Q3 2026 Oracle Corp Earnings Call

March 10, 2026

Speaker #1: Corporation third quarter fiscal year 2026 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.

Speaker #1: If you would like to ask a question during this time, simply press star, then the number 1 on your telephone keypad. To withdraw your question, press star 1 again.

Speaker #1: We kindly ask that you please limit yourself to one question. I would now like to turn the conference over to Ken Bond, Head of Investor Relations.

Speaker #1: Hello and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Oracle Corporation third-quarter fiscal year 2026 earnings conference call.

Operator: Hello, and thank you for standing by. My name is Regine, and I will be your conference operator today. At this time, I would like to welcome everyone to the Oracle Corporation Q3 Fiscal Year 2026 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a Q&A session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. To withdraw your question, press star one again. We kindly ask that you please limit yourself to one question. I would now like to turn the conference over to Ken Bond, Head of Investor Relations. Please go ahead.

Speaker #1: Please go ahead.

Speaker #2: Thank you, Regina. Good afternoon, everyone. Welcome to Oracle's third quarter fiscal year 2026 earnings conference call. On the call today are Chairman and Chief Technology Officer Larry Ellison, Chief Executive Officer Clay Magouyrk, Chief Executive Officer Mike Sicilia, and Principal Financial Officer Doug Kerring.

Speaker #1: All lines have been placed on.

Speaker #1: To withdraw your question, press star 1 again. We kindly ask that you please limit yourself to one question. I would now like to turn the conference over to Ken Bond, head of investor relations.

Speaker #2: A copy of the press release and financial tables, which includes supplemental financial details on our most recent quarter, guidance for our future results, a gap-to-nongap reconciliation, and a selected list of customers who purchased Oracle Cloud services or went live on Oracle Cloud recently, will be available from our investor relations website.

Ken Bond: Thank you, Regine. Good afternoon, everyone. Welcome to Oracle's Q3 fiscal year 2026 Earnings Conference Call. On the call today are Chairman and Chief Technology Officer Larry Ellison, Chief Executive Officer Clay Magouyrk, Chief Executive Officer Mike Sicilia, and Principal Financial Officer Doug Kehrung. A copy of the press release and financial tables, which includes supplemental financial details on our most recent quarter, guidance for our future results, a GAAP to non-GAAP reconciliation, and a selected list of customers who purchased Oracle Cloud services or went live on Oracle Cloud recently, will be available from our investor relations website. As a reminder, today's discussion will include forward-looking statements, and we will discuss some important factors relating to our business. These forward-looking statements are also subject to risks and uncertainties that may cause actual results to differ materially from the statements being made today.

Speaker #2: everyone. Welcome to Oracle's third quarter fiscal year 2026 earnings conference call. On the call today are Chairman and Chief Technology Officer Larry Ellison, Chief Executive Officer Clay McGeork, Chief Executive Officer Mike Cecilia, and Principal Financial Officer Doug Kerring.

Speaker #2: As a reminder, today's discussion will include forward-looking statements, and we will discuss some important factors relating to our business. These forward-looking statements are also subject to risks and uncertainties that may cause actual results to differ materially from the statements being made today.

Speaker #2: A copy of the press release and financial tables, which includes supplemental financial details on our most recent quarter, guidance for our future results, a GAAP-to-non-GAAP reconciliation, and a selected list of customers who purchased Oracle Cloud services or went live on Oracle Cloud recently, will be available from our investor relations website.

Speaker #2: As a result, we caution you from 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.

Speaker #2: Finally, we are not obligating ourselves to revise our results or these forward-looking statements in light of new information or future events. Before we go to the Q&A portion of the call, we'll begin with a few prepared remarks, and with that, I'll turn it over to Doug.

Speaker #3: Thanks, Ken. Let me start by highlighting the changes we are making to our earnings press release and this call. In the press release, we have laid out clearly and explicitly the supplemental financial metrics that we otherwise would have provided on the earnings call so that each of you has the information in writing and in advance.

Ken Bond: As a result, we caution you from placing undue reliance on these forward-looking statements, and we encourage you to review our most recent reports, including our 10-K, 10-Q, and any applicable amendments. Finally, we are not obligating ourselves to revise our results or these forward-looking statements in light of new information or future events. Before we go to the Q&A portion of the call, we'll begin with a few prepared remarks. With that, I'll turn it over to Doug.

As a reminder, today's discussion will include forward-looking statements and we will discuss some important factors relating to our business. These forward-looking statements are also subject to risks and uncertainties that may cause actual results to differ materially from the statements being made today as a result, we caution you from placing undue Reliance on these forward-looking statements and we encourage you to review our most recent reports including our 10K and 10 q and any applicable amendments.

Speaker #3: Then, as it relates to our approach to the earnings call itself, I will be very brief and then turn it over to Mike and Clay to provide more substantial thoughts on our business.

Speaker #3: After which, all of us, including Larry, will be available to take questions. In terms of the results for Q3, we had a tremendous quarter that exceeded expectations across the board.

Doug Kehring: Thanks, Ken. Let me start by highlighting the changes we are making to our earnings press release and this call. In the press release, we have laid out clearly and explicitly the supplemental financial metrics that we otherwise would have provided on the earnings call, so that each of you has the information in writing and in advance. As it relates to our approach to the earnings call itself, I will be very brief and then turn it over to Mike and Clay to provide more substantial thoughts on our business. After which, all of us, including Larry, will be available to take questions. In terms of the results for Q3, we had a tremendous quarter that exceeded expectations across the board.

Finally, we are not obligating ourselves to revise our results or these forward-looking statements in light of new information or future events before we go to the Q&A. Portion of the call, we'll begin with a few for Burger marks. And with that, I'll turn it over to Doug.

Thanks Ken.

Speaker #3: Our momentum continues to accelerate with Q3 being the first quarter in over 15 years where both organic total revenue and organic non-gas EPS grew at 20% or better in USD.

Let me start by highlighting the changes. We are making to our earnings press release and this call,

Speaker #3: As we highlighted in the press release, I'll quickly mention a couple of things and then hand the call over to our CEOs. First, in January, TikTok US completed the separation of its US data operations from ByteDance into an independent company in which Oracle now holds a 15% equity stake along with a seat on the board.

In the press release, we have laid out clearly clearly and explicitly. The supplemental, Financial metrics that we, otherwise would have provided on the earnings call. So that each of you has the information in writing and in advance

Then, as it relates to our approach to the earnings call itself, I will be very brief and then turn it over to Mike and Clay to provide more substantial thoughts on our business.

After which all of us including Larry will be available to take questions.

Doug Kehring: Our momentum continues to accelerate, with Q3 being the first quarter in over 15 years, where both organic total revenue and organic non-GAAP EPS grew at 20% or better in USD, as we highlighted in the press release. I'll quickly mention a couple of things and then hand the call over to our CEOs. First, in January, TikTok US completed the separation of its US data operations from ByteDance into an independent company, in which Oracle now holds a 15% equity stake, along with a seat on the board. In terms of impact to our financials, there is no impact to the revenue related to the services we have been providing as their technology vendor. That is to the equity investment.

Speaker #3: In terms of impact to our financials, there is no impact to the revenue related to the services we have been providing as their technology vendor.

In terms of the results for Q3. We had a tremendous quarter that exceeded expectations across the board.

Speaker #3: That is continuing as it was. As it relates to the equity investment, we will be accounting for this under the equity method, and we will recognize our share of the new company's earnings for the period from the close of the investment in late January to March 31st in our Q4 results.

Our momentum continues to accelerate, with Q3 being the first quarter in over 15 years where both organic total revenue and organic non-GAAP EPS grew at 20% or better in USD, as we highlighted in the press release.

I'll quickly mention a couple of things and then hand the call over to our CEO.

Speaker #3: As there is a two-month reporting period time lag, it will be recorded as non-operating income or loss on our income additive to our financials.

First, in January, TikTok US completed the separation of its US data operations from ByteDance into an independent company, in which Oracle now holds a 15% equity stake along with a seat on the board.

Speaker #3: Second, in February, we announced our intent to raise up to $50 billion in debt and equity financing along with a statement that we do not expect to issue any additional bonds beyond this amount in calendar year 2026.

Doug Kehring: We will be accounting for this under the equity method, and we will recognize our share of the new company's earnings for the period from the close of the investment in late January to 31 March in our Q4 results, as there is a two-month reporting period time lag. It will be recorded as non-operating income or loss on our income statement and is incremental and additive to our financials. Second, in February, we announced our intent to raise up to $50 billion in debt and equity financing, along with a statement that we do not expect to issue any additional bonds beyond this amount in calendar year 2026. Within days of the announcement, we raised $30 billion through a combination of investment-grade bonds and mandatory convertible preferred stock with a record order book that was substantially oversubscribed.

In terms of impact to our financials, there is no impact to the revenue related to the services we have been providing as their technology vendor.

Speaker #3: Within days of the announcement, we raised $30 billion through a combination of investor-grade bonds and mandatory convertible preferred stock. With a record order book that was substantially oversubscribed, as noted in our release, we have not yet initiated the at-the-market equity portion of the financing program.

to the equity investment. We will be accounting for this under the equity method and we will recognize our share of the new companies earnings for the period from the close of the investment in late January to March 31st in our Q4 results as there is there is a 2 months reporting period time lag.

It will be recorded as non-operating income or loss on our income statement, and as incremental and additive to our financials,

Second in February.

Speaker #3: Finally, I'd be remiss not to remind everyone we are reporting our financial results just 10 days after the last day of the quarter despite the increasing size and complexity of our business.

Speaker #3: Using Oracle Fusion, we continue to close and file our financial results faster than any other company in the S&P 500. Providing us with a significant strategic advantage as well as an opportunity to help our fusion customers do the same with their businesses.

In February, we announced our intent to raise up to $1 billion in debt and equity financing, along with a statement that we do not expect to issue any additional B Bonds beyond this amount in calendar year 2026.

Doug Kehring: As noted in our release, we have not yet initiated the at-the-market equity portion of the financing program. Finally, I'd be remiss not to remind everyone. We are reporting our financial results just 10 days after the last day of the quarter, despite the increasing size and complexity of our business. Using Oracle Fusion, we continue to close and file our financial results faster than any other company in the S&P 500, providing us with a significant strategic advantage as well as an opportunity to help our Fusion customers do the same with their businesses. With that, let me now turn the call over to Mike.

Within days of the announcement, we raised billion dollars through a combination of investment grade, bonds, and mandatory. Convertible preferred stock with a record order book that was substantially over subscribed.

Speaker #3: With that, let me now turn the call over to Mike.

Speaker #2: Thanks, Doug. And as Doug just detailed, we really had an excellent quarter across the board and continue to see strong execution. So let me say a few words about our applications business.

Speaker #2: Oracle has the fastest growing, most complete suite of cloud applications in the market. Full stop. Our SaaS solutions are industry-complete platforms with highly scalable, trusted, secure, and regulatory-compliant systems and processes in which our customers trust us to run the systems that run their businesses.

As noted in our release, we have not yet initiated the at the market Equity portion of the financing program. Finally, I'd be remiss, not to remind everyone. We are reporting our financial results. Just 10 days after the last day of the quarter, despite the increasing size and complexity of our business.

Faster than any other company in the S&P 500.

Providing us with a significant strategic advantage, as well as an opportunity to help our Fusion customers do the same with their businesses.

Mike Sicilia: Thanks, Doug. And as Doug just detailed, we really had an excellent quarter across the board and continue to see strong execution. Let me say a few words about our applications business. Oracle has the fastest-growing, most complete suite of cloud applications in the market, full stop. Our SaaS solutions are industry-complete platforms with highly scalable, trusted, secure, and regulatory compliance systems and processes in which our customers trust us to run the systems that run their businesses. In constant currency, cloud applications revenue was up 11% of the quarter, reaching an annualized run rate of $16.1 billion. Within that, Fusion ERP was up 14%, Fusion SCM up 15%, Fusion HCM up 15%, Fusion CX up 6%. NetSuite was up 11%.

Speaker #2: In constant currency cloud applications, revenue was up 11% in the quarter, reaching an annualized run rate of 16.1 billion dollars. Within that fusion ERP was up 14%, fusion SCM up 15%, fusion HCM up 15%, fusion CX up 6%, NetSuite was up 11%, industry SaaS solutions for hospitality, construction, retail, banking, restaurants, local governments, and telecommunications combined were up 19%.

With that, let me now turn the call over to Mike. Thanks, Doug. Uh, and as Doug just detailed, we really had an excellent quarter, uh, across the board and continue to see strong execution. So let me say a few words about our applications business.

Oracle has the fastest growing most complete Suite of cloud applications in the market. Full. Stop our SAS Solutions are industry complete platforms with highly, scalable, trusted secure, and Regulatory Compliance systems and processes.

In which our customers can trust us to run the systems that run their businesses.

Speaker #2: So certainly, very happy with the applications growth in the quarter. In the context of that, I'll say a few words about the reported SaaS pop-ups.

Speaker #2: You've all heard the theses or theory that new companies coding quickly using AI will spell the death of SaaS. I don't agree with that at all.

