Earnings call transcript: Oracle Q4 2025 beats EPS forecast, stock dips

Oracle Corporation reported its fourth-quarter earnings for fiscal year 2025, surpassing EPS expectations with an actual EPS of $1.70 against a forecast of $1.64. The company’s revenue also exceeded projections, reaching $15.9 billion compared to the expected $15.58 billion. Despite these positive results, Oracle’s stock saw a slight decline of 0.55% in after-hours trading, closing at $177.39, influenced by broader market conditions. According to InvestingPro data, Oracle maintains strong financial health with an overall score of 2.74 (GOOD), though current trading metrics suggest the stock is in overbought territory.

Key Takeaways

• Oracle’s Q4 EPS surpassed forecasts, reflecting strong operational performance.
• Revenue for the quarter grew by 11% year-over-year, driven by cloud services.
• The stock dipped slightly in after-hours trading despite strong earnings.
• Oracle’s cloud and AI initiatives remain central to its growth strategy.
• The company plans significant capital expenditure for cloud expansion.

Company Performance

Oracle demonstrated robust growth in the fourth quarter of fiscal year 2025, with total revenue increasing by 11% year-over-year to $15.9 billion. This growth was primarily fueled by its cloud services and license support segment, which saw a 12% increase. The company’s strategic focus on integrating AI capabilities into its offerings and expanding its cloud infrastructure has positioned it as a formidable competitor in the technology sector. With a market capitalization of $495.4 billion and an impressive gross profit margin of 71.12%, Oracle continues to demonstrate strong operational efficiency, though InvestingPro data indicates the stock is trading at relatively high valuation multiples.

Financial Highlights

• Revenue: $15.9 billion, up 11% year-over-year
• Full Year Revenue: $57.4 billion, up 9%
• Non-GAAP EPS: $1.70 in Q4, $6.00 for the full year, a 9% increase
• Operating Cash Flow: $20.8 billion for the year, up 12%
• Remaining Performance Obligations (RPO): $138 billion, up 41%

Earnings vs. Forecast

Oracle’s actual EPS of $1.70 exceeded the forecast of $1.64, marking a positive surprise of approximately 3.7%. The revenue also surpassed expectations, coming in at $15.9 billion against a forecast of $15.58 billion. This performance reflects Oracle’s effective execution of its cloud and AI strategies.

Market Reaction

Despite Oracle’s earnings beat, the stock experienced a slight decline of 0.55% in after-hours trading, closing at $177.39. This movement could be attributed to broader market trends or investor profit-taking following recent highs. Oracle’s stock remains within its 52-week range, with a high of $198.31 and a low of $118.86. The company maintains strong momentum with a beta of 1.32 and has delivered consistent returns, showing a 6.49% gain year-to-date. Get comprehensive valuation analysis and 1,400+ detailed company reports through InvestingPro.

Outlook & Guidance

Oracle’s outlook for fiscal year 2026 is optimistic, with projections of over $67 billion in total revenue, representing a 16% growth. The company expects cloud revenue to grow by more than 40% and cloud infrastructure revenue by over 70%. Oracle’s aggressive expansion plan includes a significant increase in capital expenditure, with over $25 billion earmarked for fiscal year 2026.

Executive Commentary

• "Oracle will be the number one cloud database company," stated Larry Ellison, Chairman, highlighting the company’s leadership aspirations.
• CEO Safra Katz emphasized, "We are the destination for everyone who wants AI workloads, database workloads, and applications."
• Ellison also noted, "The demand continues to outstrip supply," underscoring the high demand for Oracle’s cloud services.

Risks and Challenges

• Potential supply chain disruptions could impact product delivery and customer satisfaction.
• Intense competition in the cloud services market may pressure Oracle’s market share.
• Economic uncertainties could affect enterprise spending on IT infrastructure.
• Regulatory changes in data privacy could necessitate costly compliance measures.
• Rapid technological advancements require continuous innovation to maintain competitiveness.

Q&A

During the earnings call, analysts inquired about Oracle’s AI platform capabilities and the company’s strategy to meet the growing enterprise demand for cloud infrastructure. Executives highlighted the advantages of Oracle’s integrated application suite and multi-cloud database deployment, which provide flexibility and scalability for enterprise customers.

Full transcript - Oracle Corporation (ORCL) Q4 2025:

Sarah, Conference Operator: Hello, and welcome to the Oracle Corporation Fourth Quarter and Full Year twenty twenty five Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session. I would now like to turn the conference over to Ken Bond, Head of Investor Relations. Please go ahead.

