Q4 2024 Oracle Corp Earnings Call

Good day, everyone and welcome to Oracle's fourth quarter 'twenty 'twenty four earnings call. Today's call is being recorded and now I would like to turn the conference over to you.

Operator: Good day everyone, and welcome to Oracle's fourth quarter 2024 earnings call. Today's call is being recorded, and now I would like to turn the conference over to Ken Bond. Please go ahead.

Unknown Executive: Today, everyone, and welcome to Oracle's fourth quarter 2024 earnings call.

Unknown Executive: Today's call is being recorded, and now I would like to turn the conference over to Trent Bond.

Bond: Bond. Please go ahead.

Ken Bond: Thank you, Krista. Good afternoon, everyone, and welcome to Oracle's fourth quarter and fiscal year 2024 earnings conference call. A copy of the press release and financial tables, which includes a gap to non-gap 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 the Investor Relations website.

Bond: Thank you Krista good afternoon, everyone and welcome to Oracle's fourth quarter and fiscal year 2024 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.

Ken Bond: Thank you, Krista. Good afternoon, everyone, and welcome to Oracle's fourth quarter and fiscal year 2024 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 the Investor Relations website. On the call today are Chairman and Chief Technology Officer Larry Ellison and Chief Executive Officer Safra Catz.

Bond: Additionally, analyst of many customers, who purchased Oracle cloud services or went live on Oracle cloud recently, we will be available from the Investor Relations website on.

Ken Bond: On the call today, our 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 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-K 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.

Speaker Change: On the call today are chairman and Chief Technology Officer, Larry Ellison, and Chief Executive Officer Safra cash 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 fab.

Ken Bond: 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 those 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-K and 10-Q reports 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.

Speaker Change: <unk> 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 statements being made today as a result, we caution you against placing undue reliance on these forward looking statements and we encourage you.

Speaker Change: To review, our most recent reports, including our 10-K 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're not obligating ourselves to revise our results or these forward looking statements in light of new information or future.

Ken Bond: And finally, we are not obligating ourselves to revise our results or these forward-looking statements in light of new information or future events.

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

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

Ken Bond: 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'll begin with a few prepared remarks, and with that, I'd like to turn the call over to Safra.

Safra Ada Catz: Thanks Ken, and good afternoon everyone. Clearly, we had an absolutely incredible quarter. As you know, Oracle's Q4 is known for customers purchasing large software license contracts to power their businesses. But because of the pivot to the cloud, this Q4 was powered by the enormous demand for our cloud services, and it showed up in RPO, or remaining performance obligation.

Safra Catz: Thanks, Ken, and good afternoon, everyone. Clearly, we had an absolutely incredible quarter. As you know, Oracle's Q4 is known for customers purchasing large software license contracts to power their businesses, but because of the pivot to the cloud, this Q4 was powered by the enormous demand for our cloud services. And they showed up in RPO or Remaining Performance Obligations. In Q4, Oracle signed the largest sales contract in our history, led by huge demand for training large language models, as well as record levels of sales for OCI, Autonomous, Fusion, and Next week. RPO was $98 billion, up $18 billion from Q3 and up 44% year over year from $68 billion last year.

Thanks, Ken and good afternoon, everyone. Clearly, we had an absolutely incredible quarter as you know Oracle's Q4 is known for customers purchasing a large software license contract to power their businesses, so because of the pivot to the <unk>.

Speaker Change: Plateaued.

Speaker Change: Q4 was powered by the enormous demand for our cloud services and they showed up in RP O or remaining performance obligations.

Safra Ada Catz: In Q4, Oracle signed the largest sales contract in our history, led by huge demand for training large language models as well as record levels of sales for OCI, Autonomous, Fusion, and NetSuite. RPO was $98 billion, up $18 billion from Q3 and up 44% year-over-year from $68 billion last year. And we are trading one-time non-recurring license revenue in return for much bigger strategic customer commitments for multi-year cloud revenue, from which we expect to further accelerate our revenue growth rate.

Speaker Change: In Q4.

Speaker Change: Oracle signed the largest sales contract in our history led by huge demand for training large language models as well as record levels of sales for OCI autonomous fusion and Netsuite.

Speaker Change: Our PEO with $98 billion up 18 billion from Q3.

Speaker Change: 44% year over year from 68 billion.

Speaker Change: Sure.

Safra Catz: And we are trading one-time non-recurring license revenue in return for much bigger strategic customer commitment for multi-year cloud revenue from which we expect to further accelerate our revenue growth.

Speaker Change: And we are trading one time non recurring license revenue in returns for much bigger strategic customer commitments for multi year cloud revenue from.

Speaker Change: From which we expect to further accelerate our revenue growth rate.

Safra Catz: Awards Rates. This is exactly what we've been targeted, and it bolsters my confidence that our overall revenue, earnings, and cash flow performance, as well as our growth rates, will only get stronger and accelerate. In short, this Q4 marks the full emergence of our high-growth cloud businesses. Now, I started talking about this tipping point four years ago, and you've seen it continue to play out in our results since then. As a reminder, we accelerated our US dollar revenue growth rate from negative one in fiscal year 20 to plus eight this past year if you exclude Sooner.

Safra Ada Catz: This is exactly what we've been targeting, and it bolsters my confidence that our overall revenue, earnings, and cash flow performance, as well as our growth rates, will only get stronger and accelerate. In short, this Q4 marks the full emergence of our high-growth cloud business. Now, I started talking about this tipping point four years ago, and you've seen it continue to play out in our results since then.

Speaker Change: This is exactly what we've been targeting and it bolsters my confidence that our overall revenue earnings and cash flow performance.

Speaker Change: Well as our growth rates will only get stronger and salary.

Speaker Change: In short this Q4 marks the full emergence of our high growth cloud businesses.

Speaker Change: Now I started talking about this tipping 0.4 years ago, and you've seen us continue to play out in our results since then.

Speaker Change: As a reminder, we.

Safra Ada Catz: As a reminder, we accelerated our U.S. dollar revenue growth rate, from negative one in fiscal year 20 to plus eight this past year if you exclude Cerner. In addition, EPS has grown at a 10% compounded annual growth rate over that same period. And both operating cash flow and free cash flow, which, of course, we report on a trailing 12 month basis, were each declining 10% four years ago.

Speaker Change: We accelerated our U S dollar revenue growth rate from negative one.

Speaker Change: In fiscal year 'twenty.

To plus eight this past year, if you exclude serna.

Safra Catz: In addition, EPS has grown at a 10 percent compounded annual growth rate over that same period. And both operating cash flow and free cash flow, which of course we report on a trailing 12 months basis, were each declining 10 percent four years ago. This year, they grew 9 percent and 39 percent, respectively. Now, customer conversations are now absolutely fully focused on our cloud services, as the results clearly show. So let me give you just a couple of examples. First, as you saw, OpenAI selected Oracle to run deep learning and AI workloads on Oracle Cloud Infrastructure.

Speaker Change: In addition.

Speaker Change: Aps has grown at a 10% compounded annual growth rate over that same period.

Speaker Change: Both operating cash flow and free cash flow, which of course, we report on a trailing 12 month basis, where each declining 10% four years ago. This year, they grew 9% and 39% respectively.

Safra Ada Catz: This year, they grew 9% and 39% respectively. Now, customer conversations are now absolutely fully focused on our cloud services, as the results clearly show. So, let me give you just a couple of examples. Just a couple of examples.

Speaker Change: Lee.

Speaker Change: Now customer conversations are now absolutely only focused on our cloud services as the results clearly show. So let me give you just a couple of exam.

Speaker Change: Few examples.

Safra Ada Catz: First, as you saw, OpenAI selected Oracle to run deep learning and AI workloads on Oracle Cloud Infrastructure. Like many others, OpenAI chose OCI because it is the world's fastest and most cost-effective AI infrastructure. In total, we signed over 30 AI contracts for over $12 billion this quarter and nearly $17 billion this year. Second, we continue to expand our work helping companies use our cloud applications portfolio to reinvent their businesses. As an example, a very large enterprise tech company signed a contract in Q4 for over $600 million where we will be helping them transform their operations with Fusion to enable them to become more agile, faster growing, and more profitable. May I say, in the process, we will replace many of our competitors' products.

Speaker Change: First as you saw open AI selected Oracle to run deep learning and AI workloads.

Speaker Change: Oracle cloud infrastructure.

Safra Catz: Like many others, OpenAI chose OCI because it is the world's fastest and most cost-effective AI infrastructure. In total, we signed over 30 AI contracts for over 12 billion dollars this quarter and nearly 17 billion this year. Second, we continue to expand our work helping companies use our cloud applications portfolio to reinvent their businesses. As an example, a very large enterprise tech company signed a contract in Q4 for over 600 million dollars where we will be helping them transform their operations with Fusion to enable them to become more agile, faster growing, and more profitable. May I say, in the process, we will replace out many of our competitors' product.

Speaker Change: Many others open AI chose OCI because it is the world's fastest and most cost effective AI infrastructure in total we signed over 30 AI contract for over $12 billion this quarter and nearly 17.

Speaker Change: Bill yet this year.

Speaker Change: Second we continue to expand our work helping companies use our cloud applications portfolio to reinvent their businesses and some.

Speaker Change: Example, a very large enterprise Tech company signed a contract in Q4 for over $600 million, where we will be helping them transform their operations with fusion to enable them to become more agile.

Speaker Change: Faster growing and more profitable may I say in the process, we will replace out many of our competitors product.

Safra Catz: These cross-pillar cloud deals or sweet deals focus on business process reengineering that incorporate multiple cloud applications that no one else can offer.

Speaker Change: These cross pillar cloud deal or suite deals focused on business process reengineering that incorporate multiple cloud applications.