Mike Sicilia: Industry SaaS solutions for hospitality, construction, retail, banking, restaurants, local governments, and telecommunications combined were up 19%. Certainly, very happy with the applications growth in the quarter. In the context of that, I'll say a few words about the reported SaaS apocalypse. You've all heard the thesis or theory that new companies coding quickly using AI will spell the death of SaaS. I don't agree with that at all. I do think that AI tools and their coding capabilities would be a threat if we weren't adopting them, but we are, and very rapidly. Oracle is using the best AI coding tools and the best developers not only to accelerate our SaaS business, but to deliver solutions that enable entire ecosystems across numerous industries.

Speaker #2: I do think that AI tools and their coding capabilities would be a threat if we weren't adopting them, but we are, and very rapidly.

Speaker #2: Oracle is using the best AI coding tools and the best developers not only to accelerate our SaaS business, but to deliver solutions that enable entire ecosystems across numerous industries.

In constant currency, cloud applications revenue was up 11% for the quarter, reaching an annualized run rate of $16.1 billion. Within that, Fusion ERP was up 14%, Fusion SCM up 15%, Fusion HCM up 15%, and Fusion CX up 6%. NetSuite was up 11%. Industry SaaS solutions for hospitality, construction, retail, banking, restaurants, local governments, and telecommunications combined were up 19%.

Speaker #2: The use of AI coding tools inside Oracle is enabling smaller engineering teams to deliver more complete solutions to our customers more quickly. We are building brand new SaaS products using AI and also embedding AI agents right into our existing applications suites.

So uh certainly uh very happy with the applications growth in the quarter in the context of that. Uh, I'll say a few words about the reported SAS apocalypse. Uh, you've all heard that the the thesis or theory that new companies coding quickly. Using AI will spell the death obsess

I don't agree with that at all.

I do think that AI tools and their coding capabilities would be a threat if we weren't adopting them, but we are—and very rapidly.

Speaker #2: By embracing AI with small engineering teams, we have just built three brand new CX applications. Lead generation and qualification, sales orchestration, and automated selling, and our new website generator.

Mike Sicilia: The use of AI coding tools inside Oracle is enabling smaller engineering teams to deliver more complete solutions to our customers more quickly. We are building brand new SaaS products using AI and also embedding AI agents right into our existing applications suites. By embracing AI with small engineering teams, we have just built three brand new CX applications, lead generation and qualification, sales orchestration, and automated selling, and our new website generator. In fact, we just used the website generator to build and launch the new oracle.com. We've built these new CX products to help our customers sell, not simply to administer a forecast or generate email opens. These are three products that Salesforce.com does not have. Of course, Salesforce.com also doesn't have OCI, the AI Data Platform, Fusion ERP, and complete industry suites. Complete AI-powered, end-to-end ecosystem automation platforms are quite unique to Oracle.

Speaker #2: In fact, we just used the website generator to build and launch the new Oracle.com. We've built these new CX products to help our customers sell, not simply to administer a forecast or generate email opens, these are three products that Salesforce.com does not have.

Speaker #2: And of course, Salesforce.com also doesn't have OCI, the AI data platform, fusion ERP, and complete industry suites. Complete AI-powered end-to-end ecosystem automation platforms are quite unique to Oracle.

Oracle is using the best AI, coding tools, and the best developers, not only to accelerate our SaaS business, but to deliver solutions that enable its higher ecosystems across numerous industries. The use of AI coding tools inside Oracle is enabling smaller engineering teams to deliver more complete solutions to our customers more quickly. We are building brand new SaaS products using AI and also embedding AI agents right into our existing application suites.

Speaker #2: In addition to that, we've already delivered well over 1,000 agents right inside our horizontal back office and industry applications. This doesn't even include the agents that our customers are building themselves or the fleet of agents that we're using internally.

By embracing AI with small engineering teams. We have just built 3, brand new CX applications lead generation and qualification sales, orchestration and automated selling and our new website generator. In fact, we just use the website generator to build and launch. The new oracle.com. We've built these new CX products to help our customers sell, not simply that administer. A forecast or generate email opens. These are 3 products that

Speaker #2: These are AI features built right into our applications and existing processes. And a great example, I think, is in healthcare, where our brand new AI-powered ambulatory EHR, electronic health record system, is live in the market, and the results are quite clear.

Mike Sicilia: In addition to that, we've already delivered well over 1,000 agents right inside our horizontal back office and industry applications. This doesn't even include the agents that our customers are building themselves or the fleet of agents that we're using internally. These are AI features built right into our applications and existing processes. A great example, I think, is in healthcare, where our brand new AI-powered inventory EHR, electronic health record system, is live in the market, and the results are quite clear. We are reducing administrative overhead, we're allowing clinicians to see more patients, we're improving access to care, and we're increasing provider satisfaction. In another example, in banking, we provide a comprehensive AI-powered SaaS platform, including everything from commercial banking, retail banking, investment banking, anti-money laundering, financial crimes and compliance, payments, supply chain financing, CX, ERP, and HCM.

Salesforce.com does not have—and, of course, salesforce.com also doesn't have—OCI. The AI Data Platform, Fusion ERP, and complete industry suites. Complete AI-powered end-to-end ecosystem automation platforms are...

Speaker #2: We are reducing administrative overhead. We're allowing clinicians to see more patients. We're improving access to care, and we're increasing provider satisfaction. In another example, in banking, we provide a comprehensive AI-powered SaaS platform, including everything from commercial banking, retail banking, investment banking, anti-money laundering, financial crimes and compliance, payments, supply chain financing, CX, ERP, and HCM.

Quite unique to Oracle. In addition to that, we've already delivered well over 1,000 agents.

Speaker #2: That banking suite alone contains hundreds of embedded AI agents, all available at no additional cost to our customers. In retail, our AI-enabled solutions span merchandising, assortment planning, supply chain management, point of sale, commerce, and of course, ERP, CX, and HCM.

Right. Inside our horizontal back office and industry applications—this doesn't even include the agents that our customers are building themselves, or the fleet of agents that we're using internally. These are AI features built right into our applications and existing processes. And a great example, I think, is in healthcare, where our brand new AI-powered ANDI EHR, electronic health record system, is live in the market, and the results are quite clear. We are reducing administrative overhead, we're allowing clinicians to see more patients, and we're improving access to care.

Speaker #2: In summary, these are not systems that can be replaced by a small collection of niche features cobbled together and bolted on in the name of AI.

Speaker #2: So yes, some smaller or single-focused SaaS players may well be disrupted, but Oracle will not be among them. Now let me focus on a few key wins in Q3 in the applications space.

Mike Sicilia: That banking suite alone contains hundreds of embedded AI agents, all available at no additional cost to our customers. In retail, our AI-enabled solutions span merchandising, assortment planning, supply chain management, point-of-sale, commerce, and of course, ERP, CX, and HCM. In summary, these are not systems that can be replaced by a small collection of niche features cobbled together and bolted on in the name of AI. So yes, some smaller or single-focused SaaS players may well be disrupted, but Oracle will not be among them. Now let me focus on a few key wins in Q3 in the application space. By all means, this is a very short list, not an exhaustive list. Memorial Hermann Health System selected Fusion ERP, SCM, and HCM. This was a win over Workday. University of New South Wales also selected Fusion ERP and HCM. Also a win over Workday.

Speaker #2: And by all means, this is a very short list, not an exhaustive selected fusion ERP. SCM and HCM. This was a win over Workday.

And we're increasing provider satisfaction. In another example, in banking, we provide a comprehensive AI-powered SaaS platform, including everything from commercial banking and retail banking, investment banking, anti-money laundering, financial crime to compliance, payments, supply chain financing, CX, ERP, and HCM. That banking suite alone contains hundreds of embedded AI agents, all available at no additional cost to our customers. In retail, our AI-enabled solutions span merchandising, assortment planning, supplies.

Supply Chain Management, Point of Sale, Commerce, and of course, CRP, CX, and HCM.

Speaker #2: University of New South Wales also selected fusion ERP. And HCM. Also a win over Workday. Greg Media selected fusion EPM and ERP. A win again over Workday and also over SAP.

In summary, these are not systems that can be replaced by a small collection of niece features, cobbled together and bolted on in the name of AI.

Speaker #2: Invest Tech Bank selected fusion EPM and ERP. Over SAP. HID Global Corporation also selected fusion ERP and SCM. Over SAP. Ethiopian Shipping and Logistics Services Enterprises selected fusion ERP.

So yes some smaller or single focused SAS players May well be disrupted, but Oracle will not be among them.

Speaker #2: SCM. And HCM. Again, over SAP. A major Wall Street bank elected to standardize on fusion ERP for the entirety of their business, and all of their business units replacing SAP full stop.

Seen at ACM. This was a win over Workday.

Mike Sicilia: Gray Media selected Fusion EPM and ERP, a win again over Workday, and also over SAP. Investec Bank selected Fusion EPM and ERP over SAP. HID Global Corporation also selected Fusion ERP and SCM over SAP. Ethiopian Shipping and Logistics Services Enterprise selected Fusion ERP, SCM, and HCM, again over SAP. A major Wall Street bank elected to standardize on Fusion ERP for the entirety of their business and all of their business units, replacing SAP full stop. Loudoun County Public Schools selected Fusion ERP, EPM, HCM, and SCM. The J.M. Smucker Company selected Fusion ERP and EPM. Westfield Insurance picked Fusion ERP, EPM, HCM, and procurement. Mitsubishi UFJ Financial Group, an existing cloud customer and database customer, they are now moving into both our Fusion ERP and industry SaaS applications.

University of New South Wales also selected Fusion, ERP, and HCM—also a win over Workday.

Speaker #2: Loudoun County Public Schools selected fusion ERP, EPM, HCM, and SCM. The JM Smucker Company selected fusion ERP and EPM. Westfield Insurance picked fusion ERP.

Grey Media selected Fusion, EPM, and ERP—a win again over Workday, and also over SAP. Investec Bank selected Fusion, EPM, and ERP over SAP.

Speaker #2: EPM. HCM. And procurement. Mitsubishi UFG Financial Group is an existing clouded customer and database customer. They are now moving into both our fusion ERP and industry SaaS applications.

HID Global Corporation also selected Fusion ERP and SCM over SAP.

Speaker #2: SDC Kuwait an existing major tech customer is moving EBS to the cloud to support their growth. So just this very small list of major applications wins in the quarters.

Ethiopian Shipping and Logistics Services Enterprises selected Fusion ERP, SCM, and HCM. Again, over SAP, a major Wall Street bank elected to standardize on Fusion ERP for the entirety of their business and all of their business units, replacing SAP. Full stop.

Speaker #2: In the quarter, we had over 2,000 customers go live in Q3. 2,000 customers when you think about our industry applications and our fusion applications put together over 2,000 a month to live.

Speaker #2: And more importantly, we continue to see the median time to live decrease. A very small sample of go-lives in the quarter. Hearst expanded their ERP with EPM as well as HCM.

Mike Sicilia: stc Co., Kuwait, an existing major tech customer, is moving EBS to the cloud to support their growth. Just this very small list of major applications wins in the quarters. In the quarter, we had over 2,000 customers go live in Q3. 2,000 customers. When you think about our industry applications and our Fusion applications put together, over 2,000 of them went live. More importantly, we continue to see the median time to live decrease. A very small sample of go lives in the quarter. Hearst expanded their ERP with EPM as well as HCM. J.M. Huber Company is now live across Fusion ERP and SCM. Emirates Health Services went live with HCM, which enabled a comprehensive HR, payroll, and talent suite to elevate their workforce management.

Speaker #2: JM Huber Company has allowed live across fusion ERP and SCM. Emirates Health Services went live with HCM, which enabled a comprehensive HR, payroll, and talent suite to elevate their workforce management.

Loudoun County Public Schools selected Fusion ERP, EPM, HCM, and SCM. The J.M. Smucker Company selected Fusion ERP and EPM. Westfield Insurance picked Fusion ERP, EPM, HCM, and Procurement. Miss Abisha, UFG Financial Group, is an existing cloud customer and database customer. They are now moving into both our Fusion ERP and industry SaaS applications. SDC code, uh, Kuwait.

An existing major tech customer is moving EBS to the cloud to support their growth. So just this very small list of major applications of wins in the quarters.

Speaker #2: Niagara Bottling went live on SCM, moving from on-premises ERP to fusion. Sea Drill is now live across ERP, HCM, SCM, and EPM. Again, with 2,000 go-lives in the quarter, that's just a very, very short list of go-lives, but you can see hopefully not only momentum, but multi-pillar momentum with these customers.

In the quarter, we had over 2,000 customers go live. In Q3, 2,000 customers. When you think about our industry applications and our Fusion applications put together, over 2,000 a month go live. And more importantly,

Speaker #2: I also have an equally short list compared to the overall list of key tech wins in Q3. Lockheed Martin selected OCI, high-performance compute to scale AI across their environments efficiently.

Mike Sicilia: Niagara Bottling went live on SCM, moving from on-premises ERP to Fusion. Seadrill is now live across ERP, HCM, SCM, and EPM. Again, with 2,000 go lives in the quarter, that's just a very, very short list of go lives. But you can see hopefully not only momentum, but multi-pillar momentum with these customers. I also have an equally short list compared to the overall list of key tech wins in Q3. Lockheed Martin selected OCI High Performance Computing to scale AI across their environment efficiently. Rhombus selected OCI Compute, networking, and storage for AI video and security across all of their workloads. Lucid Motors selected OCI Core Services for data and connectivity in order to expand into European markets. Infomart in Japan selected OCI for their mission-critical B2B platform. Claro Brasil selected OCI Alloy for sovereign AI.