Ken Bond, Head of Investor Relations, Oracle Corporation: Thank you, Sarah, and good afternoon, everyone, and welcome to Oracle’s fourth quarter and fiscal year twenty twenty five 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. Additionally, a list of many customers who purchased Oracle Cloud Services or went live on Oracle Cloud recently will be available from our Investor Relations website. On the call today are Chairman and Chief Technology Officer, Larry Ellison and Chief Executive Officer, Safra Katz. As a reminder, today’s discussion will include forward looking statements, including predictions, expectations, estimates or other information that might be considered forward looking.

Throughout today’s discussion, we will present some important factors relating to our business, which may potentially affect these forward looking statements. These forward looking statements are also subject to risks and uncertainties that may cause actual results to differ materially from the statements being made today. As a result, we caution you against placing undue reliance on these forward looking statements, and we encourage you to review our most recent reports, including our 10 ks and 10 Q and any applicable amendments for a complete discussion of these factors and other risks that may affect our future results or the market price of our stock. And finally, we are not obligating ourselves to revise our results or these forward looking statements in light of new information or future events. Before taking questions, we will begin with a few prepared remarks.

And with that, I’d like to turn the call over to Safra.

Safra Katz, Chief Executive Officer, Oracle Corporation: Thanks, Ken, and good afternoon, everyone. As you can see, we had an excellent fourth quarter to finish out an amazing year with Q4 total revenue and EPS both exceeding my guidance. We are reporting our fiscal year end results just eleven days after the last day of the quarter. Using Oracle Fusion, we continue to announce our quarterly and annual financial results faster than any other company in the S and P 500. Now a few years ago, I told you that we’d reached a tipping point in our cloud transition and expected revenue growth to accelerate, and it has.

In Q4, we hit double digit revenue growth, and it’s only going up from here. Even as the company gets bigger, Our remaining performance obligations now stand at 138,000,000,000, up 8,000,000,000 from last quarter and up 41% from last year. And yet the best is still to come. Our applications business was the area we moved to the cloud more than a decade ago, and we are now the leader in enterprise back office with SaaS solutions for ERP, financials, EPM, HCM, supply chain, and manufacturing. With the addition of over 100 AI agents along with strong bookings and higher renewal rates for our strategic SaaS products, I expect the cloud applications growth rate will accelerate this coming year.

Our infrastructure business was the next area to move to the cloud. We made engineering decisions that were much different from the other hyperscalers and that were better suited to the needs of enterprise customers, resulting in lower costs to them and giving them deployment flexibility. OCI has seen exceptional demand for infrastructure services, and those contracted noncancelable bookings in RPO give us confidence that OCI revenue will grow over 70% this current year. Included in that is that Oracle Autonomous Database and the AI data platform. Enterprises know that their AI needs demand the most capable database to manage a company’s full dataset.

Further, with our AI and autonomous features, our customers can bring all their data together, make it available for LLMs, and yet have the best security built in. In addition, our customers have the flexibility to run their Oracle databases in OCI, in private clouds, or in partner clouds with our multi cloud offering. But what is clear is that more customers will use the Oracle database to leverage AI. So as a result of the strength in our cloud applications and infrastructure, including database services, we are raising our revenue guidance for fiscal year twenty six to over $67,000,000,000 up 16% for the year. Now for to the results.

And as usual, I’ll be discussing our financials using constant currency growth rates as it is how we manage the business. Total cloud revenue, SaaS plus IaaS, was up 27% at $6,700,000,000 And total cloud services and license support revenue for the quarter was $11,700,000,000 up 14%. IaaS revenue was $3,000,000,000 up 52 on top of the 42% growth reported last year. OCI consumption revenue was up 62% and demand continues to dramatically outstrip supply. Our infrastructure cloud services now have an annualized revenue of nearly 12,000,000,000.

Cloud database services, which were up 31%, now have annualized revenue of $2,600,000,000 Autonomous database consumption revenue was up 47% on top of the 25 27% growth reported last year. As on premise databases migrate to the cloud, either on OCI directly or through our database at cloud services with Azure, Google, or AWS, we expect that cloud database revenues collectively will be the driver of revenue growth alongside OCI and strategic SaaS. We are we are currently live in 23 cloud regions with database at cloud services and have another 47 planned. Database subscription revenues, which include database license support, were up 7%. Infrastructure subscription revenues in the quarter, which includes license support were $6,700,000,000 up 19%.