Safra Ada Catz: These cross-pillar cloud deals, or suite deals, focus on business process re-engineering that incorporates multiple cloud applications that no one else can offer. And I want to point out, by the way, that today is day 11 of our new fiscal year, and we are once again announcing our results, not only for the quarter, but the year, and giving guidance, making us faster than any other public company by a long shot. We are able to do this because of Fusion applications. And that is why companies are choosing Fusion. And our wonderful teams are showing them the way.

Speaker Change: No one else can offer and I want to point out by the way that today is day 11 of our new fiscal year and we are once again announcing our results not only for the quarter, but the year and giving guidance.

Safra Catz: And I want to point out, by the way, that today is day 11 of our new fiscal year, and we are once again announcing our results, not only for the quarter but the year, and giving guidance. Making us faster than any other public company by a launch. We are able to do this because of fusion applications, and that is why companies are choosing Fusion and our wonderful teams are showing them the way. And third, I'm pleased to announce that we've signed another multi-cloud partnership, this time with Google. OCI and Google Cloud Network Interconnect is available immediately in 10 regions, and we will be live with Oracle Database at Google Cloud in September, where customers can get direct access to Oracle Database Services running on OCI deployed in Google Cloud Database Center.

Speaker Change: Making us faster than any other public company by a long shot.

Speaker Change: We are able to do this because of fusion applications and that is why companies are choosing fusion and our wonderful teams are showing them the way.

Safra Ada Catz: And third, I'm pleased to announce that we've signed another multi-cloud partnership, this time with Google. OCI and Google Cloud Network Interconnect are available immediately in 10 regions. And we will be live with Oracle Database on Google Cloud in September, where customers can get direct access to Oracle Database services running on OCI, deployed in Google Cloud Data Center. So what's driving this?

Speaker Change: And third I am pleased to announce that we've signed another multi cloud partnership this time with Google.

Speaker Change: OCI and Google Cloud network interconnect is available immediately in 10 regions and we will be live with Oracle database at Google Cloud in September where customers can get direct access to Oracle database services running on OCI.

Speaker Change: Deployed in Google Cloud data centers, so what's driving this well it is all about our comprehensive highly differentiated and secure cloud offering customers have progressed from their initial curiosity about oracle cloud into fall.

Safra Catz: So what's driving this? Well, it is all about our comprehensive, highly differentiated, and secure cloud offerings. Customers have progressed from their initial curiosity about Oracle Cloud into full, blown rollouts. We have the most secure, complete, and cost-effective set of enterprise applications and infrastructure cloud technologies of any vendor. Not only are our cloud technologies vertically integrated to work together, but we offer flexible deployment models like public cloud, multi-cloud, sovereign cloud, dedicated cloud, or any other way our customers ask us to deliver. And we also offer Oracle Alloy, where Oracle partners become cloud providers, offer and customize cloud services alongside the Oracle cloud.

Safra Ada Catz: Well, it is all about our comprehensive, highly differentiated, and secure cloud offering. Customers have progressed from their initial curiosity about Oracle Cloud to full-blown rollout. We have the most secure, complete, and cost-effective set of enterprise applications and infrastructure cloud technologies of any vendor. Not only are our cloud technologies vertically integrated to work together, but we offer flexible deployment models like public cloud, multi-cloud, sovereign cloud, dedicated cloud, or any other way our customers ask us to deliver.

Speaker Change: Full blown rollouts.

Speaker Change: We have the most secure complete and cost effective set of enterprise applications and infrastructure cloud technologies of any vendor not only are our cloud technologies vertically integrated to work together, but we offer flexible deployment models like public.

Speaker Change: Cloud multi cloud sovereign clouds dedicated cloud or any other way our customers ask us to deliver and we also offer Oracle alloy, where oracle partners become cloud providers offering customized cloud services along.

Safra Ada Catz: And we also offer Oracle Alloy, where Oracle partners become cloud providers offering customized cloud services alongside the Oracle Cloud. Now, I'm now going to dive into the details of Q4 and finish my prepared remarks with how this strength and momentum will impact fiscal year 25 and beyond. Okay, so let's start.

Speaker Change: Alongside the Oracle cloud now I'm now going to dive into the details of Q4 and finish my prepared remarks, with how the strength and momentum.

Safra Catz: Now, I'm now going to dive into the details of Q4 and finish my prepared remarks with how this strength and momentum will impact fiscal year 25 and beyond. Okay, so let's start. In Q4, the dollar strengthened from the time of my Q4 guidance, so we saw a 1% currency headwind to total revenue and a 1% currency headwind to EPS. As usual, I'll be discussing our financials using constant currency growth rates, because this is how we manage the business. Total cloud revenue that is SaaS plus IaaS, excluding CERNER, was 4.7 billion, up 23%; including CERNER. Total cloud revenue was up 20% at 5.3 billion.

Speaker Change: Impact fiscal year, 'twenty five and beyond.

Speaker Change: Okay. So let's start.

Speaker Change: In Q4, the dollar strengthened from the time of my Q4 guidance. So we saw a 1% currency headwind to total revenue and a one cent currency headwind to EPS.

Safra Ada Catz: In Q4, the dollar strengthened from the time of my Q4 guidance, so we saw a 1% currency headwind to total revenue and a 1 cent currency headwind to EPS. As usual, I'll be discussing our financials using constant currency growth rates because this is how we manage the business. Total cloud revenue, that is, SaaS plus IaaS, excluding Cerner, was 4.7 billion, up 23%. Including Cerner, total cloud revenue was up 20% at $5.3 billion, and SaaS revenue of $3.3 billion, up 10%, and IaaS revenue of $2 billion, up 42% on top of last year. 77% growth

Speaker Change: Sure I'll be discussing our financials using constant currency growth rate because this is how we manage the business.

Speaker Change: Total cloud revenue.

Speaker Change: That is SaaS, plus ias, excluding cerner with $4 7 billion up 23%, including Cerner.

Speaker Change: Total cloud revenue was up 20% at $5 3 billion and SaaS revenue of $3 three.

Safra Catz: And SaaS revenue of 3.3 billion, up 10%, and IaaS revenue of 2 billion, up 42% on top of last year's 77% growth. Total cloud services and license support for the Q4 was 10.2 billion, up 10% driven again by our strategic cloud application, up 10% on top of that, up 10% on top of that, up 10% on top of that, up 10% on top of that, up 10% on top of that, up 10% on top of that, up 10% on top of that, up 10% on top of that, up 10% on top of that, up 10% on top of that, up 10% on top of that, up 10% on top of that, up 10% on top of that, up 10% on top of that, up 10% on top of that, up 10% on top of that, up 10% on top of that, up 10% on top of that, up 10% on top of that, up 10% on top of that, up 10% on top of that, up 10% on top of that, up 10% on top of that, up 10% on top of that, up 10% on top of that, up 10% on top of that, up 10% on top of that, up 10%, Aton, and the database, N-O-C-I.

Speaker Change: Billion up 10% and <unk> revenue of $2 billion up 42% on top of last year's.

Speaker Change: 77% growth.

Safra Ada Catz: Total cloud services and license support for the quarter was $10.2 billion, up 10%, driven again by our strategic cloud applications, autonomous database, and OCI. Application subscription revenues, which include product support, were $4.6 billion and up 6%. Our strategic back office SaaS applications now have annualized revenue of $7.7 billion, and we're up 16%. Infrastructure subscription revenues, which include license support, were $5.6 billion, up 13%. Infrastructure cloud services revenue was up 42%. Excluding legacy hosting, OCI Gen 2 infrastructure cloud services grew 44% with an annualized revenue of $7.4 billion. OCI consumption revenue was up 53%. However, were it not for continuing supply constraints, consumption growth would have been even higher.

Speaker Change: Total cloud services and license support for the quarter was $10 2 billion up 10% driven again by our strategic cloud applications Autonomous database and OCI apps.

Safra Catz: Application subscription revenues, which includes product support, were 4.6 billion and up 6%. Our strategic back-off is staff's applications now have annualized revenue of 7.7 billion, and we're up 16%. Infrastructure subscription revenues, which includes license support, were 5.6 billion, up 13%. Infrastructure cloud services revenue was up 42%. Excluding legacy hosting, OCI Gen2 infrastructure cloud services grew 44% with an annualized revenue of 7.4 billion. OCI consumption revenue was up 53%; were it not for continuing supply constraints, consumption growth would have been even higher. Database subscriptions, which includes database license support, were up 6%. And highlighted by cloud database services, which were up 26%, and now have an annualized revenue of 2.0 billion.

Speaker Change: Applications subscription revenues, which includes product support were $4 6 billion and up 6% our strategic back office SaaS applications now have annualized revenue of $7 7 billion and were up 16%.

Speaker Change: Infrastructure subscription revenues, which includes license support were $5 6 billion up 13% infrastructure cloud services revenue was up 42% excluding legacy hosting OCI Gen two infrastructure cloud services.

Grew 44% with an annualized revenue of $7 4 billion.

Speaker Change: OCI consumption revenue was up 53% were it not for continuing supply constraints.

Speaker Change: <unk> growth would have been even higher.

Safra Ada Catz: Database subscriptions, which include database license support, were up 6% and highlighted by cloud database services, which were up 26% and now have an annualized revenue of $2 billion. Very importantly, as on-premise databases migrate to the cloud, either to OCI directly or using databases at Azure or databases at Google Cloud, we expect these cloud database services will be that third leg of revenue growth alongside OCI and strategic SaaS. Consistent with our strategic direction and reflecting customer preference for cloud services, software license revenues were down 14% to $1.8 billion.

Speaker Change: Database subscriptions, which includes database license support were up 6% and highlighted by cloud database services, which were up 26% and now have an annualized revenue of 2 billion.