Speaker #2: Rhombus selected OCI compute, networking, and storage for AI video and security across all of their workloads. Lucid Motors selected OCI core services for data and connectivity in order to expand into European markets.

Speaker #2: Infomart in Japan selected OCI for their mission-critical B2B platform. Claro Brazil selected OCI alloy for sovereign AI. Air France KLM, which is a multi-cloud win, featuring a win for the Oracle database at Azure, and that led to a 13X performance improvement at a significantly lower cost for Air France KLM.

Speaker #2: Activision Blizzard, an existing Oracle e-business suite, was also an Oracle database at Azure win. Oracle's embrace of AI across our strategic applications is leading to broader enterprise conversations with our customers involving our full stack.

We continue to see the median, time to live decrease, a very small sample of go lives in the quarter, Hurst expanded their Erp with Enterprise with EPM, as well as HCM. Uh, JM Huber company, is now a lot of plus Fusion Erp and SCM Emirates Health Services, went live with HCM, which enabled a comprehensive HR, payroll and talent Suite Suite to elevate their Workforce man management. Niagara Bottling went live on on SCM, moving from on premises, uh, Erp to fusion seed, drill is now live across Erp, HCM, fcm and EPM. Again, a variable with 2000 of the lives in the quarter. That's just a very, very short list of, uh, of go lives but you can see hopefully, uh, not only momentum, but multi momentum, uh, with these customers. I also have a equally short list compared to the overall list of key Tech wins in Q3 Lockheed Martin selected. Oci high performance compute to scale AI across their environments. Sufficiently rhombus selected, oci compute, networking and storage for AI video and security.

Across all of their workloads.

Lucid Motors selected OCI core services for data and connectivity in order to expand into European markets. Infomart, in Japan,

Mike Sicilia: Air France-KLM, which is a multi-cloud win, featuring a win for the Oracle Database at Azure, and that led to a 13x performance improvement at a significantly lower cost for Air France-KLM. Activision Blizzard, an existing Oracle E-Business Suite, was also an Oracle Database at Azure win. Oracle's embrace of AI across our strategic applications is leading to broader enterprise conversations with our customers involving our full stack, OCI, AI Data Platform, Fusion applications, industry suites. These conversations are about ecosystem automation. They're not about single apps. They're about automating the entire ecosystem, and they further enabled by our simplified go-to-market model, which we spoke about in our last earnings call. This is allowing us to close more multi-product deals with more customers, combining the power of the Oracle Database, our OCI platform, our AI tooling, and our complete application suites.

Speaker #2: OCI, AI data platform, fusion applications, industry suites, these conversations are about ecosystem automation. They're not about single apps. They're about automating the entire ecosystem and they further enabled by our simplified go-to-market model, which we spoke about in our last earnings call.

Speaker #2: This is allowing us to close more multi-product deals with more customers combining the power of the Oracle database, our OCI platform, our AI tooling, and our complete applications suites.

For their mission critical, B2B platform, Claro Brasil selected OCI Alloy for Sovereign AI. Air France-KLM, which is a multicloud win featuring a win with the Oracle Database at Azure, and that led to a 13th at a significantly lower cost for Air France-KLM. Activision Blizzard and existing Oracle E-Business Suite was also an Oracle Database at Azure win.

Speaker #2: In constant currency cloud applications, deferred revenue was up 14% versus in-quarter cloud applications revenue growth of 11%, which further supports our acceleration thesis. With that play, I'll turn it over to you.

Oracle's embrace of AI across our strategic applications is leading to broader enterprise conversations with our customers involving our full stack.

Speaker #3: Thank you, Mike. Okay. So I'm going to talk about two segments of our business, our multi-cloud database and AI infrastructure. Both are growing extremely quickly.

Speaker #3: Multi-cloud database revenue grew 531% year over year. AI infrastructure revenue grew 243% year over year. Both also have demand that exceeds supply and a clear execution plan from Oracle that will rapidly turn that demand into profitable recurring revenue.

Mike Sicilia: In constant currency cloud applications, deferred revenue was up 14% versus in-quarter cloud applications revenue growth of 11%, which further supports our acceleration thesis. With that, Clay, I'll turn it over to you.

Oci AI data platform, Fusion applications industry. Suites these conversations are about ecosystem automation. They're not about single apps. They're about automating the entire ecosystem. And they further enabled by our simplified go to market model, which we spoke about in our last earnings call. This is allowing us to close more multi-product deals with more customers. Combining the power of the Oracle database, our oci platform, our AI tooling and our complete applications Suites in constant currency. Cloud applications. Deferred revenue was up 14% versus in quarter Cloud applications Revenue growth of 11%, which further

Speaker #3: Oracle database has run on any hardware and operating system for decades. Oracle database cloud services up until recently were only available in a single cloud, OCI.

Clay Magouyrk: Thank you, Mike. Okay, I'm gonna talk about two segments of our business, our multicloud database and AI infrastructure. Both are growing extremely quickly. Multicloud database revenue grew 531% year-over-year. AI infrastructure revenue grew 243% year-over-year. Both also have demand that exceeds supply and a clear execution plan from Oracle that will rapidly turn that demand into profitable recurring revenue. Oracle Database has run on any hardware and operating system for decades. Oracle Database Cloud Services, up until recently, were only available in a single cloud, OCI. We created our multi-cloud partnerships with first Microsoft, then Google, and finally Amazon to bring the best database platform to all clouds. Those partnerships unlock an enormous backlog of demand. Our database customers who want to use our database in other clouds. This quarter, we achieved an important milestone.

Supports our acceleration thesis with that play. I'll turn it over to you.

Thank you, Mike.

Speaker #3: We created our multi-cloud partnerships with First Microsoft, then Google, and finally Amazon to bring the best database platform to all clouds. Those partnerships unlock an enormous backlog of demand.

Speaker #3: Our database customers who want to use our database in other clouds. This quarter, we achieved an important milestone. We have global region coverage in all of our partner clouds.

Speaker #3: We now have 33 regions live with Microsoft and 14 live with Google. We delivered significant growth with AWS beginning Q3 with two AWS regions live, exiting Q3 with eight AWS regions live, and we will exit Q4 with 22 AWS regions live.

Okay, so I'm I'm going to talk about 2 segments of our business, our multi Cloud database, and AI infrastructure. Both are growing extremely quickly. Multi Cloud, database Revenue, grew 531%, year-over-year, AI, infrastructure, Revenue grew, 243% year-over-year. Both also have demand that exceed Supply and a clear execution plan from Oracle that will rapidly turn that demand into profitable, recurring Revenue.

Oracle Database has run on any hardware and operating system for decades.

Oracle database cloud services, up until recently, were only available in a single cloud: OCI.

Speaker #3: AI is also accelerating the adoption of our database cloud services. The rapid improvement in model coding skills and agentic abilities pushes customers to move their most valuable data into our cloud services.

And finally Amazon to bring the best database platform to all clouds.

Those partnerships unlock an enormous backlog of demand—our database customers who want to use our database in other clouds.

Clay Magouyrk: We have global region coverage in all of our partner clouds. We now have 33 regions live with Microsoft and 14 live with Google. We delivered significant growth with AWS, beginning Q3 with 2 AWS regions live, exiting Q3 with 8 AWS regions live, and we will exit Q4 with 22 AWS regions live. AI is also accelerating the adoption of our database cloud services. The rapid improvement in model coding skills and agentic abilities pushes customers to move their most valuable data into our cloud services. They need access to the latest AI features to support vector embeddings, MCP server access, and advanced security controls. Customers also need their data to be co-located with the agents themselves, and our multi-cloud database makes that easy. Our multi-cloud architecture brings the best of Oracle Cloud into our partner regions in

This quarter, we achieved an important milestone.

Speaker #3: They need access to the latest AI features to support vector embeddings, MCP server access, and advanced security controls. Customers also need their data to be co-located with the agents themselves and our multi-cloud database makes that easy.

We have a global region coverage in all of our partner clouds.

Speaker #3: Our multi-cloud architecture brings the best of Oracle Cloud into our partner regions, this ensures that we will rapidly turn billions of pipelines into highly profitable database service revenue.

We now have 33 regions live with Microsoft and 14 live with Google. We delivered significant growth with AWS beginning Q3 with 2. Aw regions live exiting Q3 with 8 aw regions live and we will execute 4 with 22 AWS regions live.

AI is also accelerating the adoption of our database cloud services.

Speaker #3: Demand for AI infrastructure both GPU and CPU continues to exceed supply. This is directly visible in our 553 billion RPO. I want to share a model for how that RPO turns into profitable recurring revenue as well as some operational metrics that are early indicators of our progress.

The rapid improvements in model coding fields and agentic abilities push customers to move their most valuable data into our cloud services.

They need access to the latest AI features to support vector embedding MCP server access and advanced security controls. Customers also need their data to be co-located with the agents themselves, and our multi-cloud database makes that easy.

Speaker #3: AI infrastructure begins with data centers and power generation. Through our partners, we have secured more than 10 gigawatts of power and data center capacity coming online over the next three years.

Clay Magouyrk: This ensures that we will rapidly turn billions of pipelines into highly profitable database service revenue. Demand for AI infrastructure, both GPU and CPU, continues to exceed supply. This is directly visible in our $553 billion RPO. I want to share a model for how that RPO turns into profitable recurring revenue, as well as some operational metrics that are early indicators of our progress. AI infrastructure begins with data centers and power generation. Through our partners, we have secured more than 10 gigawatts of power and data center capacity coming online over the next 3 years. Those infrastructure investments also need funding, and greater than 90% of that capacity is fully funded through our partners, with the remainder planned to finish this month. Once the data center is secured, several things must come together.

Our multi-cloud architecture brings the best of Oracle Cloud into our partner regions in.

Speaker #3: Those infrastructure investments also need funding and greater than 90% of that capacity is fully funded through our partners with the remainder planned to finish this month.

This ensures that we will rapidly turn billions of pipelines into highly profitable database service revenue.

Speaker #3: Once the data center is secured, several things must come together. The data center and on-site power generation has to be constructed. Compute, networking, and storage has to be designed, manufactured, delivered, and installed.

Demand for AI, infrastructure, vote GPU, and CPU continues to exceed Supply. This is directly visible in our 553 billion RPO.

I want to share a model for how that RPO turns into profitable recurring revenue, as well as some operational metrics that are early indicators of our progress.

Speaker #3: All the capacity inside the data center also has to be funded. We continue to innovate across each of these steps. We optimize our data center construction through standardized designs.

AI infrastructure begins with data centers and power generation.

Speaker #3: Our supply chain has improved with more suppliers and deeper relationships. We have tripled our manufacturing sites and increased rack output by 4X all in the last year.

Through our partners, we have secured more than 10 gigawatts of power and data capacity coming online over the next 3 years.

Those infrastructure Investments also need funding and greater than 90% of that capacity is fully funded through our partners with the remainder of plan to finish this month.

Speaker #3: We have scaled our installation processes to enable multiple phases of delivery in parallel. Time from rack delivery to revenue has reduced by 60% in the past several months.

Clay Magouyrk: The data center and on-site power generation has to be constructed. Compute, networking, and storage has to be designed, manufactured, delivered, and installed. All the capacity inside the data center also has to be funded. We continue to innovate across each of these steps. We optimize our data center construction through standardized designs. Our supply chain has improved with more suppliers and deeper relationships. We have tripled our manufacturing sites and increased rack output by 4x all in the last year. We have scaled our installation processes to enable multiple phases of delivery in parallel. Time from rack delivery to revenue has reduced by 60% in the past several months. We also continue to innovate on our business models. On our last earnings call, I shared multiple ideas for how we can incrementally grow our AI infrastructure without Oracle raising more debt or issuing equity.

Speaker #3: We also continue to innovate on our business models. On our last earnings call, I shared multiple ideas for how we can incrementally grow our AI infrastructure without Oracle raising more debt or issuing equity.

Once the data center is secured, several things must come together. The data center and on-site power generation have to be constructed. Compute, networking, and storage have to be designed, manufactured, delivered, and installed.

All the capacity inside the data center also has to be funded.

We continue to innovate across each of these steps.

We optimize our data center construction through standardized designs.

Speaker #3: We have signed more than 29 billion of contracts since then across multiple customers using that new model. A combination of bring your own hardware and upfront customer payments enables us to continue expanding without any negative cash flow from Oracle.

Our supply chain has improved, with more suppliers and deeper relationships.

We have tripled our manufacturing sites and increased rack output by 4X all in the last year.

We have scaled our installation processes to enable multiple phases of delivery in parallel.

Speaker #3: Of course, this 29 billion is in addition to other deals we signed this quarter. Ultimately, all of this results in capacity delivered to customers and revenue to Oracle.

Time from rack delivery to revenue has reduced by 60% in the past several months.

We also continue to innovate on our business models.

Speaker #3: In Q3, we delivered more than 400 megawatts to customers. 90% of that committed capacity was delivered on or ahead of schedule, as we consistently done over several quarters.

