Oracle Japan Q1 FY24 slides reveal 12.5% revenue growth, cloud business accelerating

Introduction & Market Context

Oracle Corporation Japan (TYO:4716) released its Q1 FY24 (fiscal year ending May 2024) earnings presentation on September 26, 2023, revealing strong double-digit growth across key financial metrics. The company, established in 1985 and led by Representative Executive Officer Hiroko Utsumi, continues to strengthen its position in Japan's enterprise software and cloud services market.

The company's stock closed at 15,200 JPY on September 3, 2025, up 50 JPY (0.33%) from its previous close. The stock has traded between 12,905 JPY and 17,875 JPY over the past 52 weeks.

Quarterly Performance Highlights

Oracle Japan reported total revenue of 57,372 million JPY for Q1 FY24, representing a 12.5% increase (+6,353 million JPY) compared to the same period in the previous fiscal year. This growth was primarily driven by strong performance in its core business segments.

As shown in the following revenue breakdown chart:

The Cloud & License segment, which forms the backbone of Oracle Japan's business, grew by 13.7% year-over-year, adding 5,788 million JPY to reach 48,005 million JPY. Hardware Systems revenue showed even stronger growth at 20.1% (+640 million JPY), while Services revenue slightly declined by 1.4% (-74 million JPY).

Operating income for the quarter reached 18,468 million JPY, increasing by 14.4% (+2,322 million JPY) compared to Q1 FY23. This growth rate outpaced revenue growth, indicating improved operational efficiency.

The following chart illustrates the operating income comparison and breakdown of cost factors:

The company managed to decrease SG&A expenses by 0.7% (-55 million JPY), despite increases in outsourcing (+204 million JPY) and advertising (+1 million JPY). This was offset by a decrease in human resources expenses (-256 million JPY). However, COGS increased by 15.3% (+4,086 million JPY), with significant increases in royalty payments (+2,579 million JPY), outsourcing (+792 million JPY), and hardware purchasing expenses (+609 million JPY).

Detailed Financial Analysis

Oracle Japan's performance can be better understood by examining the detailed segment breakdown of revenue and operating income:

Within the Cloud & License segment, Cloud Services & License Support showed strong growth, highlighting the company's successful transition to recurring revenue models. The Hardware Systems segment's 20.1% growth is particularly noteworthy in a market where hardware sales have generally been under pressure.

The company's balance sheet remains solid, as shown in the following summary:

Total assets stood at 174,507 million JPY as of August 2023, with current assets of 131,358 million JPY and fixed assets of 43,149 million JPY. The company maintains a strong cash position, though specific cash figures were not highlighted in the presentation.

Looking at longer-term trends, Oracle Japan has demonstrated consistent growth in both revenue and net income over the past five fiscal years:

Revenue has grown from 202,389 million JPY in FY19 to 226,914 million JPY in FY23, while net income increased from 43,360 million JPY to 52,009 million JPY over the same period. This consistent performance underscores the company's stable business model and effective execution of its cloud transformation strategy.

The comprehensive summary of recent operating results provides additional context for the company's performance trajectory:

Forward-Looking Statements

While specific guidance was not detailed in the presentation, Oracle Japan appears well-positioned to continue its growth trajectory. The company's strong performance in cloud services aligns with global trends toward digital transformation and cloud adoption, which have accelerated in recent years.

The robust growth in the Hardware Systems segment suggests successful cross-selling strategies and potentially increased demand for integrated hardware-software solutions. However, the slight decline in Services revenue may warrant attention as services typically provide higher margins and strategic customer engagement opportunities.

Oracle Japan's continued investment in cloud infrastructure and services, coupled with its established market position, positions the company favorably for continued growth in the Japanese enterprise software market. As organizations in Japan accelerate their digital transformation initiatives, Oracle's comprehensive portfolio of cloud services, database solutions, and enterprise applications should continue to find strong market demand.

Full presentation:

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