Safra Catz: Very importantly, as on-premise databases migrate to the cloud, either to OCI directly or using Database Editor or Database at Google Cloud. We expect these cloud database services will be that third leg of revenue growth alongside OCI and strategic staff. Consistent with our strategic direction and reflecting customer preference for cloud services, software license revenues were down 14% to 1.8 billion. So all in total revenues for the quarter were 14.3 billion. That's up 4% if you include Sooner, up 5% excluding Sooner. Shifting to margin, the gross margins for cloud services and license support was 77%. This is a result of the mix between support and cloud in which cloud is growing much faster than support.

Speaker Change: Very importantly, as on premise databases migrate to the cloud either to OCI directly or using database that asher or database and Google cloud. We expect these cloud database services will be that third leg of revenue growth alongside <unk>.

Speaker Change: And strategic staff.

Speaker Change: Consistent with our strategic direction, and reflecting customer preference for cloud services.

Safra Ada Catz: So all in, total revenues for the quarter were $14.3 billion. That's up 4% if you include Cerner, and up 5% excluding Cerner. Shifting to margin, the gross margin for cloud services and license support was 77%. This is a result of the mix between support and cloud, where cloud is growing much faster than support.

Speaker Change: Software license revenues were down.

Speaker Change: 14% to $1 8 billion. So all in total revenues for the quarter were $14 3 billion. That's up 4%. If you include cerner up 5% excluding cerner.

Speaker Change: Shifting to margin the gross margin for cloud services and license support was 77%. This is a result of the mix between support and cloud in which cloud is growing much faster than support.

Safra Catz: The gross margin percentages for software support and staff are consistent with last year. While I as gross margins improved substantially, gross margins will go higher as more of our cloud regions fill up. We monitor our expenses carefully to ensure gross margin percentages expand as we scale. To that point, though, the gross profit dollars of cloud services and license support grew 8% in Q4. Non-GAAP operating income was 6.7 billion, up 9% from last year. The operating margin was 47%, up from 44% last year as we continue to drive more efficiencies in our business.

Safra Ada Catz: The gross margin percentages for software support and SaaS are consistent with last year, while IaaS gross margins improved substantially. Gross margins will go higher as more of our cloud regions fill up. We monitor our expenses carefully to ensure gross margin percentages expand as we scale. To that point, though, the gross profit dollars of cloud services and license support grew 8% in Q4. Non-GAAP operating income was $6.7 billion, up 9% from last year.

Speaker Change: The gross margin percentages for soft of course software support and SaaS are consistent with last year, while I as gross margins improved substantially.

Speaker Change: Gross margins will go higher as more of our cloud regions fill up we.

Speaker Change: We monitor our expenses carefully to to ensure gross margin percentages expand as we scale.

Speaker Change: To that point, though the gross profit dollars of cloud services and license support grew 8% in Q4.

Speaker Change: non-GAAP operating income was $6 7 billion up 9% from last year. The operating margin was 47% up from 44% last year as we continue to drive more efficiencies in our business.

Safra Ada Catz: The operating margin was 47%, up from 44% last year, as we continue to drive more efficiencies in our business. Looking forward, as we continue to benefit from economies of scale in the cloud, we will not only continue to grow operating income, but we will also expand the operating margin percentage. The non-GAAP tax rate came out over 1% higher than my guidance, at 20.1%.

Safra Catz: Business. Looking forward, as we continue to benefit from economies of scale in the cloud, we will not only continue to grow operating income, but we will also expand the operating margin percentages. The non-gap tax rate came out over 1% higher than my guidance, at 20.1%, and non-gap EPS was $1.63, and gap EPS was $1.11 in U.S.D. As a reminder, the non-GAAP tax rate last year was 9.2%, and this had an adverse effect on this quarter's EPS growth. Non-GAAP pre-tax income grew 14% in constant currency. So you can figure out that had we had the same tax rate last year as this year, net income would have grown 14%, and EPS would have been up 12% in CD, 11% in U.S.D.

Speaker Change: Looking forward as we continue to benefit from economies of scale in the cloud we will not only continue to grow operating income, but we will also expand and the operating margin percentages.

Safra Ada Catz: And non-GAAP EPS was $1.63, and GAAP EPS was $1.11 in USD. As a reminder, the non-GAAP tax rate last year was 9.2%, and this had an adverse effect on this quarter's EPS growth. However, non-GAAP pre-tax income grew 14% in constant currency.

Speaker Change: The non-GAAP tax rate came out over 1% higher than my guidance at 21% and non cat and non-GAAP EPS was $1 63, and GAAP EPS with $1.11 in USD.

Speaker Change: As a reminder, the non-GAAP tax rate last year was nine 2% and this had an adverse effect on this quarter's EPS growth.

non-GAAP.

Speaker Change: non-GAAP pretax income grew 14% in constant currency. So you can figure out that had we had the same tax rate last year of this year net income would have grown 14% and EPS would have been up 12% and C D 11%.

Safra Ada Catz: So you can figure out that had we had the same tax rate last year as this year, net income would have grown 14%, and EPS would have been up 12% in CD, 11% in USD. For the full fiscal year, total company revenue was 53 billion, up 6%. Total cloud services and license support revenue, which is entirely subscription based and accounts for nearly three quarters of total revenue, was 39.4 billion, up 11%. Total Application Subscription revenues grew 9%, and Infrastructure Subscription revenues grew 13%. Total cloud services, excluding Cerner, were up 26% to 17.3%. $1.2 billion. SAS revenue, excluding Cerner, was up 13% to $10.4 billion for the year.

Speaker Change: U S D.

Safra Catz: For the full fiscal year, total company revenue was $53 billion, up 6%. Total cloud services and licensed support revenue, which is entirely subscription based, counts for nearly three quarters of total revenue, with $39.4 billion, up 11%. Total application subscription revenues grew 9%, and infrastructure subscription revenue grew 13%. Total cloud services, excluding CERNAR, were up 26% to 17.2 billion. Tax revenue excluding CERNAR was up 13% to 10.4 billion for the year. IS and cloud infrastructure revenue was up 50% to 6.8 billion for the year, with consumption revenue up 66% from last year. Non-GAAP EPS for the full year was $5.56 in U.S.D., up 9% in U.S.D., and the full year operating margin percentage was 44%, up from 42% last year.

Speaker Change: For the full fiscal year total company revenue was 53 billion up 6% total cloud services and license support revenue, which is entirely subscription based and accounts for nearly three quarters of total Rev.

Speaker Change: <unk> was 39 4 billion up 11% total applications subscription revenues grew 9% and infrastructure subscription revenue grew 13%.

Speaker Change: Total cloud services, excluding Cerner, we're up.

Speaker Change: Up 26% to 17 point.

Speaker Change: One 2 billion.

Speaker Change: <unk> revenue, excluding Cerner was up 13% to 10 built with $10 4 billion for the year Ias and cloud infrastructure revenue was up 50% to six 8 billion for the year with consumption revenue up 66 person.

Safra Ada Catz: IAS and cloud infrastructure revenue was up 50% to $6.8 billion for the year, with consumption revenue up 66% from last year. Non-cash EPS for the full year was $5.56 in USD, up 9% in USD. And the full year operating margin percentage was 44%, up from 42% last year. At quarter end, we had nearly $10.7 billion in cash and marketable securities. The short-term deferred revenue balance was $9.3 billion, up 4%. Over the last four quarters, operating cash flow was $18.7 billion, up 9%, and free cash flow was $11.8 billion, up 39%. Capital expenditures were $6.9 billion.

Speaker Change: From last year.

Speaker Change: non-GAAP EPS for the full year was $5.56 in USD up 9% in USD.

Speaker Change: And the full year operating margin percentage was 44% up from 42% last year.

Safra Catz: At quarter end, we had nearly $10.7 billion in cash and marketable securities; the short term deferred revenue balance was $9.3 billion, up 4%. Over the last four quarters, operating cash flow was 18.7 billion, up 9%, and free cash flow was 11.8 billion, up 39%. Capital expenditures were $6.9 billion. As I mentioned, a remaining performance obligation or RPO is now... on 98 billion, up 44% in constant currency, and the portion excluding Cernar, if you're curious, was up 60%. We signed several large deals in this quarter, and we have many, many, many more in the pipeline. A approximately 39% of total RPO is expected to be recognized as revenue over the next 12 months.

Speaker Change: At quarter end, we had nearly $10 $7 billion in cash and marketable securities. The short term deferred revenue balance was $9 3 billion.

Speaker Change: 4%.

Speaker Change: Over the last four quarters operating cash flow was $18 7 billion up 9% and free cash flow was $11 8 billion up 39%.

Speaker Change: Capital expenditures were $6 9 billion.

Safra Ada Catz: As I mentioned, our remaining performance obligation, or RPO, is now $98 billion, up 44% in constant currency, and the portion excluding Cerner, if you're curious, was up 60%. We signed several large deals in this quarter, and we have many more, many, many more in the pipeline. Approximately 39% of total RPO is expected to be recognized as revenue over the next 12 months, and this reflects the growing trend of customers wanting larger contracts as they see firsthand how Oracle Cloud Services are benefiting their business.

Speaker Change: As I mentioned, our remaining performance obligations or RP O is now 98 billion up 44% in constant currency and the portion excluding cerner, if you're curious was up 60%.

Speaker Change: We signed several large deals in this quarter and we have many more many many more in the pipeline.

Speaker Change: Proximately, 39% of total RPM is expected to be recognized as revenue over the next 12 months and this reflects the growing trend of customers wanting larger contract as they see firsthand how oracle cloud services are.

Safra Catz: And this reflects the growing trend of customers wanting larger contracts as they see firsthand how Oracle Cloud services are benefiting their businesses. Now, while we spent $3.5 billion on CAPEX this quarter, the $2.8 billion shown in the cash flow statement is lower simply as a result of timing of payments. We are working as quickly as we can to get cloud capacity built out given the enormity of our backlog and pipeline. At this moment, we have 76 customer-facing cloud regions live with 47 public cloud regions around the world and another 19 being built. We have 11 databases at Azure sites live and more locations with Microsoft coming online soon.