SaaS revenue was $3,700,000,000 up 11%. Application subscription revenues, which includes support, were $5,000,000,000 up 8%. Our strategic back office SaaS applications now have annualized revenues of $9,300,000,000 and they were up 20%. Software license revenues were up 8% to $2,000,000,000 So all in, total revenues for the quarter were $15,900,000,000 up 11% from last year. Operating income grew 7%.

Non GAAP EPS was $1.7 in U. S. Dollars, while GAAP EPS was $1.19 in U. S. Dollars.

The non GAAP tax rate for the quarter was 9.7%, higher than my 19.7%, which was higher than my 19% guidance. For the full fiscal year, total company revenue was $57,400,000,000 up 9%. Total cloud services and license support revenue, which is entirely subscription based and accounts for 77 of total revenue was $44,000,000,000 up 12%. Total application subscription revenue grew 7% and infrastructure subscription revenues grew 17%. Total cloud services were up 24% to $24,500,000,000 IaaS or cloud infrastructure revenue was up 51 to $10,200,000,000 for the quarter with consumption revenue up 59% from last year.

SaaS revenue was up 10% to $14,300,000,000 for the year. Non GAAP EPS for the full year was $6 in USD, up 9% and full year operating income grew 9%. As mentioned, remaining performance obligation at the end of Q4 is now $138,000,000,000 up 41% in USD. Further, our cloud RPO grew 56% on top of the 80% growth last year and now represents nearly 80% of total RPO and approximately 33% of total RPO is expected to be recognized as revenue over the next twelve months. For the year, operating cash flow was up 12% at $20,800,000,000 and free cash flow was a negative 400,000,000 with $21,200,000,000 of CapEx.

Operating cash flow for Q4 was $6,200,000,000 while free cash flow was a negative $2,900,000,000 with CapEx of $9,100,000,000 The vast majority of our CapEx investments are for revenue generating equipment that is going into data centers and not for land or buildings. I expect that FY 2026 CapEx will be higher at over 25,000,000,000 as we work to meet demand from our backlog. As we bring more capacity online, our revenue and profit growth will further accelerate. At quarter end, we had $11,200,000,000 in cash and marketable securities. The short term deferred revenue balance was $9,400,000,000 We are committed to returning value to our shareholders through technical innovation, strategic acquisitions, stock repurchases, prudent use of debt and a dividend.

This quarter, we repurchased a little over 1,000,000 shares for a total of $150,000,000 And over the last ten years, we’ve reduced shares outstanding by more than a at an average share price of just over $54 In addition, we have paid out dividends of $4,700,000,000 over the last twelve months and the Board of Directors again declared a quarterly dividend of $0.50 per share. Since it’s the beginning of FY 2026, I’d like to comment on the financial acceleration we expect to see in the coming years. Between our $138,000,000,000 RPO and even larger pipeline, we have a clear line of sight to future revenue growth. So for fiscal year twenty twenty six, I expect that total cloud revenue will grow over 40% in constant currency, up from 24% in FY twenty five. I expect the cloud infrastructure revenue will grow over 70%, up from 51% in FY twenty five.

I expect total revenue will be at least $67,000,000,000 up 16% in constant currency and up more than $1,000,000,000 from our prior guidance. RPO is likely to grow more than a 100% in fiscal year twenty six. And lastly, I expect we will exceed the revenue growth target we previously provided for FY ’27. Beyond FY 2027, I am even more confident in our ability to meet and likely exceed our previously provided FY

Sarah, Conference Operator: 2029

Safra Katz, Chief Executive Officer, Oracle Corporation: target. We will provide a more fulsome update on our long range financial targets at the Financial Analyst Meeting at Oracle Cloud World in Las Vegas in October. Now let me turn to my guidance for Q1, which I’ll review on a non GAAP basis. Now assuming currency exchange rates remain the same as they are now, currency should have a $02 positive effect on EPS and a flat to one percent positive effect on revenues depending on rounding. However, of course, the actual currency impact may be different.

Total revenues are expected to grow from 11% to 13% in constant currency, are expected to grow from 12% to 14% in US dollars. Total cloud revenue is expected to grow from 26% to 30% in constant currency and U. S. Dollars. Non GAAP EPS is expected to grow between 4% to 6% and be between $1.44 and $1.48 in constant currency.

