Q1 2023 Oracle Corp Earnings Call
One we.
We had an excellent quarter with total revenue growing 23% in constant currency and beating the high end of our guidance. We also had a great organic quarter with total revenue growing 8% in constant currency. This was on top of a fantastic Q4.
Last quarter and as you can see from the numbers, we continue to get excellent returns on the investments we've been making over the last few years in products infrastructure and our sales organization, we are seeing company specific and product specific momentum.
We continue to expect organic revenue growth in our cloud business will accelerate substantially in FY 'twenty three.
The currency headwind this quarter was much higher than the 3% of headwind that was present when we gave guidance was actually six point, even though due to rounding it may look like 5%.
And that's a currency headwind to total revenue it wasn't fast six points and yet we still exceeded our forecast on a reported basis and we beat our constant currency revenue forecast by $200 million.
We saw similar currency headwinds in E. P S.
<unk>, which had an eight cents negative effect much worse than the 5% headwinds present at the time of guidance in June .
It's because of the significant and volatile swings in currencies that I always discuss our results using constant currency growth rate and so that you have a clear view of the business as we manage it.
Now to the numbers and there's a lot here I'm going to go over the revenue results, including Cerner and then some of the results excluding Cerner, which many of you are focused on.
Hope you are pleased with our expanded disclosure this year.
So total cloud revenue, that's fast and I am including Cerner with $3 6 billion up 45% in USD and up 50% in constant currency with I S revenue, a smidge under 900 million and SaaS revenue.
At $2 7 billion.
Total cloud services and license support revenue for the quarter was $8 4 billion up 20% in constant currency, driven again by fusion autonomous database and our Gen. Two OCI.
Applications subscription revenues, which includes support more 4 billion up 37% in constant currency again Q1 cloud application revenue. That's fast was $2 7 billion up 43% in USD.
Up 48% in constant currency.
Infrastructure subscription revenues, including support were $4 4 billion up 7% in constant currency and to be clear, that's actually 7% organic growth with no contribution from Cerner.
Q1 cloud infrastructure or Ies revenue was <unk> 9 billion up 52% in USD up 58% in constant currency again with no contribution from Cerner now the revenue results. Excluding Cerner total cloud revenue that's I S.
Plus staff, excluding Cerner was up 29% in constant currency at $3 1 billion.
Organic revenue growth for both I S and SaaS was significantly higher than last quarter.
Application subscription revenues, excluding cerner, we're up 12% in constant currency.
Our strategic back office cloud applications now have annualized revenue of $5 8 billion and grew 33% in constant currency, including fusion ERP, which was up 38%.
Net suite, ERP up 30% and fusion HCM up 26%.
That means that the SaaS revenues, excluding cerner were $2 2 billion up 20%.
Infrastructure Cloud service revenue was up 58% in constant currency.
Excluding legacy hosting services.
Infrastructure cloud services grew 70% with an annualized revenue of $3 2 billion, including OCI consumption revenue, which was up 103%.
Cloud at customer consumption revenue, which was up 92%.
And autonomous database, which was up 56%.
And it's not only that our growth rates are higher than our hyperscale competitors, maybe you would expect that because where the newest and thus the smallest but our growth rates are increasing as we get bigger.
Our second generation cloud launched after our competitors first generation cloud and so we've been able to architect it more performance more securely and more sustainably.
As a result as more companies test dark cloud they discover how much better it is on price security.
Performance and sustainability. In addition, we now have cloud regions in more countries and cities than AWS, and Azure, giving our customers more choices for their sovereign data and finally, many of our customers appreciate.
How flexible our service and business model is.
All of this is amazing our customers and.
Can't wait to share the stage with some of them had Oracle cloud world.
In October .
Now to license revenues, including Cerner, where $904 million up 19% in constant currency led by database options and Joppa total database revenues were up 3% in constant currency.
So all in <unk>.
