ORCL - Earnings call transcript Q4 2020

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Operator

Welcome to Oracle's Fourth Quarter 2020 Earnings Conference Call.

Now, I'd like to turn today's call over to Ken Bond, Senior Vice President.

Ken Bond

Thank you, Holly. Good afternoon, everyone, and welcome to Oracle's fourth quarter and fiscal year 2020 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.

are CEO, and Safra today Larry Technology call and Ellison; Catz. the our Chief Chairman Officer, On

As a These made differ and business, may uncertainties our might reminder, some including Throughout statements. cause may predictions, today's discussion, today. important discussion materially will also estimates today's are actual other affect include factors potentially or relating information will that we be to statements which forward-looking. to expectations, considered present from that being forward-looking statements subject forward-looking results these forward-looking to statements, risks

placing that forward-looking As in publicly we future a affect factors and stock. result, complete our finally, undue or we our price our to we events. reliance future market to any any not you release other new our revision XX-Q results And the statements these caution most revise and a of you applicable statements and obligating light of these reports, ourselves for including against of our XX-K discussion are forward-looking information these review or recent on encourage and or may risks results of amendments,

questions, we'll with I'd over a to few begin prepared that, call remarks. to turn And the with like Safra. taking Before

Safra Catz

much of with unemployment XXX come with was programs helping National CDC, helping that some this have levels importantly, states and partners and To call loan occasion. as There A in supporting customers response their afternoon, stories overall pandemic. most could engaged that to volume were how helping the that with reached weeks working many, technology, the the around up, underscore we lot pandemic. out are focused were we fight listening have it we're massive health in well ongoing think were around authorities hurriedly to has or couple still all world are to customers of usual. am of technology, Thanks since imagined. trials everyone. for all Red this workforce when pleased we jobs, or and over employees COVID-XX. systems successfully home the I our or supporting with I as Within global the federal our spikes, and Ken the the clinical employees quarter. They Overall, our business many pandemic as happened our performance and get March and to customers or stood closer believe call a our we because we them we they this, and building few all circumstances customers working handle are good know Whether the many found start, our of that transitioned systems weathered mitigation selling we to working against I checks Cross earnings XXth result. like world of a from you still actively supporting under more to conducting there HHS, our COVID-XX help proud and ourselves and other the rose the our many, are the the have we with unusual on challenges

trained wanted and In and the surge of free certification autonomous on Cloud huge to a around countries University We being addition, decided technology. demand, latest provide charge in of hundreds of with individuals to we training it. across database and Oracle certified Oracle's world addition, who through on infrastructure XXX saw thousands Oracle all

Now we with pipeline entered an business. QX transactional enormous of

pandemic. most deals, by in the especially As affected industries the progressed, a saw in we quarter drop-off the

rapidly booked. building And as forced of of to how reopening COVID-XX that competitors, to most we we're this workloads on-premise created were new AWS to these they the ultimately reconsider customers Since some cloud. deferred losses not have these begin their an pipeline alternative discussions believe Azure. while economies, be that challenges countries looking have resumed. that As their also moving to cloud, companies many business projects, already us including to and are work customers with in the will

than engaged with a the OCI we OCI to was more these they found infrastructure As customers, part less easy use, competitors, making of expensive more secure, discussion. performant now our and serious

unprepared We and the interest modern with of social the mobility, showing many renewed entered the application are on side business seeing in cloud are built-in. machine this also applications as customers now and learning pandemic

up dollar was up from up unless year. an revenues up X%. review unexpected up non-GAAP the X% in quality, U.S. were using Keep HCM was billion, subscription our there for X% was down of quarter GAAP U.S. being up is currency revenues after X% earnings $X.XX mind otherwise. Vertical a to up revenues XX%. infrastructure License dollar. revenue, XX% share, XX% revenues say year with strengthening USD GAAP was and total the $X.X in, up Moving up the NetSuite QX. License results last XX% quarter. for the were billion, XX% from headwind in currency your company database X%. $X.X application total were to accounted incremental that with of subscription billion, as quarter and and revenue up up were is apps SaaS the which for XX%. $X to per headwind billion, $XXX the rates which negative. than flight dollar were All I'll down to was last subscription I X%, resulted the last in $XX.X million from XX% revenues ERP total constant numbers, up for The more Total billion, -- Fusion up Cloud quarter and Fusion X% and revenue was $X.X Services XX% models XX% ERP last Fusion Support both

year, expenses the by lower margin operating Non-GAAP X%. income slightly billion, up XX%, last operating was saw begin year. was acted our X% from As the swiftly pandemic we take $X.X we hold, to operating from and last to down

tax a quarter interest of and XX% a the by XX.X% U.S. the in we in in our rates, up in was was non-GAAP As The added debt for guidance. EPS of result expense, some early very X% in currency. advantage quarter EPS rate in as up items, discrete take to which favorable and of $X.XX, lowered the not my dollars, X% rate tax issued reminder, billion below base interest $X.XX March U.S. was $XX dollars, constant