Clay Magouyrk: We assigned more than $29 billion of contracts since then across multiple customers using that new model. A combination of bring your own hardware and upfront customer payments enables us to continue expanding without any negative cash flow from Oracle. Of course, this $29 billion is in addition to other deals we signed this quarter. Ultimately, all of this results in capacity delivered to customers and revenue to Oracle. In Q3, we delivered more than 400MW to customers. 90% of that committed capacity was delivered on or ahead of schedule, as we've consistently done over several quarters. This is why customers continue to choose Oracle for their infrastructure needs. Investing in AI infrastructure is capital intensive, but our operating model is optimized to ensure profitability. Flexible infrastructure design, high utilization, and rapid handover combined with diversified customers creates an incredible business.

On our last earnings call, I shared multiple ideas for how we can incrementally grow our AI infrastructure without Oracle raising more debt or issuing equity.

Speaker #3: This is why customers continue to choose Oracle for their infrastructure needs. Investing in AI infrastructure is capital intensive, but our operating model is optimized to ensure profitability.

Speaker #3: Flexible infrastructure design, high utilization, and rapid handover combined with diversified customers creates an incredible business. Increased scale spreads our fixed costs over a larger base, increasing profitability.

We assigned more than 29 billion dollars of contracts since then across multiple customers, using that new model, a combination of brings your own hardware and upfront, customer payments, enables us to continue expanding without any negative cash flow from Oracle.

Speaker #3: It's unprecedented to scale a capital-intensive business so quickly while also increasing profitability. Looking at the AI capacity we delivered in Q3, our gross margin for that remains above our 30% guidance at 32%.

Ultimately, all of this results in capacity delivered to customers and revenue to Oracle. In Q3, we delivered more than 400 megawatts to customers.

Ninety percent of that committed capacity was delivered on or ahead of schedule, as we've consistently done over several quarters. This is why customers continue to choose Oracle for their further infrastructure needs.

Speaker #3: Now, combine that with our other segments of OCI, which have much higher margins like our database services, and you can see why Oracle is growing so quickly and profitably.

Investing in AI infrastructure is capital intensive, but our operating model is optimized to ensure profitability.

Speaker #3: Our numbers speak for themselves. We are over-delivering on FY26 revenue and earnings, and we are constantly raising our FY27 forecast. This is made possible by Oracle's transition from a predominantly seasonal licensed business into a highly predictable recurring revenue cloud business.

Clay Magouyrk: Increased scale spreads our fixed costs over a larger base, increasing profitability. It's unprecedented to scale a capital-intensive business so quickly while also increasing profitability. Looking at the AI capacity we delivered in Q3, our gross margin for that remained above our 30% guidance at 32%. Now, combine that with our other segments of OCI, which have much higher margins, like our database services, and you can see why Oracle is growing so quickly and profitably. Our numbers speak for themselves. We are over-delivering on FY26 revenue and earnings, and we are constantly raising our FY27 forecast. This is made possible by Oracle's transition from a predominantly seasonal license business into a highly predictable recurring revenue cloud business. Demand for AI and advanced compute will continue to expand broadly across the economy. There will be many successful models, agentic platforms, and businesses that emerge.

Flexible infrastructure, high design, utilization, and rapid handover combined with diversified customers creates an incredible business.

Increased scale, spreads our fixed costs, over a larger base, increasing profitability.

It's unprecedented to scale a capital-intensive business so quickly, while also increasing profitability.

Speaker #3: Demand for AI and advanced compute will continue to expand broadly across the economy. There will be many successful models, agentic platforms, and businesses that emerge.

Looking at the AI capacity, we delivered in Q3. Our gross margin for that remains above our 30% guidance at 32%.

Speaker #3: We support hundreds of the most advanced AI customers today and more continually want to work with us. We build infrastructure that is flexible, fungible, and can support the smallest workloads up to the largest.

Now, combine that with our other segments of OCI, which have much higher margins—like our database services—and you can see my work was drawn so quickly and profitably.

Our numbers speak for themselves.

Speaker #3: We continually offer the latest in accelerators, from the most recent NVIDIA and AMD options to emerging designs from companies like Cerebras and Powertran. Altogether, we are confident that the investments we make now in data centers, compute capacity, and customer relationships will only grow more valuable with time.

We are over-delivering on FY26 revenue and earnings, and we are constantly raising our FY27 forecast.

This is made possible by Oracle's transition from a predominantly seasonal, license business into a highly predictable, recurring revenue cloud business.

Demand for AI and advanced compute will continue to expand broadly across the economy.

Speaker #3: Back to Ken for questions.

Clay Magouyrk: We support hundreds of the most advanced AI customers today, and more continually want to work with us. We build infrastructure that is flexible, fungible, and can support the smallest workloads up to the largest. We continually offer the latest in accelerators from the most recent NVIDIA and AMD options to emerging designs from companies like Cerebras and Groq. Altogether, we are confident that the investments we make now in data centers, compute capacity, and customer relationships will only grow more valuable with time. Back to Ken for questions.

Speaker #4: Thank you, Clay. Regine, if you could please pull the audience for questions.

Speaker #5: We will now begin the question and answer session. To ask a question, press star, then the number one on your telephone keypad. We ask that you please limit your questions to one.

There will be many successful models, agentic platforms and businesses that emerge. We support. Hundreds of the most advanced AI customers today and more continually want to work with us.

Close up the largest.

Speaker #5: Our first question will come from the line of John DiFucci with Guggenheim. Please go ahead.

Speaker #6: Thank you. Well, a lot going on here. So listen, I'm going to let others ask about the AI infrastructure question, but we've heard Doug talk about a halo effect that the AI infrastructure business is having on the rest of your business.

We continually offer the latest in accelerators, from the most recent Nvidia and AMD options to emerging designs from companies like Cerebras and Pyron.

Altogether, we are confident that the investments we make now in data centers, compute capacity, and customer relationships will only grow more valuable with time.

Ken Bond: Thank you, Clay. Regine, if you could please poll the audience for questions.

Back to Ken for questions.

Operator: We will now begin the question and answer session. To ask a question, press star, then the number one on your telephone keypad. We ask that you please limit your questions to one. Our first question will come from the line of John DiFucci with Guggenheim. Please go ahead.

Speaker #6: This quarter was strong, and you said that the RPO increase was from large-scale AI contracts. At the same time, we're hearing from the field now that that halo effect is actually turning into business.

Thank you, Clay. Regina, if you could please poll the audience for questions.

Speaker #6: Outside of AI infrastructure, it sounds like the go-lives are steady, but the business activity, and especially the pipeline, are up materially for more traditional cloud workloads, including dedicated regions, sovereign clouds, even alloy deals.

John DiFucci: Thank you.

John DiFucci: Thank you.Wow, a lot going on here. Listen, I'm gonna let others ask about the AI infrastructure question. We've heard Doug talk about a halo effect that the AI infrastructure business is having on the rest of your business. This quarter was strong, and you said that the RPO increase was from large-scale AI contracts. At the same time, we're hearing from the field now that that halo effect is actually turning into business. Outside of AI infrastructure, it sounds like the go lives are steady, but the business activity, and especially the pipeline, are up materially for more traditional cloud workloads, including, you know, dedicated region, sovereign clouds, even Alloy deals we're starting to hear about. In addition to what Mike started talking about with the often related apps deals.

We will now begin the question-and-answer session. To ask a question, press star, then the number 1 on your telephone keypad. We ask that you please limit your questions to one. Our first question will come from the line of John De Fuchi with Guggenheim. Please go ahead.

John DiFucci: Wow, a lot going on here. Listen, I'm gonna let others ask about the AI infrastructure question. We've heard Doug talk about a halo effect that the AI infrastructure business is having on the rest of your business. This quarter was strong, and you said that the RPO increase was from large-scale AI contracts. At the same time, we're hearing from the field now that that halo effect is actually turning into business. Outside of AI infrastructure, it sounds like the go lives are steady, but the business activity, and especially the pipeline, are up materially for more traditional cloud workloads, including, you know, dedicated region, sovereign clouds, even Alloy deals we're starting to hear about. In addition to what Mike started talking about with the often related apps deals.

Speaker #6: We've started hearing about, in addition to what Mike started talking about with the often related apps deals. I realize these types of deals aren't the scale of these AI deals, but can you talk about what seems to building in these businesses?

Speaker #6: Am I right to be thinking of this? And if I could, on a sort of related topic, can you give us any visibility into CapEx for fiscal '27?

Speaker #7: Okay. Hey, John, this is Mike. I'll take the question. So yes, we absolutely are seeing a halo effect. And let me add a little bit of color on that.

John DiFucci: I realize these types of deals aren't the scale of these AI deals, but can you talk about what seems to be an underlying momentum building in these businesses? Am I right to be thinking of this? If I could, on a sort of related topic, can you give us any visibility into CapEx for fiscal 27?

Speaker #7: As far as the apps business, the fact that we're training so many models on OCI and so closely provisioned to our applications allows us to embed very high-quality AI services right into our applications, as I said, as features.

Speaker #7: So not only are we serving these customers, serving the model vendors for training, but we're also embedding a lot of the output right into our applications.

Mike Sicilia: Okay. Hey, John, this is Mike. I'll take the question. Yes, we absolutely are seeing a halo effect, and let me add a little bit of color on that. You know, as far as the apps business, you know, the fact that we're training so many models on OCI and so closely provisioned to our applications allows us to embed very high-quality AI services right into our applications, as I said, as features. Not only are we serving these customers, you know, serving the model vendors for training, but we're also embedding a lot of the output right into our applications. Of course, we're doing prompt engineering and things like that to make it relevant to the business.

I realized these types of deals aren't the scale of these AI deals, but can you talk about what seems to be an underlying momentum building in these businesses, and am I right to be thinking of this? And, if I could, on a sort of related topic, can you give us any visibility into capex for fiscal '27?

Speaker #7: Of course, we're doing prompt engineering and things like that to make it relevant to the business. But the fact that we are the custodian in our applications business of so much of the world's mission-critical data, we have very close provisioning, very close proximity to these models, putting those two things together, allows customers to get value from AI very, very quickly.

Okay, hey John, this is Mike. I'll take the question. So yes, we absolutely are seeing a halo effect, and let me—

Speaker #7: And if you've heard any criticism of AI in the world, it's, "Well, I can't get value quick enough." Well, actually, when you bundle up as a service and expose the private data to AI that we are the custodian of as the applications we've seen terrific wins I mentioned some of the verticals you heard about there, but I think that's true across the board.

Mike Sicilia: The fact that we are the custodian in our applications business of so much of the world's mission-critical data. We have very close provisioning, very close proximity to these models. Putting those two things together allows customers to get value from AI very, very quickly. If you've heard any criticism of AI in the world, it's, "Well, I can't get value quick enough." Well, actually, when you bundle it up as a service, and expose the private data to AI that we are the custodian of the applications, we've seen terrific wins. I mentioned some of the verticals you heard about there, but I think that's true across the board. The other piece that is a very interesting halo effect is leveraging our infrastructure, just OCI infrastructure as a value creator for customers.

Speaker #7: The other piece that is a very interesting halo effect is leveraging our infrastructure. Just OCI, infrastructure as a budget creator for customers. You've heard us say it before.

Speaker #7: We're faster and cheaper than everybody else. And when customers are thinking about these large-scale application or large-scale infrastructure transformations, we can often help them get to a position of budget creation to be able to fund that transformation simply by moving their workloads to OCI because we can run them more quickly and more efficiently and less expensively than our competitors.

Let me add a little bit of color on that, uh, you know, as far as the as business, you know, the fact that we're training, uh, somebody models on oci and, and so closely provision to our applications allows us to embed, uh, very high quality AI Services, right into our applications, as I said, as, as feature. So not only are, are we, um, serving these customers, you know, serving the, the model vendors, uh, for training. But we're also embedding a lot of the output right into our applications. Of course, we're doing prompt engineering and things like that, so to make it relevant to the business. But the fact that the fact that we are the custodian in our applications business is so much of the world's Mission critical data. We have very close provisioning, very close proximity to uh, to to these models, putting those 2 things together, allows customers to get value from AI very, very quickly. And if you've heard any criticism with AI in the world as well, I can't get value quickly enough. Well actually when you bundle up as a service um and expose the private data to AI that that we are the custodian of the applications. We've seen terrific ones, I mentioned some of the verticals uh you heard about their

Speaker #7: And then finally, the other halo effect, before I turn it over to Doug for your question on CapEx, is around sovereign AI. Our sovereign story is not new, and it's not a knee-jerk reaction to things that are happening in the world.

Mike Sicilia: You've heard us say it before, we're faster and cheaper than everybody else. When customers are thinking about these large-scale infrastructure transformations, we can often help them get to a position of budget creation to be able to fund that transformation simply by moving their workloads to OCI because we can run them more quickly and more efficiently and less expensively than our competitors. Finally, you know, the other halo effect, before I turn it over to Doug for your question on CapEx, is around sovereign AI. Our sovereign story is not new, and it's not a knee-jerk reaction to the things that are happening in the world.

But I think that's true across the board. The other piece that is a very interesting halo effect is leveraging our infrastructure—just OCI, uh, infrastructure as a budget creator for customers. You've heard us say it before,

Speaker #7: To combine together with our alloy story, we're really seeing increasing pipeline across the world. The fact that our form factor, and we're so differentiated in our form factor, and we can deliver not just a smaller form factor, but complete OI OCI services on top of that form factor, no matter how many racks are involved, no matter if it's three racks or 500 racks, we think that's a huge differentiator in the market.