Total revenues for the quarter were $11 4 billion up 23% in constant currency.
Excluding cerner revenue of $1 4 billion organic revenue was up 8% in constant currency.
In addition.
I want to point out that since we no longer operate in Russia. This negatively affected revenue by over one point of growth had we still had we not had we not left actually our growth rate would be over 9% this quarter.
Operating expenses were up 34%, mainly due to adding in <unk> expenses and the mix of our business.
The gross margin for cloud services and license support was 81% and the associated gross profit dollars grew 15% with Cerner and 7% excluding cerner.
In fact, the gross margin percentage on Ias increased dramatically in the quarter.
non-GAAP operating income was $4 5 billion up 10% from last year and I expect that we will see strong operating income growth again in Q2.
The operating margin, including Cerner was 39%, which is lower than in the past since we only just began to integrate cerner in the quarter.
We drive Cerner and its profitability to Oracle standards and continue to benefit from economies of scale in the cloud we will not only continue to grow margin dollars, but also grow margin percentages significantly.
The non-GAAP tax rate for the quarter was $19 four slightly above the guidance rate and non-GAAP EPS was $1 three in U S dollars.
Unchanged in USD and up 8% in constant currency GAAP EPS was <unk> 56 cents in U S dollars down 34% in U S.
And down 26% in constant currency, that's our GAAP EPS.
Over the last four quarters operating cash flow was $10 5 billion and free cash flow was $5 4 billion with capital expenditures of $5 2 billion for the quarter operating cash flow was $6 4 billion and free cash flow was $4 7 billion.
With capital expenditures of $1 7 billion.
At quarter end, we had $11 2 billion in cash and marketable securities and the short term deferred revenue balance was $10 5 billion up 11% in constant currency.
The remaining performance obligation or our P. O balance is 16 7 billion up 62% in constant currency due to strong bookings as well as the addition of Cerner. However, I would note for you all that the origin.
Ganic RP O growth accelerated to 22% in Q1 from 17% in Q4.
Approximately 49% of total RPM is expected to be recognized as revenue over the next 12 months.
As we've said before we're committed to returning value to our shareholders through technical innovation strategic acquisitions stock repurchases and prudent use of debt and our dividend. This quarter, we repurchased seven 5 million shares for a total of 559 million.
<unk>.
In addition, we paid out dividends of $3 4 billion over the last 12 months and the board of directors today declared a quarterly dividend of 32 cents per share.
Our fundamental principle is to grow non-GAAP EPS, while substantially increasing cloud revenue and given our increasing confidence we will continue to prudently invest as there is strong demand for our cloud services.
Now, let me turn to my guidance for Q2, which I'll provide on a non-GAAP basis now we are assuming the currency exchange rates remain the same as they are now that's not a prediction that's just giving it to you as a translation as it currently is.
In that case currency should have a 5% to 6% negative effect on total revenue and at least a seven cent negative effect on EPS in Q2.
As I say every quarter, the actual currency impact may be different by quarter end.
My EPS guidance for Q2 assumes a tax rate of 25, which is up from $19 two last year.
However, one time tax events could cause actual tax rates for any given quarter to vary.
So now to guidance total revenues for Q2, including Cerner are expected to grow from 21% to 23% in constant currency and are expected to grow from 15% to 17% in USD.
Total cloud growth again, including Cerner is expected to grow from 46% to 50% in constant currency.
42% to 46% in USD.
I expect the total cloud growth for the fiscal year, excluding cerner will be above 30% in constant currency.
non-GAAP EPS growth is expected to grow between 1% to 5% and be between $1 23, and $1 27 in constant currency again due to currency headwind non-GAAP EPS is expected to decline, 1% to 5% and be between $1 six.
<unk> and $1 20, and USD as I've said before Cerner will be accretive to earnings this year, including in Q2.
And with that I turn it over to Larry for his comments.
Thank you Sabra.
Last quarter, Microsoft and Oracle announced.