$X.XX GAAP down and X% tax down EPS X% GAAP USD discrete currency U.S. The mentioned, I had a items, of $X.XX in constant a in in dollars, result and on As some impact negative also was XX.X%, currency. EPS. rate was

XX% Non-GAAP four at Now total for Operating billion, and constant last as year, and $XX.X X% currency. company expect XX% revenue was were in Total up the year billion. from up greater slightly XX%, was third slightly was full License years scale up up percentage the margins cloud. cash revenue accelerates, $XX.X benefit revenue, X% total margin see fiscal the revenue consecutive for The year $XX.X operating up full from coming the last currency. in quarters constant in record our up I $X.XX accounting we company for year growth USD, Cloud over XX% at in for billion, the we flow will in EPS and and year. Services the double-digits was of Support and

four this customer of delays quarters saw expenditures Capital over revenue We payments securities. and $X the now full we some free year for over worked billion. have expect QX, $XX.X payments the was cash fiscal billion. We to $X.X in the more $XX billion, suffered During in with collected customers than customers, due and and marketable balance were course cash the billion that financial short-term as deferred is these be last in pandemic those The hardship. we flow will year.

in in quarter, in pronounced Now to currency. to currency, because But that's remind X% deferred of X% up gross differences down payments, revenue were customer due was more want constant constant this I which COVID-XX. you, timing

before, debt we're dividend. and acquisitions, to prudent As committed to a strategic repurchases, through shareholder returning use we've value stock of technical said innovation, our

we million a of This billion. shares total repurchased nearly quarter, XXX for $X.X

for last the XXX a months, of repurchased billion. Over million shares total XX we've $XX.X

reduced years, have Over the the nearly by outstanding XX XX%. shares last we

dividends addition, over the of months, again quarterly $X.X a Board declared dividend paid out billion and the of of we share. last XX Directors have In per $X.XX

are to uniquely would and of But on for offerings. focused for QX. I forward on Now, what to earnings before said our carried the like I'd that with we few delayed restate of customers believe, need had core the reason though have is that the revenue is clearly we believe QX technology, and is by customers this And modern QX the guidance, which call, every expanding the and timing business to broadening. our a relationships the pandemic has actually momentum months, moving our which was pandemic, more Oracle's at our accelerating to

We are business growth, confident becoming because our our mix in increasingly is favorable. of

around one that The underneath, is a averaged decline the revenue is revenue while few growth I X%. has clearly X% up businesses overall declining. declining stable Our years, distinct last X% and stable the double-digit three at of almost businesses to now or our growing, XX% were What see growing groups: businesses compound annual one over X% in and one grown rate. have growth one averaged

will than point a businesses. are our We larger this And forward. where acceleration shift at businesses drive inevitably revenue are now growing our going favorable declining now

installed that of our on-premise SaaS Second, customers our we application not continue SaaS One, I to from and do take business the have momentum as move share increase as SAP a very for our true base believe competitors, offering. cloud will large to

Our and products importantly, mobile secure, modern, referenceable. are highly performant,

these move the ERP to will to Fusion. we cloud, Oracle they believe of more As move that workloads

our worth databases decades' and started move valuable which the Third, of cloud. to have contain only database recently to information the customers. These we Oracle of applications, most four have mission-critical

technology place Database, where they they far at lower Now Autonomous a with price. get have better to a go

is, a as going with database cloud measured cost, Autonomous runs our care own Oracle standard customer's Autonomous in Autonomous most and is those and release the center The that Database who absolutely the For security, will everyone revenue Cloud and our else in Database performance forward The Database Infrastructure will acceleration question, significant about on data grows. without public drive Cloud@Customer. it against. be

continuation become are the companies OCI for revenue is GenX believers. they Lastly already momentum ACR Autonomous mentioned. analysts large our We're of innovation every that see IDC This will it's Database over once Forrester, evidenced others, leadership nearly whether in way, technology recognizing OCI it's publisher, differentiated independent see in QX. technology, revenue consumption In or accelerate our is mix XXX% the favorite rates this Pick the in fact annualized industry in right you of chart. these that grew thrilled two year. for OCI by Across will the I've that businesses categories, that in businesses universally our technologies the XX% Gartner QX. and are give By all the These me existing Oracle growth a the that product getting be in to higher your any grew number. from shifts and our the summary, upper our leading favorable cloud. growing confidence or growth