Um, we're faster and cheaper than everybody else. And when customers are thinking about these large-scale application or, uh, large-scale infrastructure transformations, um, we can often help them get to, uh, get to a position of, uh, of budget creation to be able to fund that transformation simply by moving their workloads to OCI, because we can run them more quickly and more efficiently and less expensively than, than our competitors. And then finally, you know, the, the other, the other halo, uh,

Speaker #7: So you put apps together, you put OCI AI services together, you put sovereignty together, and yes, it's a pretty big halo effect. Yeah. And John, I guess when we start by acknowledging the creativity and getting two questions, then at the same time, it's always fascinating to watch.

Mike Sicilia: You know, to combine together with our Alloy story, you know, we're really seeing increasing pipeline across the world. The fact that our form factor, and we're so differentiated in our form factor, and we can deliver, you know, not just a smaller form factor, but complete OCI services on top of that form factor, no matter how many racks are involved, no matter if it's 3 racks or 500 racks, we think that's a huge differentiator in the market. You put apps together, you put OCI AI services together, you put sovereignty together, and it's a pretty big halo effect.

Speaker #7: So on CapEx, I think we'll get back to everyone next after the end of the fiscal year and talk about next year's CapEx at that point in time.

Speaker #7: But I will state a couple of things. Obviously, from what Clay has gone through, the most interesting thing that you should start thinking about is the uncoupling of CapEx with capital requirements from Oracle.

Speaker #7: Obviously, when we have these additional funding mechanisms, there may be additional CapEx, but it doesn't require out-of-pocket cash from Oracle, which is quite interesting.

Doug Kehring: Yeah. John, let me start by acknowledging the creativity in getting two questions in at the same time. That's always fascinating to watch. On CapEx, I think we'll get back to everyone after the end of the fiscal year and talk about next year's CapEx at that point in time. I will state a couple things. Obviously, from what Clay has gone through, the most interesting thing that you should start thinking about is the uncoupling of CapEx with capital requirements from Oracle. Obviously, when we have these additional funding mechanisms, there may be additional CapEx, but it doesn't require out-of-pocket cash from Oracle, which is quite interesting.

effect before I turn it over to Doug, for your, your question on on capex is around. Sovereign AI, our Sovereign story, uh, is, is not new and it's not an easy reaction to the things that are happening in the world. Uh, you know, the combined together with our alloy story, you know, we're really seeing increasing pipeline across the world. The fact that our form factor and we're so differentiated in our form factor and we can deliver, you know, not just not just a smaller form factor but complete, oh, I serve oci services on top of that form factor, no matter how many racks are involved or if it's 3 or 5 hundred racks, um, we think that's a huge differentiator in the market, so you put you put apps together, you put oci AI Services together, you put sovereignty together and uh, yes. Uh it's a it's a pretty big halo effect.

Speaker #7: So underlying that, as we remain committed to what we talked about last quarter, which is maintaining the investment-grade rating at Oracle, as well as staying within the financing envelope that we talked about, obviously, of which we've announced that we're doing $50 billion this calendar year of that total.

Speaker #7: So more to come, John, on the CapEx after next quarter.

Speaker #6: Very much appreciate the color on that, Doug. And Mike, you're prepared remarks on AI and how Oracle approaches it. Everybody should use that because it's a logical approach.

Doug Kehring: Underlying that, as we remain committed to what we talked about last quarter, which is maintaining the investment-grade rating at Oracle, as well as staying within the financing envelope that we talked about, obviously, of which we've announced that we're doing $50 billion this calendar year of that total. More to come, John, on the CapEx after next quarter.

Speaker #6: So thanks, guys, and nice job.

Speaker #8: Our next question will come from the line of Mark Murphy with JPMorgan. Please go ahead.

Speaker #6: Thank you. Congrats on the acceleration. Clay, as Oracle transitions to higher levels of AI inferencing, what do you view as the right strategy for trying to optimize the location of your data centers?

John DiFucci: Very much appreciate the color on that, Doug. Mike, your prepared remarks on AI and how Oracle approaches it, everybody should use that 'cause it's a logical approach. Thanks, guys, and nice job.

Speaker #6: For instance, if you have these huge centralized data centers in Texas and Wyoming, they're very close to power, but they're pretty far from the population centers and the fiber routes that are out there on the seaboard.

Facts with capital requirements from Oracle. Obviously, when we have these additional funding mechanisms, there may be additional capex, but it doesn't require uh uh out-of-pocket cash from Oracle which is uh quite quite interesting. So underlying that as we remain committed, uh, to what we talked about last quarter, which is maintaining the investment grade rating at Oracle, as well as, uh, staying within the, uh, financing envelope. Uh, that we talked about obviously of which we've uh um, we've announced that we're doing 50 billion this calendar year of that, of that total. So um, so more more to come John on the on the cutbacks. After next quarter very much, appreciate the color on that Doug and Mike, you're prepared remarks on AI and how I work with it.

Operator: Our next question will come from the line of Mark Murphy with JP Morgan. Please go ahead.

Everybody should use that because it's—it's—it's a… it's a logical approach. So, thanks. Thanks, guys. And nice job.

Speaker #6: So it crosses our minds that the users and the devices are a long distance away. So as you make this move, more into inferencing, are you seeing any reason to try to pivot those locations a little closer to where the users and the traffic are?

Mark Murphy: Thank you. Congrats on the acceleration. Clay, as Oracle transitions to higher levels of AI inferencing, what do you view as the right strategy for trying to optimize the location of your data centers? For instance, you know, if you have these huge centralized data centers in Texas and Wyoming, they're very close to power, but they're pretty far from the population centers and the fiber routes that are out there on the seaboard. You know, it crosses our minds that the users and the devices are a long distance away. As you make this move more into inferencing, are you seeing any reason to try to pivot those locations a little closer to where the users and the traffic are?

Our next question will come from the line of Mark Murphy with JP Morgan. Please go ahead.

Thank you. Congrats on the acceleration, Clay. Um,

Speaker #7: Sure. Great. This is Clay. Great question, Mark. So let me start by, I think, highlighting our perspective on inferencing and then how that impacts kind of data center deployment.

Speaker #7: So the first thing I would say is I think we are for a while, there was a lot of training going on. Inferencing is very rapidly growing.

As Oracle transitions to higher levels of AI inferencing, what do you view as the right strategy for trying to optimize the, uh, the location of your data centers? For instance, if you know, you have these huge centralized data centers in Texas, in Wyoming, they're very close to power, but they're pretty far from the population centers and the fiber, uh, routes that are out there on the seaboard. So, um, you know, it—

Speaker #7: Everywhere and anywhere. I think it's because of higher and higher utilization of the models themselves and also new use cases as anyone who's been using Claude or Codex recently in the software space knows these are incredible tools.

Clay Magouyrk: Sure. Great. This is Clay. Great question, Mark.

Clay Magouyrk: Sure. Great. This is Clay. Great question, Mark.Let me start by, I think, highlighting our perspective on inferencing and then how that impacts kind of data center deployment. First thing I would say is I think we are, you know, for a while there was a lot of training going on. Inferencing is very rapidly growing everywhere and anywhere. I think it's because of higher and higher utilization of the models themselves and also new use cases. You know, as anyone who's been using Claude or Codex recently in the software space knows, these are incredible tools. They're changing how we do everything. Inferencing is going to have a huge amount of demand. Now, when you talk about data center location, you mentioned, you know, latency is the one. Realistically, there's several reasons you might care about the location.

Losses—our minds are that the users and the devices are a long distance away. So as you make this, move more into interesting, are you seeing any reason to, uh, try to pivot those locations a little closer to where the users and the traffic are?

Clay Magouyrk: Let me start by, I think, highlighting our perspective on inferencing and then how that impacts kind of data center deployment. First thing I would say is I think we are, you know, for a while there was a lot of training going on. Inferencing is very rapidly growing everywhere and anywhere. I think it's because of higher and higher utilization of the models themselves and also new use cases. You know, as anyone who's been using Claude or Codex recently in the software space knows, these are incredible tools. They're changing how we do everything. Inferencing is going to have a huge amount of demand. Now, when you talk about data center location, you mentioned, you know, latency is the one. Realistically, there's several reasons you might care about the location.

Speaker #7: They're changing how we do everything. So inferencing is going to have a huge amount of demand. Now, when you talk about data center location, you mentioned latency is the one.

Speaker #7: Realistically, there's several reasons you might care about the location. It might be because of cost. It might be just overall availability. It might be for sovereignty.

Speaker #7: So there's different reasons to pick a location. But honing in on your point about latency, the thing I think to understand is that latency is all proportional, meaning if what you're trying to do is you're trying to do a very, very low latency trade on the stock market, waiting for the 100-millisecond round trip from coast to coast is a bad idea.

Sure. Great. This is Clay—great question, Mark. Um, so, uh, let me start by, I think, um, highlighting our perspective on inferencing and then how that impacts, kind of, data center deployment. The first thing I would say is, I think we are, you know, for a while, there was a lot of training going on. Uh, inferencing is very rapidly, uh, growing, uh, everywhere and anywhere. Uh, I think it's because of higher and higher utilization of the models themselves, and also new use cases. You know, as anyone who's been using, uh, Claude or Codex recently, uh, in the software space knows, these are incredible tools that are changing how we do everything.

Speaker #7: If what you're doing is you're asking a question for your business that's going to take an AI model several seconds to think about, an extra 40 milliseconds of latency from New York to Wyoming is not going to hurt you.

Clay Magouyrk: It might be for the cost, it might be just overall availability, it might be for sovereignty. There's different reasons to pick a location. Honing in on your point about latency, the thing I think to understand is that latency is all proportional. Meaning, if what you're trying to do is a you know a very, very low latency trade on the stock market, waiting for the 100 millisecond round trip from coast to coast is a bad idea. If what you're doing is asking a question for your business that's gonna take an AI model several seconds to think about, an extra 40 milliseconds of latency from New York to Wyoming is not gonna hurt you.

Speaker #7: And so when you actually talk to customers about use cases where they need lower latency, the latency problem right now is not actually the location of the hardware.

Um, so, Entrancing is going to have a huge amount of demand. Now, when you talk about data center location, you mentioned, you know, latency is the one—there's several reasons you might care about the location. It might be for the cost, it might be just overall availability, it might be for sovereignty. So, there's different reasons to pick a location. But honing in on your point about latency...

Speaker #7: It's the type of hardware that's being deployed. And that's why you're seeing so much innovation going on around these AI accelerators. If you look at what GROQ, Grok does, or Cerebras, or Positron, all of these different types of customers are saying, "Well, not only how do we reduce the cost of inferencing, but also how can we significantly reduce the latency of it?" And I think if you look forward to GTC from NVIDIA next week, you'll see announcements from them.

Um, the thing I think to understand is that latency is all proportional. Meaning, uh, if what you're trying to do is you're trying to do a, you know, a very, very low latency trade on the stock market, uh, waiting for the 100 c round trip from coast to coast is a bad idea.

If what you're doing is you're asking a question, uh, for your business, that's going to take an AI model several seconds to think about—an extra 40 milliseconds.

Clay Magouyrk: When you actually talk to customers about use cases where they need lower latency, the latency problem right now is not actually the location of the hardware, it's the type of hardware that's being deployed. That's why you're seeing so much innovation going on around these AI accelerators. If you look at what Groq does or Cerebras or Positron, all of these different types of customers are saying, "Well, not only how do we reduce the cost of inferencing, but also how can we significantly reduce the latency of it?" I think if you look forward to GTC from NVIDIA next week, you'll see any announcements from them.

Speaker #7: But across the board, I think the way that as an industry we're going to consolidate and kind of reduce latency has to first start with a different architecture for that inferencing.

Speaker #7: And thankfully, the data center location is actually a very tiny part of that. So it makes it much more flexible for us to go out and put the data centers where power is abundant, land is plentiful, and we can actually optimize for what's available to meet this ever-increasing demand.

Speaker #6: Thank you very much.

Clay Magouyrk: Across the board, I think the way that as an industry we're going to consolidate and kind of reduce latency has to first start with a different architecture for that inferencing. Thankfully the data center location is actually a very tiny part of that. It makes it much more flexible for us to go out and put the data centers where power is abundant, land is plentiful, and we can actually optimize for what's available to meet this ever-increasing demand.

Speaker #8: Our next question comes from the line of Siti Panigrahi with Mizuho. Please go ahead.

Speaker #6: Great. Thanks for taking my question. I want to ask about the opportunity with your AI database and AI data platform. So with recent excitement on AI and around enterprises now adopting tools from Frontier LLMs, so what are you hearing from customers about training their private data and building their private LLMs?

The latency from New York to, uh, Wyoming is not going to hurt you. Uh, and so, when you actually talk to customers about use cases where they need lower latency, the latency problem right now is not actually the location of the hardware. It's the type of hardware that's being deployed, and that's why you're seeing so much innovation going on around these AI accelerators. If you look at what the, you know, what GQ Rock does, or, uh, Cerebras, or Positron—all of these different types of customers are saying, well, not only, how do we reduce the cost of inferencing, but also, how can we significantly reduce the latency of it? And I think, you know, if you look forward to, uh, you know, GTC from Nvidia next week, you'll see announcements from them. But across the board, I think the way that, as an industry, we're going to consolidate and kind of reduce latency has to first start with a different architecture for that inferencing. Um, and thankfully, the data center location is actually a very tiny part of that, so it makes it much more flexible for us to go out and put the data centers where, uh, power is abundant.