We have built a high speed interconnects.
This created Microsoft's Azure cloud and the Oracle cloud.
The purpose of this multi cloud interconnect.
This will enable an azure azure customers to directly use the very latest Oracle database technology.
Even as our application is running in Azure.
In other words.
Customers can now use any combination of Microsoft and Oracle cloud services.
The other <unk>.
They were in one cloud.
That was last quarter.
This quarter Oracle's, making the latest version of our March most people Heatwave database.
Available and are Muslims AWS cloud.
Multiple published customer benchmarks.
Joan that my sequel Heatwave.
Delivered seven times better performance than Amazon redshift.
10 times better performance with Snowflake.
Up to 10 times higher throughput than Amazon's owned by sequel database called Aurora.
The multi cloud era has begun.
Customers are already buying applications and cloud infrastructure.
Several different providers, including Microsoft Amazon.
<unk> Four's Oracle and others.
Our job is to give our customers the ability to choose.
Alcohol Acacia in infrastructure technology from multiple clouds.
And then how does different clouds co exist and inter operate gratefully.
Multi cloud interoperability is an important step in the evolution of cloud computing.
Multi cloud inter Operability is one of the reasons our infrastructure business.
Amen.
Growing over 50% in U S dollars and almost 60%.
<unk>.
We expect Oracle's total cloud business too.
To exceed $20 billion annual run rate.
Next year.
Now I'll highlight some of our big new infrastructure wins in Q1.
Overall, we added about 1000, new paying customers for infrastructure in Q1.
Let's start off with Nvidia.
And video chose OCI to builders <unk> products for data scientists for machine learning and in Princeton, along with moving their entire healthcare platform called Clara.
Dr.
Mosaic.
<unk> developed a state of the art.
<unk> network.
Okay.
<unk> <unk>.
Outperform all of the other clouds.
When running machine learning.
Okay.
The Adas.
Car rental company is moving their entire Oracle state along with their Oracle applications to LCR.
The Chicago public schools are closing data centers and migrating their oracle state to the Oracle cloud.
Okay.
<unk> cyber security chose Oracle cloud infrastructure to help safeguard their customers with industry, leading security OCI deployment will be a part of its multi cloud strategy and delivering SaaS platform.
<unk> as a service.
Sigma.
Health care.
As a company.
It's migrating their existing exited data on premise to the Oracle cloud.
Additionally, there.
ERP system is being integrated with Oracle cloud digital assistant.
Tennessee, and Oklahoma are both new government cloud customers. This was the first group of customers, where all from North America I. Just finished my list beginning with.
In video in North America in Tennessee, and Oklahoma and North America.
Now going to move to win.
<unk>.
AT&T Mexico.
As the first case of any telco to move their entire.
Docs back to our cloud and they're moving it.
They're amdocs that OTI is new Mexico cloud region.
<unk> got one of the largest airlines in Latin America will move all of their workloads.
Hi, Ben.
Intel and other telecom I've got the largest telecom in Chile is now moving all of their critical workloads from AWS.
OCR.
Brian did you plus.
Fintech Bank in Brazil is moving their entire on premises Vmware.
So Ron and OTR, 100%.
Surace experience.
Financial services company is moving AI training for OCR, OCR, OCR biometric facial recognition to OCI.
So another.
So tech company.
And the health care business, serving 1500.
15000 hospitals and clinics.
Migrating their data Lake.
And their data warehouses from Amazon Web services.
Hi.
Santander a large bank.
It is.
Moving.
All of their all of their.
Databases from mainframes and Oracle databases, all to the Oracle exit data cloud service.
Unit.
Also a health care company Health care insurance company is beginning the migration of all of their applications and database OCR.
Mexico.
The largest satellite pay TV producer in Mexico, we'll move all of their data lakes and all of their data.
Data warehouses.
The new Mexico region.
Latin America.
And Jay packs and maybe this is the most interesting customer I'll talk about <unk>.