Now volatile, to extremely is guidance. all a the in it today Currency and non-GAAP on is basis guidance clear in QX. seen, My as what and happened you've is constant currency.

and currency a to X% to is in expected positive $X.XX $X.XX to between between My constant currency. X% remain I'm currency expected $X.XX be EPS X% However, in and rate on headwind, headwind, that, effect have grow now, revenues expected in $X.XX should a are and USD. EPS assumes constant QX X% guidance I'm $X.XX EPS you, effect QX. of telling in to and X% assuming USD X% and for exchange to expected grow revenue USD. and negative assuming grow in the from is from revenues X% X% XX%. X% assuming non-GAAP projecting currency rates negative in same constant not total Non-GAAP they to base current on X% in are currency, a to total are tax negative between as And Total just though and a EPS grow $X.XX

fact, However, actual given these in for vary. to quarter But XX%. any tax events expect average rates onetime in normalizing tax will, I could around our onetime events, that tax tax for cause rate

related Now -- I taken into uncertainty as as the account, the I've given pandemic. much can, to the

will providing be to the said but of fiscal a we have going move level XXXX, And Larry that that, over accelerate as I COVID-XX. past not for confidence I I'm with high revenue earlier, our as guidance for Now I'll it his turn year comments. entire to on

Larry Ellison

we're wins but second-generation with is software the Infrastructure labor do. cost and from listing Amazon's, defining why technology reliability. the Database, is relationships our Autonomous to Eliminating GenX I Google's eliminate this lowers human want error. XxX. the They is were Oracle human new systems separates Autonomous generation-one dramatically before customer Microsoft's were Cloud world's autonomy many Thank humans eliminate Linux, Eliminating data system. you, Oracle for There start autonomous Autonomous human nothing additional and for Safra. And self-driving Oracle to to security that learn there technology, explain Look, we of cloud. cloud I Zoom announced quarter, great dramatically autonomous cloud. and winning. and humans increases wins, the the and running computer an system error others. only Autonomous labor nothing human

opportunity which the at data stored Database it This system automatically is and required an required or processors no no system, itself, the continuously reduce human truly itself for to and all the configures while monitoring, be itself security all running. new world's big itself Linux of while is will itself, losses to There's There's while a downtime popular is is of happens currently to data by availability user soon database big remediation Furthermore, downtime OCI have. processors system is system. autonomous deal. does things the compute, your number and the the and up patching down patches Oracle downtime scales The It data is Amazon Oracle of elastic. system running. There's of to number storage, all itself very patch. the error. [ph] that itself, Autonomous human provides is operating maintaining those encrypts provisions itself, and XX.XX% the continuous caused no autonomous Oracle with change, version. and Autonomous if and while running. patterns as error in any were serverless no updates installing et services, only cetera, you're All continuous access using required the tunes grows double the and There

The and automatically will down we itself about while have and popular guys storage, all this. truly the have all popular elastic, other Oracle running. you don't compute, scaling things The OCI up elastic elastic – serverless are

even the for That's you keep reserve cloud use. of where only what you other not we have to often use the you and case have Oracle compute So That's don't Quite less you capacity, for the customers less in pay and promise case. clouds, pay in it. if it, the the Cloud. to Autonomous

public has regions Oracle XX The cloud now GenX live. Okay. OCI

have will currently which Soon, we regions live count than AWS, a is at more XX. of

will, run locality a this allowing regions, sovereignty cloud XX GenX without data data requirements. customers compromising year, add more OCI in fiscal We public to another or

applications. Oracle's database offering. Cloud@Customer, lower And AWS, at delivers their of cost cloud For Google None vendors their GenX this infrastructure why we higher – some security Oracle the or for you And who own about. are about To that's the have SaaS we Cloud. OCI tell than a autonomous, serverless, deals elastic to Zoom. summarize, much behind cloud needing cloud the customers of offer of won better that's applications cloud other our other or Azure services, run customer center or in and data performance, to I'm all own wanting their of other the firewall, including kind Oracle for uniquely our just either the

Okay.

because and extraordinary OCI scalability, Zoom of reliability scale network. to supported where price, participants. cloud the grew. for of Usage Every times OCI selected deployment, Zoom. move advantages thousands of Oracle We've Zoom able continued of hundreds to capacity -- additional with supports our simultaneous our millions security. data. Zoom now Oracle hours in help scale an Demand conferences Within meeting start increased our through the Let's demand participants. petabytes, performance, more day, X Zoom amount been first almost immediately. simultaneous has ramp, meeting has Zoom as That's of of cloud and Zoom's January. needed since XX services OCI than

Okay.

moving cost they in to were monthly the performance process, better much active they by at surprised and deal, by AWS sealed and services XX for base of the AWS, Once the of performance achieved, and part performance the XxX users. gains great our began surprised million out gains better sales move savings its that their XxX, was their achieved OCI. of services price, system growing some They they decided very much out by to OCI so that of of of demonstrated performance Oracle. moving their strength the XxX, win, OCI example addition and AWS moving for customer of a all into into Another to a by Zoom out of enhancements.