Speaker Change: Fitting their businesses.

Speaker Change: Now, while we spent three and a half billion dollars on Capex this quarter to $2 8 billion shown in the cash flow statement is lower simply as a result of timing of payments.

Safra Ada Catz: Now, while we spent three and a half billion dollars on CapEx this quarter, the 2.8 billion shown in the cashflow statement is lowered simply as a result of timing of payment. We are working as quickly as we can to get cloud capacity built out, given the enormity of our backlog and pipeline. At this moment, we have 76 customer-facing cloud regions live, with 47 public cloud regions around the world and another 19 being built. We have 11 databases at Azure sites live, and more locations with Microsoft coming online soon.

Speaker Change: We are working as quickly as we can to get plowed capacity built out given the enormity of our backlog and pipeline.

Speaker Change: At this moment, we have 76 customer facing cloud regions live.

Speaker Change: With 47 public cloud regions around the World and then another 19 being built.

Speaker Change: We have 11 database. It has your sites live and more locations with Microsoft coming online soon and we will have 12 Oracle database at Google Cloud side. Besides lives this year.

Safra Catz: We will have 12 Oracle databases at Google Cloud sites live this year. We also have 13 dedicated regions live and 15 more planned. We have several national security regions and EU sovereign regions live with increasing demands for more of each. And finally, we already have two Alloy Cloud regions live with 11 more planned. Of course, we also have many, many, many clouded customer installations. As I mentioned earlier, the sizing and flexibility and the sizing flexibility and deployment optionality of our cloud regions continues to be incredibly, incredibly advantageous for us in the marketplace. This quarter, we purchased 1.25 million shares for a total of 150 million.

Safra Ada Catz: And we will have 12 Oracle databases at Google Cloud sites live this year. We also have 13 dedicated regions live and 15 more planned. We have several national security regions and EU sovereign regions live, with increasing demand for more of each. And finally, we already have two alloy cloud regions live with 11 more planned.

Speaker Change: We also have 13 dedicated regions live and 15 more plans, we have several national security region, and EU sovereign regions live with increasing demand for more of beach and finally, we already have two alloy cloud regions lives.

We feel 11 more planned of course, we also have many many many cloud at customer installations as I mentioned earlier, the sizing and flexibility and the size and flexibility in deployment Optionality of our cloud regions continues to be.

Safra Ada Catz: Of course, we also have many, many, many clouded customer installations. As I mentioned earlier, the sizing and flexibility, and the sizing flexibility and deployment optionality of our cloud regions continue to be incredible.

Speaker Change: Ratable.

Speaker Change: Credibly advantageous for us in the marketplace. This.

Safra Ada Catz: Page 10 of 10, This quarter, we purchased 1.25 million shares for a total of 150 million. In addition, we paid out dividends of $4.4 billion over the last 12 months, and the Board of Directors today declared a dividend of 40 cents per share. Before I discuss my guidance for Q1 and fiscal 2025, I do just want you to have a couple of notes. The first is that in Q4, we decided to exit the advertising business, which had declined to about $300 million in revenue in fiscal year 24.

Speaker Change: This quarter, we purchased 125 million shares for a total of $150 million.

Safra Catz: In addition, we paid out dividends of $4.4 billion over the last 12 months, and the Board of Directors today declared a dividend of $0.40 per share.

Speaker Change: In addition, we paid out dividends of $4 $4 billion over the last 12 months and the board of directors today declared a dividend of 40 cents per share.

Safra Catz: Before I discuss my guidance for Q1 and fiscal 2025, I do just want you to have a couple of notes. The first is that in Q4, we decided to exit the advertising business, which had declined to about $300 million in revenue in fiscal year 24. Also, I will no longer break breaking out the CERN or business in my results. And even though it will begin to grow modestly throughout the year in both revenue and operating margin, it's not necessary to break it out anymore. And because it is now on. Operating in a growth mode.

Speaker Change: Before I discuss my guidance for Q1 and fiscal 2025 I do just want you to have a couple of notes. The first is that in Q4, we decided to exit the advertising business, which had declined to about $300 million in revenue in fiscal year 'twenty.

Speaker Change: Sure.

Safra Ada Catz: Also, I will no longer be breaking out the Cerner business in my results. And even though it will begin to grow modestly throughout the year, in both revenue and operating margin, it's not necessary to break it out anymore because it is now operating in a growth mode. Now to guidance.

Speaker Change: Also I will no longer be breaking out the cerner business and my herself and even though it will begin to grow modestly throughout the year in both our revenue and hitting both revenue and operating margin, it's not it's not necessary to break it out anymore.

Speaker Change: And a bit.

Speaker Change: Because it is now operating.

Speaker Change: In a growth mode.

Safra Catz: Now to guidance. Throughout fiscal year 2025, I expect continued strong cloud demand to push Oracle sales and RPO even higher, and results in double-digit revenue growth this fiscal year. I also expect that each successive quarter should grow faster than the previous quarter, as OCI capacity increases to meet demand. We believe our momentum, our current momentum, will continue as our pipeline is growing even faster than bookings, and our win rates are going higher as well. I expect fiscal year 25 cloud infrastructure services to grow faster than the 50% we reported this year. CapEx in fiscal year 25 will probably be double what it is in fiscal year 24, what it was in fiscal year 24.

Speaker Change: Now to guidance.

Safra Ada Catz: Throughout fiscal year 2025, I expect continued strong cloud demand to push Oracle sales and R&D even higher and result in double-digit revenue growth this fiscal year. I also expect that each successive quarter should grow faster than the previous quarter as OCI capacity increases to meet demand. We believe our momentum, our current momentum, will continue as our pipeline is growing even faster than bookings and our win rates are going higher as well.

Speaker Change: Our fiscal year 2025, I expect to continue strong cloud demand to push Oracle sales and our Po even higher.

Speaker Change: And result in double digit revenue growth. This fiscal year I also expect that each successive quarter should grow faster than the previous quarter as OCI capacity increases to meet demand.

We believe our momentum our current momentum will continue as our pipeline is growing even faster than bookings.

Speaker Change: And our win rates are going higher as well.

Safra Ada Catz: I expect fiscal year 25 cloud infrastructure services to grow faster than the 50% we reported this year. CapEx in fiscal year 25 will probably be double what it was in fiscal year 24. Okay, beyond this fiscal year, I remain firmly committed to our fiscal year 26 financial goals for revenue, operating margins, and EPS growth. However, given our strong bookings results, I believe some of these goals might prove to be too conservative given our momentum.

I expect fiscal year, 'twenty, five cloud infrastructure services to grow faster than the 50% we reported.

Speaker Change: This year.

Speaker Change: Capex in fiscal year 'twenty, five we'll probably be double what it is in fiscal year 'twenty for what it was in fiscal year 'twenty four.

Safra Catz: Beyond this fiscal year, I remain firmly committed to our fiscal year 26 financial goals for revenue, operating margins, and EPS growth. However, given our strong bookings results, I believe some of these goals might prove to be too conservative, given our momentum.

Speaker Change: Beyond this fiscal year I remain firmly committed to our fiscal year 'twenty six financial goals for revenue.

Speaker Change: Operating margins and EPS growth, however, given our strong bookings results I believe some of these goals might prove to be too conservative given our momentum.

Safra Catz: We are going to provide you a more fulsome update on all of this at the financial analyst meeting at Oracle Cloud World in Las Vegas in September.

Safra Ada Catz: We are going to provide you with a more fulsome update on all of this at the Financial Analysts Meeting at Oracle CloudWorld in Las Vegas in September. Okay, let me now turn to my guidance for Q1, which I'll review on a non-GAAP basis. Now, if currency exchange rates remain the same as they are now, currency should have a negative 1% effect on my revenue, and either a penny or two pennies negative on EPS in Q1. However, as you all know, the actual currency impact may be more or less. I just can't guess that.

Speaker Change: We are going to provide you a more fulsome update on all of this at the financial analyst meeting at Oracle Cloud World in Las Vegas in September.

Safra Ada Catz: Total revenue for Q1 is expected to grow from 6% to 8% in constant currency, and using the currency situation as it is now, they're expected to grow from 5% to 7% in USD. Total cloud revenue is expected to grow from 21 to 23% in constant currency and 20 to 22% in USD. Non-GAAP EPS is expected to grow between 11% to 15% and be between $1.33 and $1.37 in constant currency. Non-GAAP EPS is expected to grow between 10 to 14% and be between $1.31 and $1.35, but this time in USD.

Safra Catz: Let me now turn to my guidance for Q1, which I'll review on a non-GAAP basis. Now, if currency exchange rates remain the same as they are now, currency should have a negative 1% effect on my revenue, and either a penny or two pennies negative on EPS in Q1. However, as you all know, actual currency impact may be more or less; I just can't guess that now. Total revenue for Q1 are expected to grow from 6% to 8% in constant currency, and using the currency situation as it is now, they're expected to grow from 5% to 7% in USD.

Speaker Change: Okay. Let me now turn to my guidance for Q1, which I'll review on a non-GAAP basis now if currency exchange rates remain the same as they are now.

Speaker Change: Currency should have a negative 1% effect on my revenue.

And either a penny or two pennies negative.

Speaker Change: EPS in Q1.

Speaker Change: However.

Speaker Change: As you all know actual currency impacts may be more or less.

Speaker Change: Just can't get that now.

Speaker Change: Total revenue for Q1 are expected to grow from 6% to 8% in constant currency and using the currency situation. As it is now they are expected to grow from 5% to 7% in USD.