<unk>.
<unk> research.
<unk>.
It is continuously expanding their dedicated cloud region.
In Japan, they've just added a second data center.
And all I have.
The Oracle cloud in Japan, the NRI Oracle cloud in Japan already run.
50% of all transactions on the Tokyo stock exchange.
That's a mission critical application.
ICI Bank financial services.
The new customer.
Hey, Jay pack.
Japan Asia Pacific Hitachi construction in Japan.
<unk> is moving their manufacturing their critical manufacturing systems.
OCI.
Bad timing technology, and biotech company as a new customer.
Asia Pacific.
Thank you.
As the first big pharma in Japan that is moving their database.
Database workloads to.
To the cloud.
<unk> International lines, the Big truck transportation companies, the new customer in Asia Pac Li <unk> Fung, a trading company another new customer.
Essentially a thousand new customers.
This quarter in.
In OCI.
Another fintech companies again, another big new customer for us.
In Asia Pacific <unk> retailing.
Is moving their entire Vmware on premise Vmware estate.
To OTI Theyre, one of the largest retailers in Japan.
Again Asian development Bank that the new customer in Asia Pac and Joe Vision is and Infotech company new customer.
We have again, a bunch of new customers in OCI.
All over the world.
That's J back no now let me move to EMEA.
Joe Joe.
Financial services company.
Jos Oracle cloud infrastructure for their payment platform.
Is there a benchmark shows the Oracle cloud OCR.
Is more secure and better availability than the competition.
<unk> bank the world's largest Islamic bank is in the process of moving all of its applications.
Databases to the Oracle cloud unit labor.
Is integrating a few or their oracle fusion applications with the autonomous database to build our next generation Super secure Super agile platform for Unilever.
Atlantic Financial group and <unk> company.
Host core banking functions on the Oracle cloud infrastructure.
Which to many of their banking customers.
Centric co company.
Company is moving all of their workloads from there from their own data centers to a combination of OCI using OCI multi cloud services to access other clouds.
<unk>.
Big telephone company moving over 300, Oracle databases to the Oracle exited data cloud.
North tipping government agency and migrating all databases.
They're IBM mainframes and.
Unix systems too.
To the Oracle database and to the Oracle cloud and I'll close with the UK home office the Department is moving.
To the Oracle Gen two cloud infrastructure with a focus on dramatically improving both security and reliability with that I'll turn it back over to Safra.
Thank you Larry Josh if you could go ahead and queue up the audience for questions.
At this time, if you would like to ask a question. Please press star followed by the number one on your telephone keypad.
Your first question comes from John <unk> with Guggenheim. Your line is open.
Thank you.
Hi, Safra Larry.
Little surprised to see your strong results here when when most software companies.
Other than some of the pure security names really faltered some against the macro backdrop.
You just didn't hear but because I want to focus the question on one area that we've got the most questions on since we launched coverage and that's an organic constant currency cloud services growth. It looks like you came in above the high end of your guidance for the quarter and you reiterated that you expect greater than 30% growth for the year, which does.
<unk> seem like a stretch like it did when you gave that that first.
We understand the way a subscription model works, but we obviously don't see everything that you see can you give us some more color around what's driving the results this quarter and what gave you the confidence in this outlook for cloud services.
It previously contracted revenue, that's just starting to ramp up with an expected increase in consumption or something else or all of the above.
So let me tell you. It is all of the above but let me tell you, what's really happening down at each customer level when customers try us for some reason, whether they're using fusion and they start using OCI for their own applications or they.
It here really from word of mouth and from really a need to run some of their oracle workloads or otherwise when they give a try to gen. Two OCI or diffusion for that matter what they find is that it is phenomenal.
Gen. Two cloud is so much better than what they're used to and is so much more flexible and can be much more local give some so many more so many more opportunities to really match to their own needs, but they are overwhelmed by the.