Another built Oman, government offering public the data Omani different OCI three-year agencies have a Group, Information compromising data of a within center, to able requirements. OCI public they dedicated to Oman. win, services, again the the cloud locality Technology without their contract, sovereignty This Cloud@Customer Communications cloud, services GenX in data OCI their and GenX or public means they'll cloud, OCI full be benefits all the

the They ninth Jefferies, HCM largest picked GenX applications. over both largest public and also ninth-- plan win, to AWS Oracle Oracle's firm are world's their using XXX to investment move cloud. extend Fusion world's to OCI workloads Another Azure. over Jefferies

words, chose Exadata of Another Civil with XX%, approximately being by Arabia, reduction when sovereignty. cost government Authority Aviation Saudi win, factors data was considered own General 'The while for that Cloud@Customer, requirements were compliance Cloud@Customer in the in in key customer's we

the the also the testing. Cloud@Customer that support to coronavirus Oracle could so is And COVID-XX on-premises its to continue and they Diagnostics, GenX self-repairing Cloud@Customer, invest current on -- the our the pandemic. testing. new Quest migrate, expanded self-securing, MyQuest business both Quest leveraging its world Exadata diagnostic in leader of Oracle by the cloud to business with Autonomous Autonomous of team environment new Database on its Additionally, support And anticipation innovation to battle upgraded functions. characteristics ongoing self-driving, time existing line-of-business, Exadata Database.' dramatically increased Exadata Quest the focus environment, portal in save an corporate could company Quest and antibody Cloud@Customer Exadata against effort.

Santander Exadata their adopting bank's on Autonomous is transformation. Cloud@Customer to the support databases and digital Bank, Database win, Oracle's Santander Another our consolidating

Cloud Infrastructure, Bank TD from cloud, XXX along cloud a its the deployment. to including data. Cloud their more Data XXX,XXX-plus and terabytes its commitment with including plans with dramatically Services, uses commitment move Data data the SaaS, Guard, win, I/Os multiyear Cloud configuration Oracle's Bank Oracle public made has in Verizon Infrastructure Oracle GenX customers OCI process warehouse serving Canada. Another cloud, OCI TD with Group, over Business use Public Verizon an to to more and public Oracle. the per public workloads workloads and integration Exadata to globe. Verizon Cloud reporting RAC Autonomous Group the Verizon and Oracle four-year more over second These to move moved increase to business financial to mission than a GenX already around critical on-premise and systems workloads a IOPs, contract. and XX Oracle's of

their Another win, to be as and Cloud protection, the analytics Public OCI four-year Database own using metal to to bare its their Cybereason SaaS analytics. with Autonomous service. the customers Using will Oracle's platform plus a run provide endpoint service contract. Cybereason, a run response

their this scale and using dynamics in cloud looking the the they run deployment Cloud thousands expect OCI This simulate cores European auto reduce Another the in year. manufacturer. a will compute Public to performance of and a to development scale end environment capital for crashes They -- large customer cost and computational car their flexibility. to very up fluid elastic, by of highly OCI is high up win, many introduce support car to

win, Societe Generale, a Another three-year formerly contract. SGS,

improving e-business the peering SGS's to to doors performance. user Moving Microsoft GenX and next Cloud, Oracle's OCI multiple Azure GenX of including while workloads open with This transition suite goal OCI to Public on phase Cloud, application the a Public wins Cloud. lowering reliability with XX,XXX costs, focused the Public of security,

new enables migrating SaaS of data May, contract some Synacor, existing three-year their businesses them They of SaaS they contract. they are ISVs expanded production lower environments found number Infrastructure. to AWS customers is Sky.One, to at win, migrating a OCI, to and their performance much shutdown the three-year cloud Cloud own Oracle's cost. Oracle's initial that continued SaaS In both and running centers. contract. better their a has which again Sky.One Another as much on a their applications. they that gave Brazilian Oracle After their Cloud,