Safra Catz: Total cloud revenue is expected to grow from 21% to 23% in constant currency, and 20% to 22% in USD. Non-GAAP EPS is expected to grow between 11% to 15%, and be between $1.33 and $1.37 in constant currency. Non-GAAP EPS is expected to grow between 10% to 14% and be between $1.31 and $1.35, but this time in USD. My EPS guided... for Q1, assumes a base tax rate of 20%. And, as always, one-time tax events could cause the actual tax rates to vary from my guidance.

Speaker Change: Total cloud revenue is expected to grow from 21% to 23% in constant currency and 20% to 22% in USD.

Speaker Change: non-GAAP EPS is expected to grow between 11% to 15% and be between $1 33, and $1 37 in constant currency.

Speaker Change: non-GAAP EPS is expected to grow beats.

Speaker Change: Between 10% to 14% and be between $1 31, and $1 35, but this time in USD.

Safra Ada Catz: My EPS guidance for Q1 assumes a base tax rate of 20%, and as always, one-time tax events could cause the actual tax rates to vary from my guidance. Okay, I know that was long, but with that, let me turn it to Larry for his comment.

Speaker Change: My E. P. S guidance for Q1 assumes a base tax rate of 20% and as always one time tax events could cause the actual tax rates to they already from my God. Okay. I know that was long, but with that let me turn it to <unk>.

Safra Catz: Okay.

Larry Ellison: I know that was long, but with that, let me turn it to Larry for his comments.

Lawrence J. Ellison: Larry for his comments.

Lawrence J. Ellison: Thank you, Safra. I'm going to start by repeating something Safra said.

Larry Ellison: Thank you, Safra. I'm going to start by repeating something Safra said.

Scott: Thank you Scott.

Well I'm going to start by repeating something separate.

Larry Ellison: Excuse me. In Q4, Oracle's company-wide RPO increased 44% to $98 billion. In AI alone, we signed contracts with 30 different customers for $12.5 billion in new AI business. These astonishing RPO numbers, 24% and $98 billion, were driven by massive increases in sales of Oracle Cloud Infrastructure, OCI. So, who are the companies choosing to use Oracle Cloud Services and Oracle Data Centers? Well, here are a few names. Nvidia, Microsoft, Google, XAI, OpenAI, coherent dozens more. In other words, the world's largest cloud companies. And the world's most successful and accomplished AI companies. Choose to use Oracle Cloud Services and Data Centers.

Excuse me.

Speaker Change: Q4, Oracle's companywide RP O.

Speaker Change: Increased 44% to $98 billion.

Speaker Change: And AI alone, we signed contracts with 30 different customers for $12 $5 billion in new AI businesses.

Lawrence J. Ellison: In Q4, Oracle's company-wide RPO increased 44% to $98 billion. In AI alone, we've signed contracts with 30 different customers for $12.5 billion in new AI business. These astonishing RPO numbers and $98 billion were driven by massive increases in sales of Oracle Cloud Infrastructure (OCI). So who are the companies choosing to use Oracle Cloud Services and Oracle Data Centers? Well, here are a few names.

Speaker Change: Yes.

Speaker Change: These are astonishing RPM numbers.

Speaker Change: 44% and $98 billion were driven by massive increases in sales.

Of Oracle cloud infrastructure OCR.

Lawrence J. Ellison: NVIDIA, Microsoft, Google, XAI, OpenAI, and coherent dozens more. In other words, the world's largest cloud company, and the world's most successful and accomplished AI company, choose to use Oracle Cloud Services and Data Center. So, excuse me again.

Speaker Change: So who are the companies choosing to use.

Speaker Change: Oracle cloud services and Oracle data centers.

Speaker Change: Well here.

Speaker Change: Here are a few names.

Speaker Change: And video.

Speaker Change: Microsoft.

Speaker Change: Google.

Speaker Change: That's a R.

Speaker Change: Open.

Hi.

Speaker Change: So here and dozens more.

Speaker Change: In other words, the world's largest cloud companies.

Speaker Change: And the world's most successful and accomplished AI companies.

Speaker Change: Choose to use Oracle cloud services and data centers.

Speaker Change: So.

Lawrence J. Ellison: So why are they working with Oracle? Because Oracle's Gen2 cloud infrastructure is different. OCI's RDMA network moves data much faster. And when you charge by the minute, faster also means less expensive.

Larry Ellison: So, excuse me again. So, why are they working with Oracle? Because Oracle's Gen2 Cloud Infrastructure is different. OCI's RME network moves data much faster. And when you charge by the minute, faster also means less expensive. OCI trains large language models several times faster and at a fraction of the cost of other clouds. OCI's critical cloud software, the operating system and the database, are fully autonomous. At OCI, human beings do not run the operating system or the database. Yes, autonomous software robots do. No one else has this level of autonomy in the cloud. Eliminating human labor eliminates human error.

Speaker Change: Excuse me again, so why are they working with Oracle.

Speaker Change: Because oracle Gen two cloud infrastructure is different.

Speaker Change: OCR has arguably network.

Speaker Change: Moves data much faster.

Speaker Change: And when you charged by the minute faster also means less expensive.

Speaker Change: OCI frames large language models, several times faster and at a fraction of the cost of other clouds.

Lawrence J. Ellison: OCI trains large language models several times faster and at a fraction of the cost of other classes. OCI's critical cloud software, the operating system, and the database are fully autonomous. At OCI, human beings do not run the operating system or the database. Autonomous Software Robots do. No one else has this level of autonomy in the class.

Speaker Change: OCI is a critical cloud software the operating system and the database or fully autonomous.

Speaker Change: At OCI human beings do not run the operating system or the database.

Speaker Change: Autonomous software robots do.

Speaker Change: No one else has this level of autonomy in the cloud.

Eliminating human labor.

Lawrence J. Ellison: Eliminating human labor eliminates human error. Almost all cloud security breaches begin with human error. Eliminating the possibility of human error is the only way to make certain your cloud data is not stolen. That's it. The most important technology companies in the world are using OCEAN because it's faster, less expensive, and more secure. But easy to say, not easy to do. Back to you.

Speaker Change: Eliminates human error.

Larry Ellison: Almost all cloud security breaches begin with human error. Eliminating the possibility of human error is the only way to make certain your cloud data is not stolen.

Speaker Change: Almost all cloud security breaches begin with human error.

Speaker Change: Eliminating the possibility of human error is the only way to make certain you are cloud data is not stellar.

Larry Ellison: That's it. The most important technology companies in the world are using OCI because it's faster, less expensive, and more secure. Easy to say, not easy to do.

Speaker Change: That's it for me.

Speaker Change: Most important technology companies in the world are using OCI.

It's faster less expensive and more secure.

Speaker Change: Easy to say not easy to do.

Speaker Change: Back to you.

Larry Ellison: Thank you, Larry.

Speaker Change: Thank you Larry Christie, if you could please poll the audience for questions. We will begin the Q&A portion of the call.

Safra Ada Catz: Thank you, Larry. Krista, if you could please pull the audience for questions, we'll begin the Q&A portion of the call. Thank you. Our first question comes from Raimo Lenschow with Barclays. Please go ahead.

Unknown Executive: Chris, if you could please pull the audience for questions, we'll begin the Q&A portion of the call. Thank you.

Operator: Thank you. The first question comes from Raimo Lenschow with Barclays.

Thank you. Our first question comes from Raimo <unk> with Barclays. Please go ahead.

Raimo Lenschow: Our first question comes from Raimo Lenschow with Barg利. Please go ahead. Perfect. Thank you. Is there anything on the customer side that you need to deliver, or on the technology that you need to deliver? Just help us to bridge the gap on those things. Thank you.

Speaker Change: Perfect. Thank you correct for me these are very impressive numbers.

Raimo Lenschow: Perfect. Thank you. Congratulations from me. These are very impressive numbers.

Operator: Please go ahead. Perfect. Thank you.

Speaker Change: Can you try to help us bridge that.

Speaker Change: As for the RP, all number and how we need to think about feeding that into revenue if that's okay.

So Pete function or is there anything on the customer side that you need to deliver on the technological can you deliver just help us to bridge the gap on those thank you.

Larry Ellison: It's all about capacity. It is as we bring the capacity online, wherever it's going online around the world, is when those workloads are coming over. A lot of the engineering work was done in advance so that those customers know how they can operate. They bring smaller workloads, but the bigger workloads, they're just waiting for us to go online and make it available to them. It is really that level. We are scheduling them on our availability. And as I mentioned, our pipeline to take more deals is all about us just getting the capacity up and live and moving forward.

Unknown Executive: It's all about capacity. It is, as we bring the capacity online, wherever it is going online around the world, when those workloads are coming over. A lot of the engineering work is done in advance, so that those customers know how they can operate. They bring smaller workloads, but the bigger workloads, they're just waiting for us to go online and make it available to them. It is really that level.

Speaker Change: It's all about capacity it is as we bring the capacity online wherever it's going online around the world is windows workloads are coming over a lot of the engineering work is done in advance so that those customers know how they can operate.

Speaker Change: They bring smaller workloads, but the bigger workloads, they they're just waiting for us to go online and make it available to them. It is really that level, we're scheduling them on our availability and and as I mentioned our pipeline.

Unknown Executive: We are scheduling them according to our availability. And as I mentioned, our pipeline to take more deals is all about us just getting the capacity up and running and moving forward. So it's just a mechanical problem in a way. Yeah, well, it's not a problem.

Speaker Change: To take more deals is all about us just getting the capacity up and live.

Speaker Change: And moving forward.

Larry Ellison: So it's just a mechanical problem in a way. Yeah, well, it's not a problem. It's just the schedule. You know, as things come online, we as the data centers go live or as we deliver the computers, they're just getting, it's just very straightforward. There's no magic here. These customers have done a lot of the analysis and the engineering in advance and have tested us or competed us against our competitors and have chosen us very already understanding how we work. And they're just waiting for us to give them more capacity.