Non GAAP EPS is expected to grow between 5% to 7% and be between $1.46 and $1.5 in USD. Lastly, my EPS guidance assumes the base tax rate of 19%. However, one time tax events could cause actual tax rates to vary. We had a great year. And this year, the one we’re in now, will be better.

Oracle is well on its way to being not only the world’s largest cloud application company, but also one of the world’s largest cloud infrastructure companies. And with that, I’ll turn it over to Larry for his comments.

Larry Ellison, Chairman and Chief Technology Officer, Oracle Corporation: Thank you, Safra. Oracle’s future is bright in this new era of cloud computing. Oracle will be the number one cloud database company. Oracle will be the number one cloud applications company. And Oracle will be the number one builder and operator of cloud infrastructure data centers.

We will build and operate more cloud infrastructure data centers than all of our cloud infrastructure competitors combined. database. Most of the world’s most valuable data is stored in an Oracle database. All of those databases are moving to the cloud. Oracle’s cloud, Microsoft’s Azure cloud, Amazon’s cloud or Google’s cloud.

Oracle runs everywhere. The latest vector version of the Oracle database, Oracle 23AI is an AI data platform, the only database that can make all of the customers’ data immediately available to all of the popular AI large language models while maintaining complete data privacy for the customer. As use of AI increases, so will Oracle’s database market share. Oracle will be the largest and most profitable cloud applications company in the world. Oracle developed suites of integrated AI agent based applications for ERP, for EPM, supply chain, manufacturing, human resources and customer engagement, plus industry applications for healthcare, banking, utilities, retail, hospitality and many other industries.

We use the most modern application generators and AI database technology to build our application suite. And then we add AI analytics using OpenAI, XAI, Google, Lama, and other popular LLM on top of that application data. No other company is even attempting to build the depth and breadth of AI based application that we have already built. Oracle will build more cloud infrastructure data centers than all of our infrastructure competitors combined. All of our OCI data centers from the smallest low cost data center to the largest gigawatt AI training data center include all Oracle OCI capabilities.

A large percentage of those capabilities are autonomous, so labor costs are minimized and human error is dramatically reduced. Oracle is already prospering in this new era of cloud computing and AI and it’s just the beginning. Back to you, Safran.

Ken Bond, Head of Investor Relations, Oracle Corporation: Thank you, Larry. Before we go to the Q and A, just to repeat one number. FY 2025 cloud infrastructure revenue was up 51% to $10,200,000,000 for the year with consumption revenue up 59% from last year. Sarah, if you could please poll the audience for questions.

Sarah, Conference Operator: Thank you. Your question comes from Mark Moerdler with Bernstein. Your line is open.

Mark Moerdler, Analyst, Bernstein: Thank you very much for taking my question. Larry, Safra and the whole Oracle family, congratulations on the strong quarter and the strong year. You’ve been promising and are now starting to deliver extraordinary growth acceleration, something we’ve not seen at other very large software companies. Yet there’s a lack of understanding across the street of your AI business. Can you give us color or break out any numbers to help investors understand the durability and profitability of the AI business?

Thanks.

Larry Ellison, Chairman and Chief Technology Officer, Oracle Corporation: Okay. Well, the interesting thing is a lot of people are talking about that they have all the data. So these other companies say they have all the data, so they can do AI really well. They can build all these AI agents on top of all of that data. The only problem with that statement is they don’t have all the data we do.

We have most of the world’s valuable data. The vast majority of it is in an Oracle database. And the latest version of the Oracle database is an AI centric piece of technology, vector database called Oracle 23AI. So what it does, it allows it’s the key enabler for companies to use AI. Using AI I mean, the the current AI models are trained on the Internet, otherwise known as publicly available data.

Do you think JPMorgan Chase makes all of their internal data publicly available? Do you think those AI models train on JPMorgan Chase’s data? Companies want to be able to use AI models on top of their own data. That is essential. Oracle applications make the all of the data inside the Oracle applications available to AI AI models like Rock or ChatGPT or all by the way, all the rest of them from Google, from whomever, from, Meta, you know, Lama, all of us.

We have all of those LLMs are in our cloud or in the Oracle cloud. So this is our value proposition. Our database takes all of your data. Our applications take all of your application data and make that data available to the, you know, the the most popular AI models. Like, if if you like ChatGPT, you use ChatGPT.

If you like Grok, you use Grok. You use that in the Oracle Cloud. We are the key enabler for enterprises to use their own data and models. No one else is doing that.