result, of moving a As all are cloud. their to Oracle the workloads they

quarter Finance center newly GenX entirely in Cloud Another about migrating a to and was is five-year India, move -- don't I'll to times their time all. site. They one, high-performance with Infrastructure, data spectacular Mumbai name -- quarter, a launched, infrastructure contract. the the I infrastructure. five them win, of three-year a contract, initial I'll of stop the their our for in center. deals more Manappuram which workloads our GenX There lot to disaster and another win for more fourth to GenX they're Hybrid have Hyderabad contract, Oracle size OCI. data infrastructure their a the Altair, decided but and last OCI With talk Public commercial and are recovery compute And in as

cloud wins. Oracle XX,XXX and ERP market ERP Currently, to X,XXX going on NetSuite nearly the cloud over application I'm Fusion customers to technology cloud now, and is move right customers. So, with ERP leader

cloud. have lists Fusion their SAP dramatic listed ranking, competitors. with lower from We our the HCM with that change Workday's most our Workday growth few growth ERP HCM successes ERP half, top these decisions. bundled Fusion, rates largest HCM We've part system, in ago. cloud as more purchase purchase, the seen years a rates. the a purchasing cloud a but never has result overall ERP And the are customers applications ERP as ERP their in of a is our an seen purchase of a HCM of rates lower This an market half getting of HCM. in the decisions Gartner the ERP and their huge We've with come taken at Oracle for more fact because now lead are of days rewrote competitor, Fusion HCM ERP Fusion a SAP decision. surpass now very growth

We looks also going able our and it are cloud biggest advantage to the our to in like scale the already, by and to become biggest cloud ERP ERP ERP be HCM far, we're leverage player, in player.

go I that this like the HCM to QX quarter, Before on I'd highlight pandemic. to and few live customers key ERP during a Fusion the went wins in

JPMorgan Chase. XXX,XXX quarter candidates Chase JPMorgan system. live on of JPMorgan their was HCM, this implementation not Maybe successful. employees Recruiting. went moved initially Workday in two past Chase Recruiting Goldman but has was Goldman First recruiting in their interesting Oracle the already XXX Sachs one, over purchased most over the countries, with Cloud and HCM new million to Sachs. Oracle Cloud,

acquired go online. live Workday. believe a Thereafter, higher Research ago. HCM that Forrester It's Cloud went at over Goldman both they than a Oracle much They're little interesting Don't Oracle Sachs month reports. me, and HCM look rate and Gartner note the to

Okay.

really in things at the addition So, report. distinguished customer Look the was satisfaction. look also report, other Gartner where to Forrester at we ourselves in capabilities and

middle customer at and X.X in is right behind is Our the is sat right with rating us. right top the middle Workday far in X.X the

home. during I went at during of went that use pandemic Icahn and COVID-XX were could Sinai pandemic the go-lives XX-year-old the Hospital Oracle Those happened replaced Another they all the They Cloud Medicine. pandemic, the HCM, company a that live that XX,XXX amid they're with frontline School HR tools accessible think modern, Mount system, to and very more support payroll right. live than They interesting. more with employees was

Okay.

EPM We chain also management. of a added supply lot in and and customers ERP

to data company recycle A manufacture end-to-end nearly start KPM complete digital large going with supply view going multiple an Fusion They're ERP, innovate Fusion systems a chain Fusion ERP. ERP applications one, achieve Oracle's bought standardizing transformation single leveraging vendors' of ERP. fulfill and a First Oracle of from operations. model to Netherlands back-office to to to global to design is Oracle networking X,XXX commercialize,

Project to in global Workday insurance the a ERP large though capabilities. beat Oracle ERP, $XX large over we customer Fusion provider worldwide program million multinational in signed already The replacement. were to modernize and multiple hub They deal – we corporate supply of subsidiaries A employees also ARR an Fusion chose deal. bought of HCM, win ranging ERP their and there be in Workday to our and tens Another out where because chain of incumbent for cost. were remove a XXX,XXX even conglomerate the We'll able but management, global they Management. Procurement dollars in of system was millions Asia our wide a their accounting HCM. rolling HCM operating and

cost Another Australia. win the using quarter, reduce their operate complexity EPM was in from of the standards ERP parent Westpac current and and in be to while They'll Zealand. quarter New Cloud banking to ERP Oracle win in their Cloud independently Oracle environment meeting local

I'm chain to move I'm HCM ERP and wins. supply to wins. stop doing going to Okay. going

largest Fusion and chat all box our integrated AI, our modern SaaS us we into enablers Kroger, to of first, of is win that America's can North SAP around were won from the machine into system their Oracle a allowed HCM. The with applications grocery key deal Okay, replacing this application, Digital all and HCM, our Assistant. integrated operate learning HCM smartphone, Voice capabilities

can expense cloud a between difference on do using our your us our voice and a Assistant. Voice lot calling up huge phone, makes You reports reporting, is mobile a competitors Oracle of Digital interface things other

Other disconnected U.S. very company, silos a healthcare with replacing Fusion quarter in separate HCM. Norfolk was in Petronas more, acquired County loss activities. were replace A workforce. right significant HCM back of Another valuable result Once Council, SAP data of to University Texas, they Anderson win Safra. to large enterprise HCM stop we're and MD over These of I'm again, their there, turn Malaysia. lots it going systems Cancer resource, their were most the Nations, wins Fusion the Managed XX visibility Center. There United the to of HCM at but managing HR here in

Safra Catz

Okay.