Mark Murphy: Thank you very much.

Land is plentiful and um we can we can actually optimize for what's available uh to to meet this uh ever increasing demand.

Speaker #6: And how confident are you in seeing the inflection in your AI database growth that you talked about at the analyst in October?

Operator: Our next question comes from the line of Sitikantha Panigrahi with Mizuho. Please go ahead.

Thank you very much.

Sitikantha Panigrahi: Great. Thanks for taking my question. I wanna ask about the opportunity with your AI database and AI data platform. With recent excitement on AI and around enterprises now adopting tools from frontier LLMs, what are you hearing from customers about training their private data and then building their private LLMs? And how confident are you in seeing the inflection in your AI database growth that you talked about at the Analyst Day in October?

Our next question comes from the line of C.T. Panigrahi with Meizuo. Please go ahead.

Speaker #7: Yeah. Thanks, this is Clay. So look, I think there's two parts to that question. One is how much adoption are we seeing of kind of private LLMs, and then how much are we seeing of using AI with private data?

Speaker #7: I think in the early days, people, a lot of people thought that most customers would be doing very specific training of their own large language models.

Speaker #7: I think that is largely proven to not be the case. Instead, what I think is incredibly popular and growing in popularity is people taking the best models and wanting them to combine that in a private way with their private data.

Clay Magouyrk: Yeah. Thanks, this is Clay. So look, I think there's two parts to that question. One is how much adoption are we seeing of kind of private LLMs, and then how much are we seeing of using AI with private data? I think in the early days, people, a lot of people thought that most customers would be doing, you know, very specific training of their own large language models. I think that has largely proven to not be the case. Instead, what I think is incredibly popular and growing in popularity is people taking the best models and wanting them to combine that in a private way with their private data. We're seeing a lot of demand for that.

And how confident are you in seeing the inflection in your AI database growth—that you talked about at the analyst in October?

Speaker #7: And we're seeing a lot of demand for that. If you listen to Mike earlier talk about how we're embedding these AI models into our applications, that's one use case.

Speaker #7: But obviously, not everything, unfortunately, runs inside of an Oracle application. And lots of custom applications are written. So we added a lot of functionality to our Oracle AI database.

Thanks, thanks. Uh, this is Clay. So look, I think I think there's 2 parts to that question 1 is, is how much adoption are we seeing as kind of private llms? And then, how much are we seeing of of using AI with private data?

Speaker #7: Make it easy to connect via, whether it be through MCP servers or natural language to SQL, that you can use these models to use.

Uh, I think in the early days, a lot of people thought that most customers would be doing, you know, very specific training of their own large language model. I think that has largely proven to not be the case.

Speaker #7: But also, we have our AI data platform product, which is really about solving this exact problem. You have a lot of data that may be application data.

Clay Magouyrk: If you listen to Mike earlier talk about, right, how we're embedding these AI models into our applications, that's one use case. Obviously not everything unfortunately runs inside of an Oracle application, and lots of custom applications are written. We added a lot of functionality to our Oracle AI Database, make it easy to connect via whether it be through MCP servers or natural language to SQL that you can use these models to use. But also we have our AI Data Platform product, which is really about solving this exact problem. You have a lot of data, it may be application data, it may be custom data in different data lakes and lake houses. It may be data in a structured database.

Instead, what I think is incredibly popular and growing in popularity is people taking the best models and wanting to combine that in a private way with their private data.

Speaker #7: It may be custom data in different data lakes and lakehouses. It may be data in a structured database. All that together, gives you an agentic platform to quickly build applications on, as well as access to all of the greatest models from multiple providers.

Speaker #7: So across the stack, we're seeing a lot of momentum across that. And that's why in my prepared remarks, I talked about the growth that we're seeing with our multi-cloud database.

Speaker #7: What we see is that for customers to take advantage of the latest and greatest AI, they first have to be in the cloud. And there's still a lot of data that's not in the cloud.

Speaker #7: And so we see acceleration of moving that most important private data to a cloud environment so they can then take advantage of the latest and greatest AI with that data.

Clay Magouyrk: All that together gives you an agentic platform to quickly build applications on, as well as access to all of the greatest models from multiple providers. Across the stack, we're seeing a lot of momentum across that, and that's why, you know, in my prepared remarks, I talked about the growth that we're seeing with our multi-cloud database. What we see is that for customers to take advantage of the latest and greatest AI, they first have to be in the cloud, and there's still a lot of data that's not in the cloud. We see acceleration of moving that, you know, most important private data to a cloud environment so they can then take advantage of the latest and greatest AI with that data.

And um we're seeing a lot of demand for that. If you listen to Mike earlier talk about right how we're embedding these AI models into our applications. That's 1 use case, but obviously not everything. Unfortunately runs inside of an oracle uh, application. And lots of custom applications are written. So, uh, we added a lot of functionality to our Oracle, AI database, uh, make it easy to connect via, whether it be through, mCP, servers or natural language to SQL. But you can use these models to use. Um, but also, we have our AI data platform product, which is really about solving this exact problem. You have a lot of data that may be application data. It may be, uh, custom data and and different, uh, data links and lakehouses. That may be data in a structured database.

Speaker #6: Great. Thanks for that, Carla.

Speaker #8: Our next question comes from the line of Mark Murdler with Sanford Bernstein. Please go ahead.

Speaker #6: Thank you very much for taking my question and congratulations on what's a really good quarter. Really great work. I'm going to change over a little bit and discuss on the financial side a little bit.

Speaker #6: Now that you've completed your major debt raise, can you explain, given the blend of the cost of the building out the AI data center and the cost of raising capital to fund the AI data center, how comfortable are you with the values you're creating from the AI data center business itself?

Sitikantha Panigrahi: Great. Thanks for the color.

All that together gives you an agentic platform to quickly build applications on, as well as access to all of the greatest models from multiple providers. So across the stack we're seeing a lot of momentum across that. And that's why, you know, in my prepared remarks I talked about the growth that we're seeing with our multi-cloud database. What we see is that for customers to take advantage of the latest and greatest AI, they first have to be in the cloud, and there's still a lot of data that's not in the cloud. And so we see acceleration of moving that, you know, most important private data to the cloud environment so they can then take advantage of the latest and greatest AI with that data.

Operator: Our next question comes from the line of Mark Moerdler with Sanford C. Bernstein. Please go ahead.

Great. Thanks for the

Speaker #6: And then as an adjacency, if you don't mind, can you talk a little bit more on the sovereign cloud? Can you discuss how you parlay the AI data center business into being the AI provider for sovereign clouds?

Mark Moerdler: Thank you very much for taking my question, and congratulations on what's a really good quarter. Really great work. I'm gonna change over a little bit, and discuss on the financial side a little bit. Now that you've completed your major debt raise, can you explain, given the blend of the cost of building out the AI data center and the cost of raising capital to fund the AI data center, how comfortable are you with the values you're creating from the AI data center business itself? Then as an adjacency, if you don't mind, can you talk a little bit more on the sovereign cloud? Can you discuss?

Our next question comes from the line of Mark Mler with Sanford Bernstein. Please go ahead.

Speaker #6: And how that should impact your value of work to Oracle?

Speaker #7: Thanks. Sure. I think we're going to split this one up. Mark, this is Clay. I'll take the first half, and then I'm going to throw it to Mike to talk about some of the sovereign cloud stuff.

Speaker #7: So look, when you think about the overall profitability of these AI data centers, there's two pieces. One is how profitable is it purely on the accelerator themselves?

Mark Moerdler: How you parlay the AI data center business into being the AI provider for sovereign clouds, and how that should impact the value of Oracle to Oracle. Thanks.

Speaker #7: We give guidance in the past that we see gross margin of the 30 to 40 percent range on that. That continues to hold for us.

Thank you very much for taking my question, and congratulations on what's a really good quarter. Um, really great work. Um, I'm going to change over a little bit, uh, and discuss on the financial side a little bit. Um, now that you've completed your major debt. Raise, can you explain given the blend of the cost of the AI building out the AI Data Center and the cost of raising Capital to fund? The AI data center? How comfortable are you with the values? You're creating from the AI Data Center business itself? And then as an adjacency, if you don't mind, can you talk a little bit more on The Sovereign Cloud? Can you discuss? How you parlay the AI?

Speaker #7: And as we continue to get better and better at running these data centers, delivering them more cheaply, optimizing the amount of cost of networking and hardware spend, as well as power, we see that continuing to incrementally improve.

Clay Magouyrk: Sure. I think we're gonna split this one up, Mark. This is Clay. I'll take the first half, and then I'm gonna throw it to Mike to talk about some of the sovereign cloud stuff. So look, when you think about the overall profitability of these AI data centers, there's two pieces. One is how profitable is it purely on the accelerators themselves? You know, we gave guidance in the past that we see gross margin in the 30 to 40% range on that. That continues to hold for us. And as we continue to get better and better at running these data centers, delivering them more cheaply, optimizing the amount of cost for networking and hardware spend as well as power, we see that continuing to incrementally improve.

Data Center business into being the AI provider for sovereign clouds, and how that should impact your—the value of or to Oracle.

Thanks, sure. I think we're going to split this one up. Uh,

Speaker #7: So we're very pleased with that. The other thing to understand is that in these AI data centers, whether it be for inferencing or for training workloads, the only thing being procured is not AI accelerators.

Speaker #7: There's a lot of general-purpose compute. There's a lot of whether it be high-performance or large-scale blob storage, there's load balancing, there's identity security products, etc., etc.

Speaker #7: Typically, on the order of 10 to 20 percent of the total spend ends up going to adjacent services. And when you factor that in, which have higher margins, depending on the mix of services, the overall profitability continues to improve.

Clay Magouyrk: We're very pleased with that. The other thing to understand is that in these AI data centers, whether it be for inferencing or for training workloads, only thing being procured is not AI accelerators. There's a lot of general purpose compute. There's a lot of whether it be high performance or large scale blob storage, there's load balancing, there's identity security products, et cetera, et cetera. Typically, on the order of 10 to 20% of the total spend ends up going to adjacent services. When you factor that in, which has higher margins, depending on the mix of services, the overall profitability continues to improve.

Speaker #7: And that's without taking into account, as I mentioned earlier about our multi-cloud database business, that that's a much higher margin business, more in the 60 to 80 percent range.

mark, this is Clay. I'll take the first half and then I'm going to throw it to Mike to talk about some of the Sovereign Cloud stuff. Um, so look, uh, when you think about the overall profitability of these AI data centers. There's, there's 2 pieces. 1 is, uh, how you know, how profitable is it, um, purely on the accelerator themselves, you know, we gave guidance in the past that we see, uh, you know, growth margin in the 30% range on that that continues to hold for us. Um and as we continue to get better and better at running these data centers, delivering them more cheaply, optimizing the amount of cost of for networking and and Hardware spend as well as power. Uh we see that continuing to incrementally improve so we're very pleased with that. The other thing to understand is that in these AI, uh, you know, data centers, whether it be for inferencing or for training workloads, um,

Only thing being procured is not.

Speaker #7: It's growing very, very rapidly. And so when you combine all of these pieces together, the overall margin profile of OCI continues to strengthen. And it grows rapidly.

Speaker #7: I mean, the thing I would say, the question that I think is underlies this, that maybe people don't understand, is the limitation on the profitability is not on the capacity we've delivered.

AI accelerators. There's a lot of general purpose compute. There's a lot of uh you know whether it be high performance or uh large-scale blob storage. Uh there's load balancing, there's identity, security products, etc, etc. Now typically on the order of 10 to 20% uh of the total spend ended up going to adjacent services and when you factor that in which has you know, higher margins. Uh so depending on on the mix of services

Clay Magouyrk: That's without taking into account, you know, as I mentioned earlier about our multi-cloud database business, that that's a much higher margin business, more in the 60% to 80% range. It's growing very, very rapidly. When you combine all of these pieces together, the overall margin profile of OCI continues to strengthen and grow rapidly. I mean, the thing I would say, you know, the question that I think underlies this that maybe people don't understand is the limitation on the profitability is not on the capacity we've delivered. Let's say that I'm building a data center, and it has 4 data halls, and I deliver the first data hall, that one's profitable.

Speaker #7: So let's say that I'm building a data center and it has four data halls. And I deliver the first data hall. That one's profitable.

Speaker #7: The reason that we're not even more profitable right now, despite the fact that we are continuing to grow EPS, etc., is because we have so much under construction at one time, and we have some expenses for those things.

Speaker #7: Now, we're very good at that. We're very, very good at minimizing the time under which that construction is happening. We're very, very good at reducing those costs during that time period.

The overall profitability continues to improve and that's without taking into account. You know, as I mentioned earlier about our multi Cloud database business that that's a much higher margin, business more in the 60 to 80 range. That's growing very, very rapidly. And so when you combine all of these pieces together, the overall margin profile of uh, oci continues to strengthen um, and grows rapidly. I mean that the thing. I, I would say, you know, the question that I think

Speaker #7: But they're not zero. And so as our business is going through this hypergrowth phase, that's the only drag on profitability. But thankfully, we're very good in getting better at delivering that capacity.