Unnamed Speaker: That makes sense.

Larry Ellison, Chairman and Chief Technology Officer, Oracle Corporation: It’s a huge this is

John DiFucci, Analyst, Guggenheim: not a small a small point.

Larry Ellison, Chairman and Chief Technology Officer, Oracle Corporation: This is why our database business is going to grow dramatically. Think about it. You have to put all of your data into a database. So that database must be highly secure. It must be scalable.

It must be economical. It must be reliable seven days a week, twenty four hours a day. It has to be fault tolerant. It can never break. That’s how how Oracle got popular in the place.

But then it has to hold the data in a way that’s consumable by the AI models. In other words, the data has to be vectorized and searchable, by the AI AI models. And you use that data to train up those models on your data. Who else is doing that? Let me answer the question.

Nobody. Next question, please.

Sarah, Conference Operator: Thank you. The next question comes from John DiFucci with Guggenheim. Your line is open.

John DiFucci, Analyst, Guggenheim: Thank you. Hi, Larry and Safra. Safra, your quote in that press release that you repeated on this call about next year was I don’t know, pretty amazing and and a strongest statement as I’ve seen you make. And I’ve known you a long time. So putting that in print means a lot to me because I because I know it means a lot to you.

Can can you help us unpack that statement a bit? For instance, is Stargate part of the more than 70% growth you expect in IS in fiscal twenty six? And we don’t know the timing of Stargate or even your financial share. Like, know there’s big numbers out there, but not how much of it’s yours or you’re going to be involved. But is Stargate also in the RPO growth of more than 100% in fiscal twenty twenty six?

And any other color beyond Stargate to help us get our heads around those massive growth numbers for IS would be helpful.

Safra Katz, Chief Executive Officer, Oracle Corporation: Thanks, John. And, yeah, it we have known each other a very long time, longer than that, very good, Matt. So the the reality is that is that Stargate is still in formation. The work there are a lot of partnerships we are in the middle of right now that are all part of this enormous growth rate. We are the destination for everyone who wants AI workloads, who want database workloads, and want, want applications.

We are really, and all of that together comes in to to our RPO. We have so much in pipeline right now that, and, of course, we have so much in RPO, meaning those are noncancelable contracts, and we see the demand. I am still in a position where our supply is not meeting our demands. We actually currently are still waving off customers from, or scheduling them out into the future so that we have enough supply to meet demand. This is a situation that we have not seen, in our history, and, the numbers themselves are so enormous.

And the reason is because our technology is different. As Larry has said on previous calls, the cloud we built runs faster and has more capabilities than our competitors to and and that are built for enormous amounts of data. And so we are very much the destination of choice. As Stargate forms, that will contribute into all of this. But some of our our partners many of our partners, some of them will be in Stargate.

Some are outside of Stargate. We we really are working with many, many companies right now and have enormous pipeline as a result.

Larry Ellison, Chairman and Chief Technology Officer, Oracle Corporation: So Let let me give you a couple of I mean, let me chime in here also a little Let me surprise you with there are huge contracts that have nothing nothing to do with even AI AI. We got a gigantic contract, from TIMU that would have been unprecedented except for all the other gigantic contracts we’re also been getting. But TIMU is a very large company that’s growing extremely rapidly and they’re basically moving their infrastructure to the Oracle Cloud. That was a very big contract. We’re seeing huge growth in multi cloud from the data centers we’ve already built and the data I mean, if it’s revenue, obviously, centers we already built.

But the future the growth rate in multi cloud is astonishing. In other words, our database is now moving very rapidly to the cloud, I think because a few reasons because the database has now all these AI capabilities. But also, quite frankly, now people can get it in whatever cloud they want. If you’re dedicated to using Microsoft Azure, you can get the Oracle database and Microsoft Azure, the fully capable Oracle database and Microsoft Azure with all of our fanciest features, including the new AI features. You can get it at Google, you can get it at Amazon, you can get it at the Oracle Cloud.

It’s all the same in every place. And that’s given our customers a lot of comfort that Oracle is not only where they store all of their current data, but they want to keep using the Oracle database and expand their use of the Oracle database and move all of that data to the cloud as quickly as they can. And they’re now able to do it at the place the cloud of their choosing. So, the database business is growing rapidly. This next generation of companies like ByteDance, TikTok, which obviously we do business with them, T Moves and other.