Speaker Change: So it's just a mechanical problem in a way.

Unknown Executive: It's just the schedule. You know, as things come online, we as the data centers go live, or as we deliver the computers, they're just getting it. It's just very straightforward. There's no magic here. These customers have done a lot of the analysis and the engineering in advance and have tested us or competed against our competitors, and they have chosen us very early on, understanding how we work. And they're just waiting for us to give them more capacity.

Speaker Change: Yeah, well, it's not a problem. Its just the schedule you know as things come online we as the data centers go lives or as we deliver the computers are if they're just getting it's it's just very straightforward there's no magic here.

Speaker Change: Customers have done a lot of the analysis and the engineering in advance and have tested us or competed us against our competitors and have chosen us very already understanding how we work and they're just waiting for us to give them more capacity.

Raimo Lenschow: Okay, very impressive. Thank you.

Speaker Change: Great. Thank you.

Speaker Change: Okay.

Speaker Change: Okay.

Broad Zelnick: Your next question comes from Broad Zelnic with Deutsche Bank. Please go ahead. Great.

Speaker Change: Your next question comes from Brad Zelnick with Deutsche Bank. Please go ahead.

Unknown Executive: Your next question comes from Brad Zelnick with Deutsche Bay.

Brad Alan Zelnick: Great, thank you very much, and congratulations on behalf of me as well. Larry, it's great to see the amazing momentum in OCI, especially given it's a competitive market and the leading names in AI are coming to you, wanting to partner with Oracle. Can you talk about the innovation roadmap for OCI and your AI services in particular, and why we should expect Oracle to keep on winning, not just today but over the next several years to come in this market?

Brad Alan Zelnick: Great. Thank you very much and congrats from me as well Larry it's great to see the amazing momentum in OCI, especially given it's a competitive market and the leading names in AI are coming to you wanting to partner with Oracle can you talk about the innovation roadmap for OCI and your AI services in particular and why.

Broad Zelnick: Thank you very much, and congrats for me as well. Larry, it's great to see the amazing momentum in OCI, especially given us a competitive market and the leading names in AI are coming to you wanting to partner with Oracle.

Broad Zelnick: Can you talk about the innovation roadmap for OCI and your AI services in particular and why we should expect Oracle to keep on winning not just today, but over the next several years to come in this market.

Brad Alan Zelnick: We should expect that we're going to keep on winning not just today, but over the next several years to come in this market.

Lawrence J. Ellison: Okay, well, in OCI, we've talked for a while about our ability to build very small data centers, ones you could put on a ship or a submarine or a full cloud, a full Oracle cloud. We will soon have six standard half racks to go into a conventional data center. So virtually any one of our customers could choose to have the full Oracle Cloud in their data center, with every service, every service in the cloud.

Larry Ellison: Okay, well, I think in OCI, we've talked for a while about our ability to build very small data centers, one you could put in a shipper, a submarine, or a full cloud, a full Oracle cloud. We will soon have in six standard half racks to go into a conventional data center. So virtually any one of our customers could choose to have the full Oracle Cloud in their data center with every service, every service in the cloud. And they could scale that up quite extraordinarily large. So we talk about the fact that we can start very small, and that's a huge difference between us and our competitors.

Speaker Change: Okay, well I think in OCI, we've talked for a while about our ability to build very small data centers. One of you could put in a shipper a submarine or.

Speaker Change: Our full cloud for Oracle cloud, we will soon have.

Speaker Change: Six standard half racks to go into a conventional data center.

Speaker Change: So virtually any one of our customers could choose to have the full oracle cloud in their data center.

With every service every service in the cloud.

Lawrence J. Ellison: And they could scale that up quite extraordinarily large. So we talk about the fact that we can start very small. And that's a huge difference between us and our competitors. So we can actually put it again, customer by customer, small countries. We can.

Speaker Change: And they could scale that up.

Speaker Change: Quite extraordinarily large so we talk about the fact that we can start very small and thats a huge different difference between us and our competitors.

Speaker Change: So we can actually put it again customer by customer small countries.

Speaker Change: We can do what we haven't talked so much about is we're also building the largest data centers in the world.

Lawrence J. Ellison: What we haven't talked so much about is we're also building the largest data centers in the world. We talked briefly about one last call, where we could park at the 70 megawatt data center where we can park. 8747's nose to tail in the data, The huge AI training data, Well, we're also building a 200 megawatt data center. In fact, this past quarter, we sold about half of that data for the next, you know, for a period of time.

We talked about I think we talked briefly about one last call, where we can park it.

Speaker Change: The 70 megawatt data center, where we can park.

Speaker Change: 740 sevens nose to tail in the data center, the huge AI training data center.

Speaker Change: While we're also building a 200 megawatt data center.

Speaker Change: This past quarter, we sold about half of that data center for them.

Speaker Change: For a period of time, so we're now bringing 200 megawatt data centers online. So we are literally building the smallest most portable most affordable cloud data centers all the way up to 200 megawatt data center is ideal for training very large language models and Keith.

Lawrence J. Ellison: So we're now bringing 200 megawatt data centers online. We are literally building the smallest, most portable, most affordable cloud data center, all the way up to 200 megawatt data centers, ideal for training very large language models and keeping them up to date. This AI race is going to go on for a long time. It's not a matter of getting ahead, just simply getting ahead in AI, but you also have to keep your model current, and that's going to take larger and larger data centers, and some of the data centers we have and that we're planning are actually even bigger.

Speaker Change: Ping them up to date. This AI race is going to go on for a long time, it's not a matter of getting ahead, just simply getting ahead in AI, but you also have to keep your model current and thats going to take larger and larger data centers and some of the data centers we have.

Speaker Change: But we're planning or actually even bigger there.

Lawrence J. Ellison: Some are getting very close to, dare I say it, a gigawatt, which is a pretty good-sized city or one enormous AI cloud training data center. No one else can span this range, and in every case, we have unbelievably fast networks that are a part of this. The data centers we're building include power plants, and the transmission of the power directly into the data center, and liquid cooling, because these modern data centers are moving from air-cooled to liquid-cooled, and you have to engineer them from scratch, and that's what we've been doing for some time, and that's what we'll continue to do, and currently, we are leading the pack in being able to deliver that quality and that scale of data.

Speaker Change: Some are getting very close to our dare I say it a gigawatt.

Speaker Change: Which is a pretty good sized city or one enormous AI cloud training data center.

Speaker Change: No one else can spend this range and in every case.

Speaker Change: We have unbelievably fast networks that are a part of this the.

Speaker Change: Data centers. We're building include the power plants and the transmission of the power directly into the datacenter and liquid cooling.

Speaker Change: Because these new these modern data centers are moving from air cooled to liquid cool and you have to engineer them from scratch and that's what we've been doing for some time and that's what we'll continue to do and currently we are leading the pack and being able to deliberate that.

Speaker Change: Quality and scale of data center.

Speaker Change: Yeah.

Brad Alan Zelnick: Amazing. Thank you so much, Larry.

Amazing. Thank you so much Larry.

Speaker Change: Okay.

Speaker Change: Your next question comes from Mr. D N G Gruffy with Mizuho. Please go ahead.

Sitikantha Panigrahi: Your next question comes from Sitikantha Panigrahi with Mizzouho. Please go ahead. Thank you.

Speaker Change: Yes.

Sitikantha Panigrahi: Thank you. Larry and Safra, it's impressive to see how fast you ramped OCI at Azure, now available in 11 data centers. And then, now with this Google partnership, we'll have an Oracle database at Google Cloud. So I have two questions. One is, as you embark on offering this multi-cloud flexibility to customers, when can we see a similar partnership with AWS? And second, how should we think about this partnership helping your customers migrate their on-prem Oracle workloads to the cloud?

Thank you Oh, Laurie and Safra, it's impressive to see how fast you ramped.

Speaker Change: As you're now available in 11 data centers and then now with this Google partner save Real Love Oracle database of Google Cloud. So I have two questions. One is as you embark on offering this multi cloud flexibility to customer when can we see a similar partnership with AWS and second is how should we be.

Speaker Change: How about this partner safe, helping your customers migrate their on Prem Oracle workloads to cloud.

Speaker Change: Yeah.

Speaker Change: I don't know Larry do you.

Speaker Change: I guess it started with them.

Lawrence J. Ellison: [inaudible] I can start. Well, we believe in giving customers choice, and customers want choice. Customers are using multiple clouds, not only infrastructure clouds, but they might have Salesforce applications or Workday applications, or they use multiple clouds in their business right now. So it's very important, we think, that all the clouds become interconnected. So we're thrilled to have the connection with Microsoft and be building OCI data centers right inside of Azure so the computers are next to each other to minimize network costs and network latency, which are all good things.

Speaker Change: I can start.

Speaker Change: Well, we believe in giving customers choice and customers want choice customers are using multiple clouds, not only infrastructure cloud, but they might have salesforce applications or workday applications.

Speaker Change: They use multiple cloud.

Speaker Change: <unk>.

Speaker Change: And their business right now so it's very important we think that these are all the clouds become interconnected.

Speaker Change: So we're thrilled to have added the connection with with Microsoft and B building OCI data centers inside right inside of Azure. So the computers are next to each other to minimize network costs and network latency.

Lawrence J. Ellison: We're doing the same thing with Google, and we would love to do the same thing with AWS. We think we should be interconnected to everybody, and that's what we're attempting to do in our multi-cloud strategy. I think that's what customers want, so I'm optimistic that's the way the world will settle out. We'll get rid of these fees for moving data from cloud to cloud, and all the clouds will be interconnected, so customers can pick their favorite service from their favorite cloud and mix and match whatever they want to use, and do it easily and seamlessly.