Clay Magouyrk: The reason that we're not even more profitable right now, you know, despite the fact that we are continuing to grow EPS, et cetera, is because we have so much under construction at one time, and we have some expenses for those things. Now we're very good at that, right? We're very, very good at minimizing the time under which that construction is happening. We're very, very good at reducing those costs during that time period, but they're not zero. As our business is going through this hypergrowth phase, that's the only drag on profitability. Thankfully, we're very good and getting better at delivering that capacity. That capacity, when we deliver it, is all already contracted for at a very profitable rate.

Speaker #7: That capacity, when we deliver it, is all already contracted for at a very profitable rate. So when you combine those things together, we're extremely confident in both the capacity we've delivered and the continuing to increase profitability of our AI business.

Understand is the, the, the limitation on the the profitability is not on the capacity we've delivered. So let's say that I'm building a Data Center and has 4 data Halls, uh, and I deliver the First Data Hall, that 1's profitable. The reason that we're not even more profitable right now, you know, despite the fact that we are continuing to grow EPS Etc, is because we have so much under construction at 1 time and we have some expenses for those things.

Speaker #7: Mike, do you want to talk about sovereign?

Speaker #6: Yeah. So sovereignty, as I mentioned earlier, I think we're very well positioned. A year ago, sovereignty was about data sovereignty. And there were some phone solutions in the market where there was sovereign data from a primary perspective, but DR and maybe somewhere else, maybe in another country.

Speaker #6: Of course, that's no longer acceptable. Sovereignty is about sovereign data, sovereign operations, and even sovereign contracting. Our alloy model is perfectly positioned to deliver on all three of those things.

Clay Magouyrk: When you combine those things together, we're extremely confident in both the capacity we've delivered and the continuing to increase profitability of our AI business. Mike's going to talk about sovereignty.

Speaker #6: And by delivering full stack, full stack solutions, again, the big difference between what we're doing with sovereignty and what some of our competitors are doing, we're not simply putting an edge sovereign zone in.

Mike Sicilia: Yeah. Sovereignty, you know, as I mentioned earlier, I think we're very well positioned. You know, a year ago, sovereignty was about data sovereignty, and there were some faux solutions in the market where there was sovereign data from a primary perspective, but DR maybe somewhere else, maybe in another country. Of course, that's no longer acceptable. Sovereignty is about sovereign data, sovereign operations, and even sovereign contracting. Our Alloy model is perfectly positioned to deliver on all three of those things. By delivering full stack solutions, again, the big difference between what we're doing with sovereignty and what some of our competitors is doing, we're not simply putting an edge sovereign zone in. We're putting full stack OCI, which has all of our OCI services.

Speaker #6: We're putting full stack OCI, which has all of our OCI services and, as you mentioned, margin mix, also allows us to run all of our application suite, our AI data platform, in that sovereign zone as well.

Speaker #6: And of course, the margins on some of those are different than our infrastructure margins. So I think that we're in a very unique position to deliver all that we have at Oracle in a sovereign zone.

Now, we're very good at it. We're very, very good at minimizing the time under, which that construction is happening. We're very, very good at reducing those costs during that time period, but they're not zero. Um, and so as our business is going through this hyper growth phase, that's the only drag on profitability. But thankfully, uh, we're getting, we're very good and getting better at delivering that capacity that capacity when we deliver it is, all already contracted for at a very profitable rate. So when you combine those things together, we're extremely confident in both the, the capacity that we delivered and the continuing to increase profitability of our AI business Mike's going to talk about problems. Yeah. So sovereignty. Uh, you know, as I mentioned earlier I think we're we're very well positioned. You know, a year a year ago sovereignty was about data sovereignty, and there were some flow Solutions in the market where, uh, there was, there was Sovereign data from our primary perspective but Dr. Maybe somewhere else, maybe in another country, of course that's no longer acceptable sovereignty is about the Sovereign data.

Speaker #6: That sovereign zone can be as small or as large as the customer wants it to be. The other piece is that we have full flexibility as to where we draw the line of sovereignty.

Speaker #6: We often think about sovereignty in terms of lines of customers, but we also have customers that we've been talking with, enterprise customers, who may operate across multiple countries, let's say in Europe or in Africa, that actually want to have a sovereign zone.

Mike Sicilia: As you mentioned, margin mix also allows us to run all of our application suite, our AI Data Platform in that sovereign zone as well. Of course, you know, the margins on some of those are different than our infrastructure margins. I think that we're in a very unique position to deliver all that we have at Oracle in a sovereign zone. That sovereign zone can be as small or as large as the customer wants it to be. The other piece is that we have full flexibility as to where we draw the line of sovereignty.

Speaker #6: A sovereign zone that they control and they operate and their data center and they're serving customers in a certain vertical industry like healthcare, for example, or retail, for example, and their sovereign zone is drawn in their alloy across those countries.

Several operations and even Sovereign Contracting. Our alloy model is perfectly positioned to deliver on all 3 of those things and by delivering full stack, full stack Solutions again, the big difference between what we're doing with sovereignty and what some of our competitors is doing, we're not simply putting an edge Sovereign Zone in. We're putting full stack oci which has all of our oci services. And, uh, as you mentioned margin, mix. Also allows us to run all of our application Suite, our AI data platform in that software Zone as well. Of course, the, you know, the the margins of some of those are are are different than our infrastructure margins. So I think that

Speaker #6: We can accommodate all of that. We have the most flexibility. We think we have the most flexibility in contract and the most flexibility in delivering.

Mike Sicilia: We often think about sovereignty in terms of lines of customers, but we also have, you know, customers that we've been talking with, enterprise customers who may operate across multiple countries, let's say in Europe or in Africa, that actually wanna have a sovereign zone. A sovereign zone that they control, and they operate in their data center, and they're serving customers in a certain vertical industry like healthcare, for example, or retail, for example, and their sovereign zone is drawn in their Alloy across those countries. We can accommodate all of that. We have the most flexibility. We think we have the most flexibility in contract and the most flexibility in delivering. Again, the most important thing is that we deliver all that Oracle has in these sovereign zones. It's not a subset, it's not a few edge devices, it's all of OCI.

Speaker #6: And again, the most important thing is that we deliver all that Oracle has in these sovereign zones. It's not a subset. It's not a few-edge devices.

Speaker #6: It's all of OCI. Extremely helpful, both the answers. I much appreciate it. And congrats again.

Speaker #8: Our next question will come from the line of a Raymo Lynch show with Barclays. Please go ahead.

Speaker #9: Perfect. Thank you. Congrats from me as well. I wanted to ask something that we are struggling a lot with when we talk to investors, and that's kind of the theme of SaaS software application software because AI is going to kill it.

Speaker #9: Just wanted to hear what you guys are hearing when you talk with customers. Is that one of these investor things? Is that getting discussed on the customer side as well?

We're in a very unique position to deliver all that. We have at Oracle in a sovereign Zone. That Sovereign Zone can be as as as small or, or, as large as the customer wants to be the other piece, is that we have full flexibility as to where we draw the line of sovereignty? Uh, we often think about sovereignty in terms of lines of customers. But we also have, you know, customers that we've been talking with Enterprise customers, who may operate across multiple countries, let's say in, in, in Europe, or in Africa, that actually want to have a sovereign Zone, a sovereign Zone that they control and they operate in their Data Center and their serving customers at a certain vertical industry, like healthcare, for example, or retail. For example, and their Sovereign zone is drawn in their alloy across those countries. We can accommodate all of that. We have the most flexibility. We think we have the most flexibility in contract and most flexibility and, and delivering. And again, the most important thing is that we deliver all that Oracle has in these Sovereign zones. It's not a subset. It's not.

Clay Magouyrk: Extremely helpful, both the answers. I much appreciate. Congrats again.

Mark Moerdler: Extremely helpful, both the answers. I much appreciate. Congrats again.

A few Edge devices, it's all of OCI.

Speaker #9: And how do you explain it? And I'm just thinking about what you guys do. It's a lot of deterministic rather than probabilistic. So that might probably be the explanation here.

Operator: Our next question will come from the line of Raimo Lenschow with Barclays. Please go ahead.

Extremely helpful. Both answers are much appreciated, and congrats again.

Raimo Lenschow: Perfect. Thank you. Congrats from me as well. I wanted to ask something that we are struggling a lot with, when we talk to investors, and that's kind of the theme of, SaaS software, application software is dead because AI is gonna kill it. Just wanted to hear what you guys are hearing when you talk with customers. Is that like some one of these investor things? Is that getting discussed on the, on the customer side as well? How do you explain it? I'm just thinking about like, you know, what you guys do is a lot deterministic rather than probabilistic. You know, that might probably be the explanation here, but just wanted to hear your perspective again. Thank you.

Our next question will come from the line of Aro Lynn with Barclays. Please go ahead.

Speaker #9: But just wanted to hear your perspective again. Thank you.

Speaker #10: Yeah. So this is Mike. I'll take the question. So as far as the customers that I spoke with, I've not yet met a customer who tells me they're ready to give away their retail merchandising system, their core banking system, demand deposit account systems, electronic health record systems, and some small cobbling together of niche AI features is going to replace all of that over and overnight.

Speaker #10: In fact, I hear quite the opposite from the customers. What they're asking us is, how can we get how can we consume as much AI out of the box?

Speaker #10: You're putting into your applications across the board. And how can we get that up and live as quickly as we possibly can? Because we think that's the best way to actually realize value.

Mike Sicilia: This is Mike. I'll take the question. As far as the customers that I spoke with, I've not yet met a customer who tells me they're ready to give away their retail merchandising system, their core banking system, demand deposit account systems, electronic health record systems, and some you know some small cobbling together of niche AI features is going to replace all of that overnight. In fact, I hear quite the opposite from the customers. What they're asking us is, How can we consume as much AI out of the box you're putting into your applications across the board, and how can we get that up and live as quickly as we possibly can?

Perfect. Thank you. Congrats from me as well. Um, I wanted to ask something that we are struggling a lot with the when we talk to investors and that's kind of the theme of um S software application software is that because AI is going to kill it. Um, just just wanted to hear what you guys are hearing when you talk with customers. Is that like some of these investor things is that getting discussed on the on the customer side as well. And and how do you explain it? And I'm just thinking about like, you know, what you guys do is a lot of deterministic rather than Pro probabilistic. So you know that might probably be the explanation here, but just wanted to hear your perspective again. Thank you.

Speaker #10: So look, these systems, what we're running at Oracle, as you know, these are highly complex mission-critical systems with we have decades of industry experience, decades of regulatory compliance.

Speaker #10: And these are the systems that run our customers use to run their business, run their government agency, run their healthcare organization, whatever the case is.

Speaker #10: I really like our position here as I said. We're leaning very heavily into AI ourselves. So we have 1,000 AI agents already live in infusion.

Mike Sicilia: Because we think that's the best way to actually realize value. Look, these systems what we're running at Oracle, as you know, these are highly complex mission-critical systems. We have decades of industry experience, decades of regulatory compliance. These are the systems that our customers use to run their business, run their government agency, run their healthcare organization, whatever the case is. I really like our position here. As I said, we're leaning very heavily into AI ourselves. We have 1,000 AI agents already live in Fusion. Our banking suite alone has hundreds of AI agents just inside our banking solution. Yes, we think AI is disruptive. We do, but we think we're the disruptor because we're actually embedding the AI right into our applications, full stop.

Yeah, so this is Mike, I'll take the question. So as far as the customers that I spoke with, I've not yet met a customer who tells me they're ready to give away their retail merchandising system, their core banking system demand deposit account systems, electronic health red systems and some uh, you know, some a small, cobbling together of Niche AIP features is going to replace all of that over and overnight. In fact, I hear quite the opposite from the customers. What they're asking is is how can we get, how can we consume as much AI out of the box and you're putting into your applications across the board? Um, and how can we get that up and live as quickly as we possibly can? Because we think that's the best way to actually realize realize value. So, look these systems

Speaker #10: Our banking suite alone has hundreds of AI agents just inside our banking solution. So yes, we think AI is disruptive. We do, but we think we're the disruptor because we're actually embedding the AI right into our applications.

What we're running?

Speaker #10: Full stop. Again, at no additional charge. These are features that come in in the application suite as part of quarterly upgrades, as part of a regular cadence.

Speaker #10: So I'm actually instead of being think that AI spells the death of SaaS, at least for Oracle, I think it actually helps our SaaS position and helps us get to market even more quickly.

Speaker #10: We're thrilled with the results that we have and expect to have a lot more color on this as we go forward.

Speaker #9: Okay. Thank you.

Mike Sicilia: Again, at no additional cost. These are features that come in the application suite as part of quarterly upgrades, as part of a regular cadence. Instead of thinking that AI spells the death of SaaS, at least for Oracle, I think it actually helps our SaaS position, and helps us get to market even more quickly. We're thrilled with the results that we have and, you know, expect to have a lot more color on this as we go forward.

Speaker #8: Our final question will come from the line of Brad Zelnick with Deutsche Bank. Please go ahead.

Speaker #11: Great. Thank you very much. And I'll echo my congrats. And also just say that the messaging is very, very clear and very helpful. My question is for Mike and perhaps Larry.

We have a 1000 AI agents already live in in, in Fusion, when our, our banking Suite. Alone has hundreds of AI agents just inside our banking solution. So, yes, we think AI is disruptive. We do. But we think we're the disruptor because we're actually embedding the AI right into our applications, full stop again. Uh, at no additional cards. These, These are features that come in in the application Suite as part of quarterly upgrades as part of as part of a regular Cadence. So I'm actually

Instead of being.