Uber, there are just lots of these companies. A bunch of the security companies have moved to the Oracle Cloud. It’s growth coming from many, many different directions.

John DiFucci, Analyst, Guggenheim: So if I could just so Stargate is just part of it. There’s a lot of things happening here. But I just wanted just to clarify, it sounds like it’s part of RPO, but is it also part of that 70% in IS revenue growth too?

Larry Ellison, Chairman and Chief Technology Officer, Oracle Corporation: Well, I it’s okay.

Safra Katz, Chief Executive Officer, Oracle Corporation: Stargate is not formed yet, but some of our business with OpenAI, which is one of our partners in in in Stargate, is is is part of our future very much so. But Got it. Do you understand? We work with OpenAI. We’ve we were those are still small numbers in the scheme of everything else we’re doing, but it will ultimately be bigger.

John DiFucci, Analyst, Guggenheim: Got it. Thank you very much and good job.

Larry Ellison, Chairman and Chief Technology Officer, Oracle Corporation: Okay. Next question please. Let add one little thing. If Stargate turns out to be everything is advertised then we’ve understated our RPO growth.

Safra Katz, Chief Executive Officer, Oracle Corporation: Correct.

Sarah, Conference Operator: The next question comes from Ben Reisis with Melius Research. Line is open.

Ben Reisis, Analyst, Melius Research: Thanks, Safra, Larry. Great to be speaking with you today. Nice presentation. Your CapEx in the quarter was much higher than expected, I mean, 5,000,000,000 more than we expected to get to the 21,000,000,000 And now you’re thinking about it going to $25,000,000,000 Just wanted a little more color on what it was spent on? How is it helping you yield more revenue?

And how do you know 25 is the right number for this year? Larry, you usually have some pretty good color on architecture when you answer this question. So I’m looking forward to that as well.

Safra Katz, Chief Executive Officer, Oracle Corporation: Okay. So let me start and let Larry make it perfect. The the reality is that as as I mentioned on the call, our our CapEx is usually about equipment. We’re not a we we have building partners who charge us rent once they’ve finished constructing things. And when we all of a sudden have a higher CapEx, it means we are filling out data centers, and we are buying components to build our computers, which are different than other people’s, and we are putting them on the floor.

We we had an opportunity to to buy up and for deployment, and so we did. And we are putting out as much capacity as we possibly can as quickly as we can. I do believe that the 25,000,000,000 next year may turn out to be understated. So it is all to meet demand. We don’t order.

We don’t build unless we’ve got orders for for our capacity to be built out. And we have so much so much in orders right now that I actually expect I believe I said on the on the on the call over $25,000,000,000 this next quarter. And that is again to match demand.

Larry Ellison, Chairman and Chief Technology Officer, Oracle Corporation: Let me add, we recently got an order that said we’ll take all the capacity you have wherever it is. It could be in Europe, could be in Asia, we’ll just take everything. I mean, we never got an order like that before. We had to move things around. We did the best we could to give them the capacity they needed.

The demand is astronomical. Now we have to but we have to do this methodically. The demand continues to outstrip supply is we can only build these data centers, build these computers so fast. And we’re also doing a lot of engineering around high speed networking. You’ll see us making we are making large engineering investments to speed up the networking, the reliability of the networking and lower the cost of the networking.

So we’re doing a bunch of things we are doing a bunch of things to lower our CapEx costs. But even if we do that CapEx is going to go up because the demand right now seems almost insatiable. Mean, don’t know how to describe it. I’ve never seen anything remotely like this.

Ben Reisis, Analyst, Melius Research: Thanks a lot, Larry.

Larry Ellison, Chairman and Chief Technology Officer, Oracle Corporation: Mean, people are calling up and asking us, please, can you find us more capacity? We’ll take it wherever. Oh, Oh, it’s in Malaysia. We’ll take it there. Fine.

We’ll take it there. We got some wherever.

Ben Reisis, Analyst, Melius Research: Are you having any trouble getting GPUs?

Larry Ellison, Chairman and Chief Technology Officer, Oracle Corporation: No. No. Not right now. No.

Ben Reisis, Analyst, Melius Research: Got it. Thanks so much color guys. Appreciate it.

Larry Ellison, Chairman and Chief Technology Officer, Oracle Corporation: Next question please.

Sarah, Conference Operator: The next question comes from Siti Panigrahi with Mizuho. Your line is open.