The technical capabilities of our cloud and how great. It is so what happens is they may start small and then they accelerate in their consumption and they.
They sign larger and larger and more significant contracts as you see in our RP Oh, there is a lot already contracted and thats without adding a single additional customer or expanding the use but we have as I said so much.
Company specific or product specific momentum that as customers discover us use us give us a chance they become honestly overwhelmed by our capabilities and and how much less expensive more flexible more secure and how differently where are.
Architected such that we're also more sustainable for them and so it's a it's just incredible company specific product specific momentum and nothing really has to happen for us to continue to do very very well here and whether they are trying to say.
<unk> costs or expand growth, we help them do that in an incredibly flexible way and.
Super Super cost competitively before them.
Yes, let me just add.
One sentence to that.
We are the only infrastructure company that builds enterprise scale applications.
As a result of building this enterprise scale applications, we have made our infrastructure are much much better.
So we not only provide infrastructure and sell infrastructure, we consume the infrastructure ourselves.
I think that gives us.
Certain insights as.
As to what we need to build at the infrastructure layer to make our application secure reliable and so on.
And an easy to use and make make people may make people productive.
That's why.
That's why the custom.
Customers are discovering when they come to our cloud.
That there are more productive.
The system runs faster, it's more secure it's easier to use all of that and Thats what gives us confidence that we can build the next generation of health care application because we do both we do both applications enterprise applications and infrastructure and we are the only one.
So it sounds like that to.
The expansion within your customer base of cloud services is becoming or has become more predictable and that makes that makes a lot of sense. Thank you.
Okay, great. Thank you John next question. Please.
Okay.
Your next question comes from the line of Phil Winslow with Credit Suisse. Your line is open.
Hey, guys. Thanks for taking my question Congrats on another strong quarter of organic growth now, obviously oracle has been delivering accelerant growth as infrastructure and database because for multiple quarters now.
Could you give us some more color on just what the drivers are behind this and how sustainable they are b B Y O L database add ons autonomous database et cetera.
And then a question for Larry obviously, the expanded partnership with Azure announcer July's receipts on pretty Universal positive feedback and you just announced today that oracle's musical heat wave will be available on AWS. How do you think about these multi cloud partnerships impacting the already positive existing momentum and your database business going forward.
Larry Why don't you go first and then I'll fill in if I missed any.
Okay boss I'll do that.
Well again.
Again, multiple I think one of the issues I know a lot of people three years have been concerned.
And Oracle sustain its leading market share in the database business and I think.
I think what is clear is that if our databases are available in multiple clouds. I think then the answer is clearly yes. If our database is not available in multiple clouds. Ben It's an interesting question, whether we can maintain adjusted our own cloud, we've decided to make our best and greatest technology available in <unk>.
Multiple clouds.
And that gives customers choice they can use it in OCI.
They can use my sequel heat wave it at AWS.
They have choices, but they will be able to choose between let's say Amazon Aurora Oracle's <unk>.
Sequel, heat wave that we'll be able to choose between snowflake or the Oracle autonomous database and I think as long as were available in multiple clouds, we're going to be very strong very very and very very competitive against these other companies that these other technologies.
Any answering for you on healthy Oracle database doing well you saw we had an amazing Q4 and in Q1 again, the Oracle database is what people choose if they have real work to do it's very secure it's very perform.
And they know it has so many capabilities that you don't have to have 16 different databases to get a complicated job done you can do everything with it in different ways and the database options continue to be acquired many more customers still want enterprise.
Agreements so they can be <unk> bring your own license to the Oracle cloud our technology remains unbelievably strong with Java and so the business overall, our tech business remains incredibly strong even though it's enormous and.
And for many many of the reasons I think there was a period of few years back where folks were thinking they would try lots of other things and things that were maybe more quote fashionable I think they've realized that actually getting your job done securely perform at Lee sustainably and also.
No.
Really least expensive is to actually use our products to do that and so they've been doubling down in committing.