Speaker #11: And it extends on what Raymo has asked. You've introduced AI agent studio inside of Fusion and we all know that the crown jewels within an enterprise live inside of Oracle database and Oracle apps.

Raimo Lenschow: Okay. Thank you.

I think that AI spells the death of SAS, at least for Oracle. I think it actually helps our staff position and helps us get to market even more quickly. We're thrilled with the results that we have and, you know, expect to have a lot more color on this as we go forward.

Speaker #11: But I'm curious, how do you see Oracle's role evolving in a world where many other players are vying to be the AI interaction layer across multiple different enterprise systems and workflows?

Operator: Our final question will come from the line of Brad Zelnick with Deutsche Bank. Please go ahead.

Brad Zelnick: Great. Thank you very much. I'll echo my congrats and also just say that the messaging is very, very clear and very helpful. My question is for Mike and perhaps Larry, and it extends on what Raimo's asked. You know, you've introduced AI Agent Studio inside of Fusion, and we all know that the crown jewels within an enterprise live inside of Oracle Database and Oracle Apps. I'm curious, how do you see Oracle's role evolving in a world where many other players are vying to be the AI interaction layer across multiple different enterprise systems and workflows?

Our final question will come from the line of Brad Zelnik with D.

Please go ahead.

Speaker #10: So Brad, it's Mike. So I'll start. So look, I think data gravity matters here. And I think mission-critical data gravity matters even more. So as we said, we've announced the AI agent studio inside of Fusion.

Speaker #10: Fusion is a system. Inside our customers that is the custodian of their operational data, their mission-critical data. So if you're going to build a bunch of AI agents as or your system integrator is going to build a bunch of AI agents, the question I often have is where would you start?

Mike Sicilia: Brad, it's Mike. I'll start. Look, I think data gravity matters here, and I think mission-critical data gravity matters even more. As we said, we've announced the AI Agent Studio inside of Fusion. Fusion is a system inside our customers that is the custodian of their operational data, their mission-critical data. If you're gonna build a bunch of AI agents, or your system integrator is gonna build a bunch of AI agents, the question I often have is: Where would you start? Well, you'd start inside the system of record. You'd start inside the system of gravity because that is the data, from an inferencing standpoint, from retrieval-augmented generation standpoint, it's gonna be highly relevant and highly specific and add a bunch of context to AI.

Great, thank you very much, and I'll let go of my congrats. And also just say that the messaging is very, very clear and very helpful. Um, my question is for Mike and perhaps Larry— it extends on what Rho has asked. You know, you've introduced the AI Agent Studio inside of Fusion, and we all know that the crown jewels within an enterprise live inside of the Oracle database and Oracle apps. But I'm curious: how do you see Oracle's role evolving in a world where many other players are vying to be the AI interaction layer across multiple different enterprise systems and workflows?

Speaker #10: Well, you'd start inside the system of record. You'd start inside the system of gravity because that is the data from an inferencing standpoint, from retrieval augmented generation standpoint that's going to be highly relevant and highly specific and add a bunch of context to AI.

So, uh, Brad, it's Mike. So, so, so I'll start. So look, I, I think

Speaker #10: Now, the AI agent studio that we've released in Fusion is not just specific. It's not specific to just Fusion data. You can build AI agents across our industry applications, across third-party applications, third parties can build AI agents in there.

I think data gravity matters here and I think Mission critical data, gravity matters even more. So as we said we we've announced the AI Asian Studio inside of fusion. Uh Fusion is is a system inside. Organiz inside our customers that uh is the custodian of their operational data, their mission critical data. So, if you're going to build a bunch of the AI agents as a as a

Speaker #10: So the fact that we're delivering an all-in-one best of solution, a full-scale SaaS application, AI-powered SaaS applications, and giving you the ability to create your own AI agents either on top of that or next to that in a standard upgraded quarterly platform release schedule, I think is going to be quite attractive because this AI agent studio that we built in Fusion, it's part of our quarterly upgrades.

Mike Sicilia: Now, the AI Agent Studio that we've released in Fusion is not specific to just Fusion data. You can build AI agents across our industry applications, across third-party applications. Third parties can build AI agents in there. The fact that we're delivering, you know, an all-in-one best solution, a full-scale SaaS application, AI-powered SaaS applications, and giving you the ability to create your own AI agents, either on top of that or next to that in a standard upgraded quarterly platform release schedule, I think is going to be quite attractive. Because, this AI Agent Studio that we built in Fusion, it's part of our quarterly upgrades. It's part of our quarterly, our regular security patching. You're getting the best, we think, of both worlds.

Speaker #10: It's part of our quarterly our regular security patching. So you're getting the best we think of both worlds. You're getting packet SaaS applications, you're getting an agent studio, which is very, very close to the most mission-critical germane data that an enterprise possesses, and you're getting the ability to create your own custom bespoke agents if you'd like to as well.

Speaker #10: Yeah. I'll just end with we provide a bunch of pre-built agents for all of our applications. But in addition, we provide a development environment.

Warrior system, integrator is going to build a bunch of AI agents. The question I often have is where would you start? Well, you start inside the system of record. It's starting inside the system of gravity because that is the data, uh, from an inferencing standpoint from a retrieval augmented generation standpoint. It's going to be highly relevant and highly specific and add a bunch of context, uh, to AI. Now, the AI agent Studio that we've released in Fusion is not just specific. It's not specific to. Just Fusion data, you can build AI agents across our industry applications across third-party applications. Uh, third parties can build can build AI agents in there. So the fact that we're delivering, you know, in all-in-1 best of solution, a full-scale SAS application AI power, SAS applications and giving you the ability to create your own AI agents either on top of that or or next to that in a standard upgraded quarterly platform. Uh platform release schedule, I think is going to be uh quite attractive because uh, this AI agent Studio that we built the fusion. It's part of our quarterly upgrades. It's part of our, our quarterly

Speaker #10: The AI data platform, the development environment that allow our customers to easily add their own agents to what we've built. We don't think we can build all the application agents for a banking system or all the application agents for a healthcare system.

Mike Sicilia: You're getting package-based applications, you're getting an Agent Studio, which is very, very close to the most mission-critical, germane data that an enterprise possesses, and you're getting the ability to create your own custom bespoke agents, if you'd like to, as well.

Speaker #10: A lot of our partners are going to do that. A lot of our customers are going to do that. With the AI data platform does is it provides a complete integrated development environment where you can build your own agents using any AI model that is in the Oracle Cloud.

Larry Ellison: Yeah. I'll just end with we provide a bunch of pre-built agents for all of our applications. In addition, we provide a development environment, the AI Data Platform, the development environment that allow our customers to easily add their own agents to what we've built. We don't think we can build all the application agents for a banking system or all the application agents for a healthcare system. A lot of our partners are gonna do that, a lot of our customers are gonna do that. What the AI Data Platform does is it provides a complete integrated development environment where you can build your own agents using any AI model that is in the Oracle Cloud, and that is basically all of the popular AI models. You can use it for coding the agent.

Our regular security patching, so you're getting the best. We think of both worlds; you're getting packets, best applications. Uh, you're getting an Asian studio, which is very, very close to the most mission-critical, uh, germane data an enterprise possesses. And you're getting the ability to, uh, to create your own custom, bespoke agents, uh, if you, if you'd like to, uh, as well. Yeah. I'll just, um, end with, uh, we provide a bunch of pre-built agents for all of our applications.

Speaker #10: And that is basically all of the popular AI models. You can use it for coding the agent. You can use it you do multi-step reasoning for queries.

Speaker #10: You can we plan in our Fusion accounting system, for example, we will have a complex agent that does something called the clothes. So when you close your books with Fusion and the not-too-distant future, it will be an autonomous agent: no human beings involved.

Speaker #10: You will close your books by simply telling the AI agent to go ahead and close your books. And then you will get your results.

Uh, but in addition, we provide a development environment—the AI data platform to development environment—that allows our customers to easily add their own agents to what we built. We don't think we can build all the application agents for our banking system, or all the application agents for the healthcare system. A lot of our partners are going to do that. A lot of our customers are going to do that. What the AI data platform does is it provides a complete, integrated development environment where you can build your own agents using any AI model that is in the Oracle Cloud.

Larry Ellison: You can use it, yeah, you do multi-step reasoning for queries. We plan in our Fusion accounting system, for example, we will have a complex agent that does something called the close. When you close your books with Fusion in the not-too-distant future, it will be an autonomous agent, no human beings involved. You will close your books by simply telling the AI agent to go ahead and close the books, and then you will get your results. We provide a lot of AI capability built into our applications, but they are open. They are open that allow our customers and our partners to add to that portfolio of agents, and we build an entire ecosystem that automates healthcare, automates financial services, automates retail.

Speaker #10: We provide it. We provide a lot of AI capability built into our built into our applications, but they are open. They are open that allow our customers and our partners to add to that portfolio of agents.

And that is basically all of the popular AI models. You can use it for coding the agent, you can uh use it. Uh you know, you do multi-step reasoning for for queries. You can you we we plan in our in our Fusion accounting system. For example, we will have a complex agent. That does something called the clothes,

Speaker #10: And we build an entire ecosystem that automates healthcare, automates financial services, automates retail. That is what AI is allowing us to do is to expand our horizons for the scope of the suites of the SaaS software we're building to automate entire ecosystems.

So, when you close your books with Fusion, in the not too distant future, it will be an autonomous agent. No human beings involved. You will close your books by simply telling the AI agent to go ahead and close your books, and then you will get your results.

Um,

Speaker #10: Let me talk about healthcare. In healthcare, Epic automates hospitals, acute care hospitals. In some cases, clinics, but primarily acute care hospitals. We automate acute care hospitals.

Speaker #10: We automate clinics. We automate laboratories. Well, we automate the payers, the people who actually maybe we automate the insurance companies. We automate the HCM system, the trains their nurses.

Larry Ellison: That is what AI is allowing us to do, is to expand our horizons for the scope of the suites of the SaaS software we're building. To automate entire ecosystems. Let me put it this way, talk about healthcare. In healthcare, Epic automates hospitals, acute care hospitals, in some cases clinics, but primarily acute care hospitals. We automate acute care hospitals. We automate clinics. We automate laboratories. Well, we automate the payers, the people who actually pay the. We automate the insurance companies. We automate the HCM system that trains their nurses, that schedules to get the right radiologist, when an MRI is given. That automates the hospital's financials. That also automates the FDA and that approves the latest drugs, that deals with the pharmaceutical companies. That's the healthcare ecosystem. It's enormous.

Speaker #10: The schedules their right radiologist. When an MRI is given, that automates the hospital's financials, that also automates the FDA, and the approves the latest drugs, that deals with the pharmaceutical companies.

And our horizons for the scope of these suites of a SaaS software building to automate entire ecosystems—let me talk about healthcare. Epic automates hospitals, acute care hospitals.

Speaker #10: That's the healthcare ecosystem. It's enormous. And thank God we have these coding tools now that allow us to build a comprehensive set of software: agent-based software, to automate a complete ecosystem like healthcare, or financial services.

Speaker #10: That's what we're doing at Oracle. That's why we think we're a disruptor. That's why we think the SaaS apocalypse applies to others, but not to us.

Speaker #11: Really great stuff. Thank you, Larry. Thanks, Mike, and congrats.

Larry Ellison: Thank God we have these coding tools now that allow us to build a comprehensive set of software, agent-based software, to automate a complete ecosystem like healthcare or financial services. That's what we're doing at Oracle. That's why we think we're a disruptor. That's why we think the SaaSpocalypse applies to others, but not to us.

Speaker #10: Thank you, Brad, a telephone replay of the conference call will be available for 24 hours on our investor relations website. Thank you for joining us today.

Speaker #10: And with that, I'll turn the call back to Regina for closing.

Uh, and some cases clinics, but primarily acute care hospitals. We we automate acute care. Hospitals, we automate clinics. We ought to make Laboratories? Will we automate the payers? The people who actually, maybe we automate the insurance companies. We we automate the HCM system, the trains their nurses, that the schedules, their the right Radiologists. Uh, when, when an MRI is given that, that automates, the hospital's financials that also automates the FDA and the, uh, that approves, the latest drugs that deals with the pharmaceutical companies. That's the healthcare ecosystem, it's enormous. And thank God. We have these coding tools. Now that allow us to build a comprehensive set of software, agents based software to implement to automate a complete ecosystem like healthcare or financial services. That's what

Brad Zelnick: Really great stuff. Thank you, Larry. Thanks, Mike, and congrats.

We're doing it at Oracle. That's why we think we're a disruptor. That's why we think the Assassin apocalypse applies to others, but not to us.

Really great stuff. Thank you, Larry. Thanks, Mike, and congrats.

Ken Bond: Thank you, Brad.

Operator: Rick Batto.

Ken Bond: A telephone replay of the conference call will be available for 24 hours on our investor relations website. Thank you for joining us today. With that, I'll turn the call back to Regine for closing.

Operator: This will conclude today's call. Thank you all for joining. You may now disconnect.

Thank you, Brad. A telephone replay of the conference call will be available for 24 hours on our investor relations website. Thank you for joining us today. And with that, I'll turn the call back to Regina for closing.

We'll conclude today's call. Thank you all for joining. You may now disconnect.

Q3 2026 Oracle Corp Earnings Call

Request a DemoDemo

ORCL

Oracle

Earnings