Ken Bond

Holly, to if move we portion now? of Thank Q&A call you, the Larry. could the

Operator

come to going Credit from Brad is question first of Our Instructions] the [Operator right. Zelnick, All Suisse. line

Brad Zelnick

in think you’re the your with taking about OCI Thanks you're bit the be Can wins too about quite having. particular, level pandemic Larry, very XxX having you business? don’t Zoom change any talk a might prepared I that for much impact outside much the In And quarter, Infrastructure the on very the question. what hear remarks, talked about you there your can but traction my base we more customer typical success on your and based in Cloud in seeing? like impressive. your confidence

Larry Ellison

is people what first think Verizon, some application. to great have people big -- actually – OCI the people end coming not trying. The I success. are mean, OCI. are that came group we seeing that their user have in Verizon, I customers business a very the it’s people now like They are to Its we we’re providing Well, who are of

was think, to found they right? makes capacity, I they cloud. and better they expand than someone found clouds they when more OCI So paying cheaper, business, but a tried number other their had of in else's less and they OCI faster getting on is clouds. prefer that other Zoom big which deal and a run

And when find were come out. you try I lowest OCI someone I try going think Oracle people the that's -- application here think of and an everyone a believes, the there Oracle. So don't cloud. Zoom are of to going they people exactly seeing was Not and picked them up just believe to you're fact, also. think your has bunch a lot cloud else's And cloud, that cost that -- the happening. shocked beginning is you is we it, build end that in use where what and shocked fastest if you're of in cloud. business But most once to Zoom Zoom our the cloud,

was Zoom at shocked secure. think much looked I more results less much they we to application after when were moved we they and and we the their were and expensive were faster, faster, Oracle,

are Azure better. bigger people Azure they going must so to as look and They to we our compare they and And bigger, as tried So the for and Once cloud. our far money our get users lot that so found as just Oracle is opposed think assuming, second-generation who just come cloud, think do must to or Azure. they're our have tried AWS is pick than they could example to perfect a lot done hey, win. a they AWS clouds could look, Verizon more AWS be Oracle, infrastructure someone better. end rest, infrastructure, as of with less then concerned, other a is be our we I

to our customers. is results get got We and we business the them base share if of to database Cloud cloud We've have looking. lot of to we're comparing We've a gigantic. right, that get them right, AWS, to in. our got installed get to going them that's lion's and our installed think to cloud. trying the of base, Infrastructure get I'm our our We've got If moving

have Earth. We largest database customers, including planet the hundreds of all the on and thousands of companies governments

Brad Zelnick

Thank Larry. Much you clear. very,

Operator

you. Thank

is Our next going of Sachs. Heather Goldman the Bellini, question from to come line

Heather Bellini

to I in to your the to cloud, that run OCI is of of in a of biggest wanted wondering, I launch how both this this Autonomous much that taking Safra, how now accelerating tailwind, you to much into a Cloud@Customer growth the very could adoption be when factor for levers one now question. you in of with Thank ability was with can year Database. then Gen Thank there? estimations Great. it's And you that accelerate the Autonomous? little revenue give just you XXXX? this able fiscal on-premise, about think on the factored you view your available Is And you. on-premise, and that both us see for bit talk Autonomous mentioned the sense X a you

Safra Catz

of detail. just and Larry, cover it I should it, then, going successful. that initial believe be very I is as a end important, in you do customers are we have this the is, our assumptions, only that, believe, think capability very counted on that have. my more it much And I underlying in very, Let incredibly using to I but me differentiated answer not that

believe to Autonomous Cloud@Customer so, tailwind and us an will not but though for really Larry, be the this acceleration, year, not I you don't I've do come. comment why incredible years it that Database? relied Anyway, And on on for for just it and

Larry Ellison

Okay.

came development this a the was pivoted development when strongly for and And of cloud, in of had ran we the cloud. thing lot that our But Autonomous the the public team we So a out database it did we to cloud Database. base. conspicuous only most public installed huge

use have And bank latest huge large wanted of cloud, on-premise. Oracle in a The base, database. technology, to could could Oracle sitting the installed it in data this get get was place they it is that's not Autonomous We the an have data world's didn't hundreds center Cloud@Customer. it. of it. of Database. thousands our Most But the customers. buy they their We couldn't public They in in valuable only

several had database access years, our to latest no for our customers technology. on-premise Amazing. So years,