Unnamed Speaker: Great. Thanks and congratulation on a strong Q4 and impressive guidance. I want to go back to the cloud database. Mainly, have massive database on prem. So what are what are you hearing from customer in terms of migrating to cloud?

Now you have multi cloud strategy. You have dedicated alloy customer. And, Safra, what’s your expectation on that cloud database revenue contribution or driving that 70% growth of OCI in as of fiscal twenty second?

Safra Katz, Chief Executive Officer, Oracle Corporation: Okay. Let me just start. So of all, the database business is really healthy, really growing. In fact, you even see it in the number that I think folks didn’t think was possible, which is in license. You should understand that when our customers are buying more licenses, that actually means often that they would wanna use the bring your own license pricing to go to the cloud.

So database support is up, is is solid, license is up, all the cloud metrics, autonomous consumption, Oracle Cloud, all of multi cloud is is basically using up all capacity that gets put out there. So the Oracle database is on fire, and it is only the beginning. I wanna remind you what a significant and large business it is, and the bulk of it is still on premise. As Larry said, now that you can have it in any of the clouds you like as with the at database, you know, at Oracle, in all of the in all the other clouds also beyond just OCI, or you can deploy it at CloudCustomer, another place where the the numbers are are enormous in growth rates. So consumption going way up, more licensing, more bookings, and and a lot of demand.

And and the database side of the world for all the reasons Larry said is the is is in just a superb business and extremely compelling, especially to the extent you wanna leverage artificial intelligence.

Larry Ellison, Chairman and Chief Technology Officer, Oracle Corporation: You asked for a number, an easy number to figure out. So let’s say 10% or $10,000,000,000 of our support revenue, our database support revenue moves to the cloud. That becomes at least $50,000,000,000 because it includes all the computers and all the networking and all of that. The support was just 20% of the licensee. So you move $10,000,000,000 of our database to the cloud, it becomes at least $50,000,000,000 in cloud revenue.

It’s almost as big as Oracle is now.

Unnamed Speaker: Yes. Okay. Thanks Larry and Safra.

Sarah, Conference Operator: The next question comes from Raimo Lenschow with Barclays. Your line is open.

John DiFucci, Analyst, Guggenheim: Thank you. Congrats from me as well. The one subject we haven’t really talked about was applications. But with all the excitement around OCI, like, I think you don’t get enough credit on applications. Can you talk a little bit about what’s going on there?

Because I had to go back in my model quite a bit to see 22% growth on Fusion, and the outlook looks really strong as well. And you talked about accelerating growth there. With all the worries about tariffs and stuff like that, I kind of I’m surprised to see kind of these very, very good numbers from you. Can you maybe talk about that a little bit? Thank you.

Safra Katz, Chief Executive Officer, Oracle Corporation: Sure. Tariffs have no impact really at all to play in this in this. What it does allow our customers to do is do what I do when I announce on day a year on day 11 is to be much more really much much better run and have a better idea of where their business is and how it’s doing and to do more and spend a lot less. What you’re seeing now, and it hasn’t been obvious in the numbers because as you know, we have our strategic SaaS products, and and we break that down for you in the release to some extent. And those are going gangbusters.

And we’ve had other things in the numbers that have made you not be able to really see. We have some nonstrategic products. And in addition, we’ve also had an advertising business, which we are now lapping. I stopped even mentioning it because, you know, what’s the difference? A few 100,000,000.

But the the reality is what you’re starting to see is our strategic SaaS product as they roll out in our customer sites and as they ramp up. They’re they’re very, popular. They’re obviously compelling because only if you’re in the cloud can you use the AI capabilities. See, many customers are still on on premise ERP products. Those can’t really use the the the advanced AgenTix and AI capabilities.

So if you wanna use that, and many do for automation and to do more spend less, you’ve gotta move to to Fusion or NetSuite. And those are just very, very compelling, and it’s just now starting to show through the noise.

Larry Ellison, Chairman and Chief Technology Officer, Oracle Corporation: Okay. Thank I would add. I I would let let me add one thing, which is companies don’t really enjoy buying applications from five different vendors and then making all of those applications work together. So some companies, not all, but some companies are saying, Oracle, you build these integrated suites of application and they are all AI agent based applications. So they’re modern applications, they’re modern cloud applications.

And but all of your applications are engineered to work with one another. So our ERP and EPM, supply chain manufacturing, human resources, customer engagement, all those apps are designed as a single suite of applications to run an enterprise or government agency. And all those pieces then work together. So there’s no cost of integrating those applications. So we’re seeing a lot of companies buying basically saying, I’m going to go all Oracle.