Speaker Change: Which is which is all good things we're doing the same thing with Google We would love to do the same thing with AWS, We think we should be interconnected to everybody.

Speaker Change: And that's what we're attempting to do it in our multi cloud strategy.

Speaker Change: I think thats, what customers want so I'm optimistic that's the way the world will settle out we'll get rid of these fees for moving data from cloud to cloud and all the clouds will be interconnected and customers can pick their favorite service from their favorite cloud and mix and match whatever they want.

Speaker Change: Whatever they want to use and do it easily and seamlessly.

Yeah.

Speaker Change: Yeah. Thank you.

Speaker Change: Your next question comes from the line of Alex Zukin with Wolfe Research. Please go ahead.

Aleksandr J. Zukin: Your next question comes from the line of Aleks Zukin with Wolf Research. Please go ahead.

Aleksandr J. Zukin: Hey, guys. Thanks for taking the question I wanted to dive a bit deeper on just precisely how many deployment models you guys are offering for OCI because it feels as though that is getting particularly differentiated as we start to think of sovereign cloud Gov cloud more private cloud given the conservative posture for AI.

Aleksandr J. Zukin: Thanks for taking the question. I wanted to dive a bit deeper on I don't know precisely how many deployment models you guys are offering. It feels as though that is getting particularly, Sovereign Cloud, GovCloud, more private. Posture for AI and Data.

Speaker Change: And data privacy. So how do we think about how much of an advantage that is providing in sales cycles and maybe in that massive 30 plus billion dollars in the second half of <unk>, but also just comment on the magnitude of that opportunity going forward.

Unknown Executive: How do we think about how much of an advantage that is providing in sales cycles? And maybe in that, you know, massive 30 plus billion dollars in the second half RPO. But also just comment on the magnitude of that. I'm gonna I'm gonna take a swing at this one.

Speaker Change: I'm going to I'm going to take a swing at this one.

Speaker Change: We can.

Lawrence J. Ellison: Every medium-sized on-premise customer that Oracle has could have a private cloud, a full Oracle cloud, where they have no neighbors. They are the only user of that Oracle cloud, and we can install that on their existing data. Nobody else can do that.

Every medium size on premise customer that Oracle has could have a private cloud a full oracle cloud.

Speaker Change: Where they have no neighbors.

Speaker Change: The only user of that Oracle cloud and we can install that in their existing data centers.

Speaker Change: Nobody else can do that.

Speaker Change: You have to move to public cloud now.

Lawrence J. Ellison: You have to move to the public cloud. Now, we have public clouds; we have a lot of public cloud regions. We love the public cloud. But if you're very conservative, and you want to absolutely maximize security, and that's important to you, we can put in a cloud, a full Oracle cloud, and we run it, we pay for the hard drives, again, it's an Oracle region. We put an Oracle cloud region, and let me just make up a name, Samsung. We could build a cloud region for Samsung.

Speaker Change: We have public cloud, we have a lot of public cloud regions, we loved the public cloud, but if you were very conservative.

Speaker Change: And do you want them and you want them, absolutely maximize security and that's important to you.

Speaker Change: We can put in a cloud.

Speaker Change: Full Oracle cloud and we run it we pay for the heart again, its an Oracle region, we put in the Oracle cloud.

Cloud region, and let me just make up a name Samsung we could build a cloud region for Samsung in fact to cloud regions as for Samsung, We could do to cloud regions, making up names General Motors Ford.

Lawrence J. Ellison: In fact, two cloud regions for Samsung, we could do two cloud regions making up names like General Motors, Ford, anybody, any company. Those are pretty big companies, but much smaller companies as well. So we're the only ones to give you an option to have the full capability of a public cloud run by Oracle. All of our services, every single one of our services; you don't pay for the hardware; you just pay for what you use. Put that model directly on your premises, and you can use it, and no one else is in that cloud. We can do that. No one else can do it like you.

Speaker Change: Anybody any company those are pretty big companies, but much smaller companies as well.

Speaker Change: We're the only ones to give you an option.

Speaker Change: Behalf.

Speaker Change: The full capability of a public cloud run by Oracle All this all of our services every single one of our services.

Speaker Change: You don't pay pay for the hardware you just pay for what you use.

Lawrence J. Ellison: We can put them on ships and on submarines. No one else can do it, because we can start very, very small. All Oracle clouds are identical. Except for scale, all Oracle Clouds have all Oracle services. All Oracle Clouds are fully automated because they're identical.

Speaker Change: Put that model directly on your on your premises and you can use it and no. One else is in that cloud. We can do that no. One else can do it we can put it put them on ships then on submarines no one else can do it.

Speaker Change: Because we can start very very small oracle clouds are identical.

Speaker Change: Except for scale, they're all they all Oracle clouds have all Oracle services.

Speaker Change: All Oracle colleague clouds are fully automated because they're identical.

Speaker Change: They are fully automated so one of the reasons, we took a little bit longer to get our cloud out was because we built something quite different than what our competitors have.

Lawrence J. Ellison: So one of the reasons we took a little bit longer to get our cloud out was because we built something quite different than what our competitors have. And that allows us to go from very small to very large, using the same automation software. I think some of our competitors are large data centers, and some are quite different from other data centers. They might have different standards; some services might be available in some data centers and not in others.

Speaker Change: That allows us to go from very small to very large.

Speaker Change: Using the same automation software.

Speaker Change: I think some of our competitors there are larger there are large data centers. Some are quite different than other data centers. They might have different some services might be available in some data centers and not in others.

Lawrence J. Ellison: They're not; they took a very different approach to what we did. We had the advantage of seeing what all the other guys did. And we took a different road; it took us a bit longer, but we think we're better off in terms of security. We're better off in terms of scalability, by the way; that means the ability to go down in size and go up in size. It allows us to get to every corner of the globe and provide a level of privacy for your data that other cloud providers cannot provide.

They're not.

Speaker Change: It took a very different approach to what we did.

Speaker Change: We had the advantage of seeing what all the other guys did.

Speaker Change: And we took a different road it took us a bit longer but we think we're better off in terms of security, we're better off in terms of scalability by the way that means the ability to go down in size and up in size.

Speaker Change: It allows us to get to every corner of the globe and provide a level of privacy for your data that other.

Speaker Change: Other cloud providers cannot provide.

Speaker Change: Okay.

Unknown Executive: Yeah, and because, as Larry said, whatever the deployment model is, you don't have to compromise. Some of our competitors may offer some level of sovereignty or some level of connectivity, but they don't actually have all the services for us. And the reason we've been so successful is whether it's disconnected or sovereign or whatever it is, the customer always gets everything, all services, not just some services, and they get to deploy it any way they want.

Speaker Change: Yeah, and because as Larry said because.

Speaker Change: Whatever the deployment model is you don't have to compromise some of our competitors may offer some level of sovereignty or some level of disconnected, but they don't actually have all the services for us and the reason we've been.

Speaker Change: So successful is whether it's disconnected or sovereign or whatever it is the customer always gets everything all services not just some services and they get to deploy at any way they want and they get the security or the regulatory.

Unknown Executive: And they get the security or the regulatory requirements. Sovereignty may be very critical. And for most governments, they don't want their data in the public cloud out and about. They want to have it sovereign to their country. And so no compromises, no compromises on services, and no compromises on security.

Requirements sovereignty may be very critical and for most governments. They don't want their data in the public cloud out and about they want a habit sovereign to their country and and so no compromises no compromises on the services and no compromises on <unk>.

Speaker Change: <unk> already.

Speaker Change: It also sounds like you guys have a better price in most cases, so thanks very much.

Aleksandr J. Zukin: It also sounds like you guys have a better price in most cases, so thanks again.

Speaker Change: Sure.

Unknown Executive: Much. Because we're so much faster, when you use our cloud, it is new, it's modern, but it also has technical advantages. And so it runs your workload so much more quickly. And when you pay by the minute, the second, the hour, if your workload ends in a tenth of a time, you pay a tenth of the price. That's very hard to compete with.

Speaker Change: Much like us because for so much faster when you use our when you use our cloud it is new its modern but it also is technical advantages and so it runs your workload so much more quickly and when you pay by the minute the second the hour.

Speaker Change: If your workload and in attempts to the time you pay attempts to price that's very hard to compete with.

Speaker Change: One last one last comment.

Unknown Executive: One last, one last comment. One last comment.

Speaker Change: Okay.

Unknown Executive: The other thing is that our cloud was designed not for hundreds of regions but for thousands or possibly even tens of thousands of data centers in each region. That's why we had to put in a high degree of automation. There is no way we can run these that we could run these data centers manually. There are too many of them, and we're building them too fast. We couldn't hire people fast enough and train people fast enough, and the risk of them making a mistake is too great. An error is a risk.

Speaker Change: One last comment one last comment.

Speaker Change: The other thing is our cloud was designed not for hundreds of regions.

Speaker Change: But for thousands or possibly even tens of thousands of data centers in regions.

Speaker Change: That's why we had to put in a high degree of automation. There is no way. We can run these that we could run these data centers manually where there are too many of them and we're building them do back we couldn't hire people fast enough and trained people fast enough and the risk of them, making a mistake and air is the risky well start exposing our.

David: Customers David So they are highly automated it's a little bit like a.

Unknown Executive: Well, they start exposing our customers' data, so they are highly automated. It's a little bit like, if I flatter myself and compare it to the satellites that Elon Musk puts in the sky, Starlink has more, he has more satellites than everyone else in the world combined. Because again, it's a very different system. It's a satellite system, Starlink, that's designed for a very large number of satellites that are highly automated, and same model, lots and lots of them. 100% or nearly 100% automation to run these clouds. Your next question, with Evercore ISI? Yes, thanks very much. And I'll echo the congratulations on the cloud.

Speaker Change: Blatter myself and comparing it to the <unk>.

Speaker Change: <unk> said Elon musk puts in the sky.