And bringing those workloads to the Oracle cloud again.
Palling, just incredible momentum, whether it's cloud at customer.
Dedicated regions or a public cloud.
Thanks, Bill next question please.
Your next question comes from the line of Mark <unk> with Bernstein Research. Your line is open.
Thank you very much for taking the question and congratulations on the strong quarter.
Larry Safra, historically, an increasingly difficult economic conditions organization's focused on what drove revenue growth or immediate savings and thus products like salesforce automation with similar areas receive funding will back office projects were delayed what is different this time, both from a ERP point of.
View and an HCM point of view.
What's going to drive the sustained growth and strength that you are expecting in Oracle strategic back office. Thank you.
Sure. So let me let me start by since I'm also the principle financial officer, if I would say that in another company I'd be the one making the decision to buy fusion ERP and fusion HCM and what is absolutely clear is that saving money in the back office is.
Basically automatic when you use our products when you move from.
Especially from our competitors' products, which are so expensive to maintain and to run when you move to fusion you can save so much in your back office that you can use that money to invest in things that help you extend the differentiation of.
Your business now today's the 12th of September in fact, I signed off with our auditors on Friday, but we don't do our earnings on Friday. So we had to wait all the way till Monday no no. Other companies report on the ninth or the eighth day in fact most companies.
We are reporting their July quarter.
Uh huh.
Last week and here, we are announcing in August quarter, well why does that have to do with costs well I can tell you that when you are in a position to know your results and to announce them and to file file your earnings with the Securities and Exchange Commission, you've not only save time.
You've saved millions in process dollars and in the way you run your business and I just wanted to point out that we were able to do this after acquiring <unk> in the quarter Cerner bi.
By putting their data from their old system into into fusion and consolidating it infusion. So we actually believe that one of the most important ways to drive business transformation is to move to a much more streamlined cloud.
<unk> been running old back office systems.
Okay.
Let me, let me just add one on one.
Sorry, let me add one thing which is SAP.
<unk> addressed the issue of.
Modernizing back office to save money.
I can tell you another way you can save money, we I personally I have been talking to.
Some of Amazon.
All statements brands that are running at AWS.
And the AWS Bill is getting very large.
And they can save a huge amount of money by moving to OCI.
And we expect next quarter will be announcing some brands some companies moving off of Amazon to OCI that will shock you.
I'll stop there.
Amazing.
Thank you Mark next question please.
Your next question comes from Derrick Wood with Cowen <unk> Company. Your line is open.
Oh, great, Thanks, and I'll Echo my congratulations.
Larry Thanks for all the color on the OCI wins.
I was hoping to get an update on your go to market strategy for OCI, but it's clearly becoming a more critical growth driver for you guys is there a dedicated sales force are you doing more bundling of OCI with other offerings.
Just hoping to get an update on how youre going to market and what kind of resources, you're putting around OCI because.
58% growth. It certainly seems like you are now gaining share in the cloud infrastructure market and it's a big market to go after.
So any color on that would be helpful.
Alright.
Got it.
No no no no no no no.
Oh, okay. Okay.
So.
One of the enormous changes we made.
In the past year or so year, you were a year or two is that we have invested in a lot more engineering talent in the field to help our customers bring over workloads and once we've shown them how to do it and the enormous.
Ms benefit they get by doing it. This is the ultimate sales accelerator because there is nothing like the customer realizes that our solution is just so much better and so much less expensive for them and you have to do that often by let's say prime.
<unk> the pump by sending.
Engineers field engineers, who can help the customers move those workloads and that's really propelled what's been going on in our in our OCI cloud Larry you go ahead.
Yes.
I think.
Exactly what Safra said and I'll add one.
Repeat what I've said earlier.
The amount of money.
Huge companies.
Very famous companies.
<unk> spend with Amazon.
It's kind of staggering I mean, everyone assumes hey, I move to the cloud and they save a lot of money.
