SaaS applications now have an annualized revenue of $6.6 billion, growing 24% [11] Market Data and Key Metrics Changes - Cloud infrastructure growth rate doubled to 77% this quarter, with Gen 2 OCI growth even higher [7][11] - Total cloud services revenue was $15.9 billion, up 50%, with a 29% increase when excluding Cerner [16][17] - The remaining performance obligation (RPO) balance is $67.9 billion, up 47% in constant currency [18] Company Strategy and Development Direction - The company remains committed to fiscal year 2026 targets, driven by AI demand and differentiated technology [7][8] - A focus on customer success through a dedicated organization called Customer Success Services (CSS) [10] - Continued investment in building cloud capacity with 42 public cloud regions and plans for more [20][19] Management's Comments on Operating Environment and Future Outlook - Management noted that customers are seeking to spend less while needing to do more, driving demand for Oracle's technology [32] - The company expects cloud revenue growth to continue at similar rates to fiscal 2023, with an acceleration in total revenue growth [23] - Management highlighted the importance of their unique technology and customer experience in gaining market share [7][35] Other Important Information - The company repurchased 17 million shares for a total of $1.3 billion and paid out dividends of $3.7 billion over the last 12 months [21] - Operating cash flow for the quarter was up 42%, at $5.6 billion, with free cash flow up 46%, at $3.7 billion [18] Q&A Session Summary Question: Why is Oracle's cloud business accelerating while others are declining? - Management attributed the acceleration to customers wanting to spend less while needing to stay competitive, leading them to Oracle's more cost-effective solutions [30][32] Question: How much of the generative AI opportunity will be captured on the infrastructure side versus applications? - Management noted that the integration of infrastructure and applications provides a continuous feedback loop, enhancing both areas [38][42] Question: What is the status of cost synergies and operational integration with Cerner? - Management indicated that they are still at the beginning of the journey regarding cost synergies and operational integration with Cerner [51][52] Question: Can you provide insights on customer and industry concentration in the OCI Gen 2 business? - Management highlighted a diverse customer base across industries, with significant adoption from technology companies due to performance and cost advantages [55][56] Question: How is the company managing CapEx while seeing increased demand for OCI? - Management explained that efficiencies in infrastructure and ongoing improvements allow them to maintain CapEx levels despite increased demand [60][61]