Speaker Change: Starlink has.

He has more satellites and everyone else in the world combined.

Speaker Change: Because again, it's a very different it's a satellite system Sterling that's designed for a very large number of satellites that are highly automated.

Speaker Change: And the same model.

Speaker Change: Lots and lots of them.

Speaker Change: 100%, 100% or nearly a 100% automation to run these clouds.

Speaker Change: Your next question comes from Kirk <unk> with Evercore ISI. Please go ahead.

Kirk Materne: Your next question comes from Kirk Materne with Evercore ISI. Please go ahead.

Speaker Change: Yes, thanks, very much and I'll echo the congrats on the cloud momentum Larry Safra I was worried you just expand a bit on the opening of our announcement. This afternoon, just what that entails in terms of how you'll be working with them or Microsoft are there certain workloads they'll be working on with you directly can you just give us whatever additional color.

Speaker Change: There you can on that deal obviously very exciting.

Speaker Change: Okay.

Speaker Change: Well, Yes go ahead go ahead no you can't you can go ahead.

Kirk Materne: Go ahead, go ahead, no, you can, you can go ahead. Okay, all right. Um, well, you know.

Lawrence J. Ellison: Okay. All right. Well, we're building a very, very large data center, very big, about half of a huge data center, we're building for them. Lots of NVIDIA chips, the new NVIDIA chips, the new NVIDIA interconnect, liquid cooled, and they're primarily for training. I mean, not inferencing. It's for doing masses and masses of training. I don't know.

Speaker Change: Alright.

Speaker Change: Well, yes.

Speaker Change: Sure.

Speaker Change: Building a very very.

Speaker Change: Large data center very big.

Speaker Change: But half of that happened with the huge data center, we're building for them.

Speaker Change: Lots of them lots.

Speaker Change: Lots of Nvidia chips, the new Nvidia chips the new.

Speaker Change: The new Nvidia interconnect.

Speaker Change: Liquid cooled.

Speaker Change: And there.

Speaker Change: Primarily for training I mean, not in for instance, it's.

Speaker Change: Doing masses and masses of training.

Speaker Change: And I don't know that.

Lawrence J. Ellison: That's what we're doing. And the training, you know, the training goes beyond languages, because now these systems are, even though they're called large language models, the proper name is probably neural networks. They're neural networks, and they're trained not just on language but masses of images as well. For example, Oracle is very involved in taking biopsy slides and using microscopes to read biopsy slides, recording those images, and then using AI to diagnose cancer from these biopsies. One of the projects we're working on on the medical side of our business.

Speaker Change: That's where we are doing them in the training the training goes beyond languages, because now nowadays these systems are even though causal even though they are called large language models. They really probably the proper name is probably neural networks neural networks and they're trained not just with language, but Matt masses of images as well for example, oral.

Speaker Change: Will is very involved.

Speaker Change: With.

Speaker Change: Taking a biopsy biopsy slides and using microscopes to re biopsy slides recording those images and then using AI to diagnose cancer from these biopsies.

Speaker Change: The projects, we're working on and on the medical side of our business and these.

Lawrence J. Ellison: And these large language models, strangely enough, are also looking at biopsies. They're not just reading things, language; they're also looking at images and interpreting images. So that is actually a bigger and more complicated problem than understanding language. That's what's so exciting about, again, the second time I've mentioned Elon and the Elon company. Tesla is very close to getting full-service driving authorized in China, but I'm not speaking out of school. I think the Chinese government is moving along with full self-driving in China.

Speaker Change: These large language models strangely enough. We're also looking at biopsies Theyre not just reading thing language, they're also looking at images and interpreting images.

Speaker Change: So that that is actually a bigger and more complicated problem that understanding language.

Speaker Change: That's what's so exciting about again second time, I've mentioned Ilan and Aneel on company Tesla is very close to getting full service driving authorized in China.

Speaker Change: I'm not speaking out of school I think I think the Chinese government's maybe moving along.

Speaker Change: The full self driving self driving and China in order to train a cardi b full self driving you traded on vast amounts of images because the car has to look at these images and then decide what it's going to do next that's what it does it doesn't speak it as it responds to what it sees.

Lawrence J. Ellison: In order to train a car to do full self-driving, you train it on vast amounts of images because the car has to look at these images and then decide what it's going to do next. That's what it does. It doesn't speak. It just responds to what it sees. That's a very different problem than answering a question, and we're opposed to any one. So everyone's going to be training their models on imaging, that's a huge amount of additional data, it's a huge amount of additional training, and we're right in the middle of it.

Speaker Change: That's a very different problem than answering a question.

Speaker Change: Austin.

Speaker Change: Opposed in anyway.

Speaker Change: So.

Speaker Change: Everyone's speaking is going to be training in their models on imaging. That's a huge amount of additional data, it's a huge amount of additional training.

Speaker Change: And.

Speaker Change: We're right in the middle of it.

Okay.

Thank you.

Speaker Change: Your final question today comes from John <unk> with Guggenheim Securities. Please go ahead.

John Stephen DiFucci: Your final question today comes from John DiFucci with Guggenheim Security.

Speaker Change: Okay.

John Stephen DiFucci: Thank you for taking my question. My question, I think, is for Safra. Safra, the IAS revenue growth has been really impressive, and it has been for a while here. But perhaps even more so, the last couple of quarters, especially, the backlog, given its scale. And this may be somewhat of an obvious question for you, but it's based on my conversation with investors. There are two high-profile topics that I want to make sure we understand what the contribution has been today versus next year.

John Stephen DiFucci: Thank you for taking my question. My question I think it's for Safra Safra. The Ais revenue growth has been really impressive.

Speaker Change: It has been for a while here, but perhaps even more so the last couple of quarters, especially as the backlog given its scale and this may be somewhat of an obvious question for you, but it's based on my conversations with investors. There's two high profile topics that I want to make sure we understand what the contribution has been today versus.

Speaker Change: Next year and Thats Oracle database at Azure into AI in general we've heard a lot of conversation about the former when we speak to partners and customers in the field and you've spoken a lot about the ladder today. So beyond conversation volume can you talk a little bit more about what the contribution of these two topics has been to that impressive.

John Stephen DiFucci: And that's Oracle Database at Azure and AI in general. We've heard a lot of conversations about the former when we speak to partners and customers in the field. And you've spoken a lot about the latter today. So, beyond conversation volume, can you talk a little bit more about what the contribution of these two topics has been to that impressive IAS revenue growth in this quarter versus what we should expect that contribution to be in fiscal?

Speaker Change: Revenue growth in this quarter versus what we should expect that contra to be contribution to be in fiscal 'twenty five.

Safra Ada Catz: Okay, I would tell you that both of them, whether it's Database at Azure or even the AI workloads as they come on board, they are all incremental to anything you see so far in our revenues, okay? The Database at Azure, those centers are just going live now.

Speaker Change: Okay, I would tell you that both of them both whether its database that asher.

Speaker Change: Or even the AI workloads as they come on board. They are all incremental to anything you saw so far in our revenues okay.

Safra Ada Catz: So even though we are selling quite a bit of ARR there, these are small and growing very, very fast. So the revenue in Q4 of, let's say, Azure was very small. Q1 will be 10 times as much, and Q2 will be potentially 30 times as much. So it is extremely incremental to our current run rate. By the way, that is also true to, we've already got revenue, AI revenue so far. Yes, we do!

Speaker Change: The database at Azure those centers are just going live now so even though we are selling quite a bit of a a or are there. These are small and growing very very fast. So the revenue in Q4 of <unk>.

Speaker Change: Let's say Azure, which is very small Q1 will be 10 times as much.

Speaker Change: Q2 will be.

Speaker Change: Potentially 30 times as much. So it is extremely incremental to our current run rate by the way that is also true to it we've already we have revenue AI revenue. So far yes, we do and we've been announcing those these contract that we have.

Safra Ada Catz: And we've been announcing those. These contracts that we are signing, that we signed at the end of Q3 and that will be signed at the end of Q4, are so much larger in size that they will be incremental. Everything you saw this past year has literally, incrementally added up by quite a bit. So it is going to be, this is a very exciting time, obviously, and everything is incremental to what you've seen so far because it dwarfs it in many ways.

Speaker Change: Signing that we've signed at the end of Q3 and that are signed at the end of Q4 are so much larger.

Speaker Change: Size is that they would be incremental.

Speaker Change: Everything you saw this past year literally incremental added by quite a bit so it.

Speaker Change: It is it is going to be this is this is a very exciting time, obviously and everything is incremental to what you've seen so far.

Speaker Change: Cause it dwarfs it in many ways.

John Stephen DiFucci: That that is really clear, and it it really is

Speaker Change: That is really clear.

John Stephen DiFucci: And it really speaks to, I think, what you started talking about a long time ago, especially a lot more publicly. She's, I don't know, in the fall of 22. But thanks, thanks, that's really clear.

Speaker Change: It.

Speaker Change: It really speaks to.

Speaker Change: I think what you started talking about a long time ago.

Speaker Change: Firstly, a lot more publicly Keith.

Speaker Change: Geez I don't know in the fall of 'twenty two.

Speaker Change: Thanks, that's really clear.

John: Thank you John.

Operator: A telephonic replay of this conference call will be available for 24 hours on the Investor Relations website. Thank you for joining us today. And with that, I'll turn the call back to Krista for closing.

Speaker Change: A telephonic replay of this conference call will be available for 24 hours on the Investor Relations website. Thank you for joining us today and with that I'll turn the call back to Christopher closing.

Operator: Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation, and you may now disconnect.

Speaker Change: Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation and you may now disconnect.

Speaker Change: Okay.

Speaker Change:

Speaker Change: Okay.

Speaker Change:

Speaker Change:

Speaker Change: Okay.

Speaker Change: Okay.