I’m going to buy the complete Oracle suite for ERP, EPM, supply chain manufacturing. A lot people don’t have manufacturing. Supply chain, human resources and customer engagement. They’re picking us if if they pick our our our back office applications, they’ll sometimes pick our front office applications over Salesforce as a as a result of that. And our customer engagement applications are getting better and better.

We continue to invest in those. And our intent is to give some of our biggest customers a one stop shop where they can buy the entire suite to run their enterprise from us. And that gets rid of a lot of headaches. Everything is in the same database. Everything comes with the same AI data platform with it.

All the analytics are there. Everything is there. You don’t have to do the system integration. You don’t have to fit by a bunch of pieces and make them work together. That has been our strategy for some time and that’s all coming together.

As a bunch of companies are not successfully navigating this difficult, admittedly difficult transition from on premise to the cloud. There have been a lot of companies that have not done it very well, and they’re casualties, and we’re picking up a lot of their users. So the application business is very, very promising. And then I add Oracle Health and Oracle Banking, Oracle Retail Hospitality, the different industries on top of that. There’s no other apps company that is trying to build such a broad based integrated suite of AI cloud application.

Who’s closest? There’s no one attempting to do what we’re doing. Makes sense. Thank you. Next question please.

Sarah, Conference Operator: Your final question comes from Brad Zelnick with Deutsche Bank. Your line is open.

Ben Reisis, Analyst, Melius Research: Great. Thank you very much and congrats. Safra, Larry, the things you’ve been telling us would happen are clearly happening and it’s amazing. As we go forward, Larry, Oracle has always had the advantage of being the only vendor with enterprise grade technology from apps all the way down to infrastructure. And since the Sunday is optimized even down to the silicon, why does the full stack nature of what you do remain important as we enter this new era of computing?

Larry Ellison, Chairman and Chief Technology Officer, Oracle Corporation: Well, such an interesting question because I think to some degree, people thought our biggest weakness is that we were just spread too thin. We’re trying to do infrastructure I mean database initially, infrastructure and then applications on top of that infrastructure. But what made our database so good? I can argue there we made some good technology decisions. But the other thing that made our database so good is we had we developed apps on top of our own database.

In the same company, you have people using the database to develop applications and the people who are developing that database. And if the applications found features missing from the database, they found capabilities they wish were in the database that would make their applications better, more reliable, more secure. We gained those insights by building those application. Building applications allowed us to understand how to build database better. Building great databases made it much easier to build the cloud.

There are a lot of databases that run the cloud. There’s a database of our users, All of our resources are in databases. So the Autonomous Database, the Oracle Autonomous Database is one of the reasons our cloud at some point, we’re going to rechristen our cloud from Gen two cloud to the Autonomous Cloud. Right now, that would be too aggressive. We’re not fully autonomous, but we’re getting there.

And because we were able to use a lot of our existing database technology, specifically the autonomous database technology, to make our cloud more scalable, more reliable. And by the way, when you eliminate human labor, when you have an autonomous database, you eliminate human labor, you save money, but you also eliminate human error and human mischief. So it makes your cloud much more secure. One of the reasons our cloud is more secure, one of the reasons our cloud is faster, is because we have an autonomous database that runs it. So having all of these levels of technology allows us to solve a technical problem at the right layer of the technology.

Should we solve the problem in the network fabric? Should we solve the problem with our cloud computer controller? Something we have with other people that we’ve embedded different hardware to run the run the cloud. We added we have different hardware architecture to make it more secure and more and more reliable. So we’ve done innovation in the network.

We’ve done innovation in our host computing. We have a non an autonomous nonstop Linux operating system that we build, the autonomous database that manages all the data in the cloud and so on. Being able to solve problems at different layers of the technology, understanding the different layers of the technology allows us to build an integrated solution that is faster, cheaper, more reliable than what our competitors can do.

Ben Reisis, Analyst, Melius Research: Awesome. Thank you.

Ken Bond, Head of Investor Relations, Oracle Corporation: Thank you, Larry, Benskin and Brad. A telephonic replay of this conference call will be available for twenty four hours on our Investor Relations website. Thank you for joining us today. With that, I’ll turn the call back to Sarah for closing.

Sarah, Conference Operator: Thank you. This concludes today’s conference. Thank you for joining. You may now disconnect.

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