So Exadata Oracle to Database, transaction on-premise for developing autonomous have improving continuously Cloud@Customer, finally customers system, the warehouse, now making we the it Oracle of all autonomous service Oracle available via data -- Exadata this gotten Cloud@Customer cloud Autonomous and offering. around public our process the after the our to

latest installed no And in so, base big technology, upfront cost customers to put is, for our and of attached on-premise very across it upgrade make on-premise smaller our to databases we now we own center buying who And agencies, our -- access It's then our capital customers for technology, We Again, of government customers, to thing. it manage network, get get on-premise database no in public you the for want had we our best latest And Autonomous them across big Cloud@Customer. data use number years, what's now access this attractive form the cloud, your the cloud -- cloud, like Database. technology. it except all the of for the database to banks, Exadata to happened their database just you. there's machines. Cloud@Customer we manage a to public can

a excited. GenX they product versus sudden, and this to Cloud@Customer GenX us. We're for a use. a great easy Cloud@Customer, install do. great We of thing very and the think other shift to gigantic of been is be all to going be has that's Now, engineered And amazingly GenX by about way, the

it and You it plug use. amazingly and in just install kind to easy of

in it plug of it just and works. kind You

your the long So to no will system. of There's to cloud we easy-to-use We into an and attractive We a have one biggest all and when upfront together. Autonomous new have data all – public ease and it's small, Database be you operating it's you centers from think use our it their to on-premise be system. going products of of and public we cloud think think – both transition on-premise going think hottest it's capital co-existence to the customers, during period that Cloud@Customer. and own of our ever, large

Heather Bellini

you. Thank

Operator

Hindlian-Bowler. the question next Sarah going is line our of And from come to

Sarah Hindlian-Bowler

be Thank that and any given right you Great. I'm business, migrations seeing just seeing software? I'm on-premise particular, your interested getting perhaps, pivot elaborate you, really any application if my well, growing definitely the than And appreciated? now. the like and on I'd so you and from in Can taking in you're is of and a Safra into insights important in in parts. and the And much. for around customer little Safra, commentary your Thank on what color questions. knowing Larry to will glad greatly especially you're trends shrinking safe applications accelerations cloud, everybody focus bit larger business parts

Safra Catz

Certainly.

products. in adoption is we of accelerating the basically So that have a drivers number this our business of

referenceable it. we about to of all, heard and Larry First a as both have more you talk customers, very large, small more

So many, new to makes it go references, many to easier we far us. customers ahead have convince and which choose

been success base the successful Lawson that they that all have a products old upgrading the and with are with lot that incredibly use that. possible cloud, customers the and with reach to on-premise we really of – on-premise are Secondly, customers no way we've so

customers, addition, the upgrade only cloud about E-Business started has to the massive our base absolute installed has X% in is installed which only of and base In Suite a to recently upgraded ERP.

build waiting way, was So as adopted as by they larger many Fusion that that. up the pieces of important ERP, of a picked around Many confidence supply business. having they customers been course have addition, and releases the but a product larger the of full financials and of they're customers could And wanted and until course suite. very have though manufacturers our especially financials, side have things, of really just one on chain references – they was including now the the supply chain, them our suite, to chain they and now starting and they do wanted the of in They the HCM, they supply mature many ourselves. like are in we wanted a

increased. momentum And so has the really

is us over grow that once many with part way, start Now the by of that, customers, time. customers our of

some grow at with common start is they'll very will module, it least that So, XX% they year-over-year, their with installation and us.

drivers different a relationship. So, we have the lot of to

our some So, charge, of got tell of in this could assist some it, and employees pandemic, the that being because in could better which this capabilities. been one take help HCM, with the of that our to for some working you, benefits for safety, so in they module start and so pandemic is some is no they track of their keep HCM I'll many of it HCM. support they at through And and them immediate more and partners, role customers in a adopt them, actually using very, help health on and them And adopted cloud. customers, very some where And interesting rolled them that divisions, out, additional has we necessary.

without like that be is between just but to course, on-premise a functionalities being difference on-premise. of the Of for you those giant big and And put been in could we which out system just it's SAP, integrator in. team new rolled possible being a it actually calling software-as-a-service nothing model like can where you things in out hosted roll have new kind where capabilities, can

momentum of lot a business. have we So, now in right this

Larry Ellison

add that available in then, to Oracle the made they’ll able We like said. That's that our new something rolled out. Safra But what customers to module to cloud. out I'd our will Yeah. And access take new be at if it home, module.