Depends which cloud you move too.
And Oracle is much less expensive.
And then the competition.
Partially because we are faster.
And time is money when you when you are paying by the hour.
So again I'm going to repeat we're talking to the most famous brands that are running at Amazon.
And some of them are going to be moving very soon.
Yeah.
Exciting thank you okay.
Thanks, Eric next question please.
Your next question comes from Brad Zelnick with Deutsche Bank. Your line is open.
Excellent. Thank you and congrats on the solid execution.
Larry we've heard of some very exciting things happening with Cerner pretty quickly. After the deal just closed with some hospital networks, we heard from significantly expanding their existing contracts can you talk about the unique value you're able to deliver now that cerner is a part of Oracle and the broader expansion opportunity that you see ahead.
If I could just sneak in one for you as well Safra $1 7 billion in Capex in Q1 is a pretty big number and I know very well that you don't spend frivolously, what can you tell us about the big step up here.
Yeah.
Okay.
I'll go first I'll, let safra, but with $1 seven Capex is theres just so much demand.
<unk> mentioned, we have more data centers.
And more and more countries and in more cities than either Amazon or AWS and we're expanding because the demand is there we expect to be growing in that 50% range.
For our cloud services and that means we're going to be have to be we're going to have to be adding a lot of data center capacity and opening a lot of new data centers and we're doing that the fact that we're running.
Or.
And Oracle.
<unk> data centers running half of Tokyo stock exchange.
It's the other cloud vendors, how many stock exchanges they run.
Our stuff is very secure it's very reliable very performance its very very cost effective and therefore, we have huge opportunity there we're spending the money to expand.
We.
We have a huge opportunity for growth and we're not going to miss it.
But we're still going to be as you know safra is very cautious we're very we're always very cautious we pay a lot of attention to profitability, but we but we also have to pay attention to the top line as well as the bottom line and take advantage of this growth this growth opportunity.
And I think there was.
The second part of the question that made very fair answer.
He asked you all that big.
A big a big under part.
One of the things I think thats.
Don't really talk about that I alluded to the fact that we both build apt.
<unk> locations and we run them with on our infrastructure.
The tools, we use for building applications, our latest generation of tools or the autonomous database very different from all of the Oracle databases or any other database that came before there are no dba's.
There is no there is no human labor associated with running the Oracle database anymore. So there can be no human error the costs are so much cheaper.
Our own internal cloud our own cloud OCI uses of autonomous database to run all the control systems.
Does claim mcguirk doesn't want to hire a lot of DBA is at the lower cost also we didn't want any have any areas of the commission it's much more reliable.
And when you have human beings driving the car.
We use that for the next generation of Cerner. The Oracle Autonomous database, we pair that with an all new application development tool called apex, which is a low code tool.
So our newest applications are very newest applications that we were built we're building we're building in the autonomous database with apex, which allows us to do stuff that would have taken three or four years and less than a year. So we expect to have our first.
Pretty complete new Cerner health management product out within 12 months, which I think is going to again.
It's something we never could have done with the previous generation of databases or the previous generation of application development tools, but all of that has changed we have.
Phenomenal low code tools.
One of the things about the Loco tool is you almost you don't have to do security audits because security is built into the tool you can't build in secure applications.
Using using apex.
Fault tolerance is built into the tool.
If the application should fail.
It's a stateless applications. So it immediately fail over into another data center in a millisecond and keep running no one will even know about the failure. So our new generation of application development tools is going to enable us to modernize the server the <unk>.
Cerner techs.
<unk> technology.
At a rate that would be inconceivable, a couple of years ago.
Okay.
Amazing Thank you.
Thank you Brad that does appear to be our last question. So a telephonic replay of this conference call will be available for 24 hours on our Investor Relations website. Thank you for joining us today and with that I'll turn the call back to Josh for closing.
This does conclude today's conference call. Thank you very much for joining you may now disconnect.