accessible fact your So, They all at these systems are smartphone. obviously. and is, the accessible home, cloud on are

And that's are technology. generation of operating a accessible huge to difference made their where the continue homes. able just previous more of much So, out they're people than

Oracle financial the If in get office. to no you're reason accountant, and drive system, to you and are there your an an using is car

your your office tools You home on computer. have the in laptop exact same sitting

Safra Catz

these are mean they are capabilities -- are I they Yeah. not only mobile. modern,

using. can came in only by them. UI, and to and that's and handy are build incredibly XXth forward. Thank get all XXst during more some capable. they century that, much get totally critical the started very success going that customers for which why very, this voice, the But is can You pandemic, day with realize confidence, between you. important literally of this you that century these is their they night work And and modern mean, technology, it not with them stuff, I moment

Sarah Hindlian-Bowler

Thank you. That was very helpful.

Operator

the you. day Moerdler, come And from the Bernstein. question for line will our Sanford last Mark Thank of

Mark Moerdler

you appreciate didn't you, was and Safra, lay question. one my didn't time understanding have that They my take off. employees. Thank furlough to Company any

well. You treated employees your

Can on margin. a you improvement? driving and big yet a bit, you color down exactly some us were sales what's license Thanks. Your beat margin give on big such

Safra Catz

we all. history money. traveling during any pandemic, people essential no have We very very at entirely flying work-from-home. being spend had this had And to I were there kind that our you about employees long somewhere Only go obviously, careful to to of we moved around. know in that of how a Well, think did

expenses. And T&E so didn't we have

watch down course, clear. our of to invest spending, compensation we future. just tried carefully expenses our to of commissions. really our And continuing That's addition, because In were while in

optimistic the strength fan out of, the prospects. products. very very as of kind very, I optimistic with And result, we're about field are also this our We that to a these about enough. and share capability of our say cannot

in make place team want strong we a very have technical field. we so strong sure and very And to a

don't did got what credit entire the to is do. were about and credit, take really we it able just team, things we to the are the this smart in. I -- reasonable team lot extraneous of the senior entire management Larry the just a spending management and careful that So bring the more Everyone,

Larry Ellison

to like I'd also. comment

I add to color that. little I'll a think,

totally Safra said. think -- Safra I I agree is everything with

actually about been good always there. think we've example controlling is we another I where this pretty very our have executed well and expenses

profitable maybe profitable even is are getting fact businesses important, think more important, that getting I smaller. bigger just businesses less our the while our are as

have the we we I we in some decline than are So what that early first that servers bought was talking don't mean, in very Safra are selling that businesses mix, about. care this when less call, the don't we on care much about SPARC Sun.

You a know, have there storage are systems. businesses bunch we of

lower were products. Gen HCM, businesses infrastructure, like rise; higher our a of number in are our businesses like are that Fusion of businesses X, margin that have the much Autonomous on We bunch OCI Database. decline and have are Fusion that we ERP, a profit margin Fusion SCM, These

some margin it's fundamental I on bad shift, see as shift. mix should think of of because times So change. what's this what's conservation good in and businesses going businesses times get our you margin lower margin expansion mix going And -- really margin a and bigger, mix the in get is smaller our higher

has will you think at someone I a explains their large say, if is cutting bottom-line big That cutting strong, last -- has cutting very mean, lot the deal several a growth though spectacular. change not top-line true. been been but not be they I costs costs costs. very over mix of and and Well, guy, and growth must their even just and the why Oracle look years by is

Our mix is changing.

are businesses getting profitable Our bigger.

anything our allowed plus less were did manage beat combination Safra to all very don't away profitability traveled Obviously, of in outlined things, wonderful team, earnings big to to us it's a terms in change had this is getting fewer really those from which the those allowing quarter. things. businesses take traveling. mean we of of two watching penny But the improve of when in a an and topline we expenses job everything a Our in deliver that hold us how tough the impact profitable and hotels and that our every even less. on to margins, our challenged. That's smaller. are We I mix

Mark Moerdler

you. Thank

Ken Bond

any in earlier Investor department A forward for the for for to be Please Relations us the and call call today. back Thank call you. speaking joining available Dial-in call information look follow-up the Larry. this Holly that, be with press found again you Thank you, telephonic questions with we issued turn replay hours. of closing. will XX release can conference to With this from I'll today.

Operator

again, participating you. Oracle like quarter to in for Thank Once we'd call. conference XXXX four today's thank earnings you

disconnect. now may You

Oracle (ORCL) 16 Jun 202020 Q4 Earnings call transcript