Oracle Corporation Q2 FY2020 Earnings Call

· Earnings call transcript and AI-powered summary

Overall Performance

  • Total quarterly revenue was $9.6 billion, up 1% year-over-year (YoY), consistent with management’s guidance.
  • Non-GAAP EPS was $0.90, up 13% in constant currency (12% in USD). GAAP EPS was $0.69, up 15% in constant currency.
  • Cloud Services and License Support revenue reached $6.8 billion, up 3% YoY and representing more than 70% of company revenue.
  • Cloud and on‑premise license revenue was $1.1 billion, down 7% as more customers opted for cloud deployment over traditional licenses.
  • Operating margin was 42%, a slight decline from 43% last year.
  • Operating cash flow over the last four quarters was $13.8 billion; free cash flow was $12.2 billion.

Business Segment Highlights

Applications
  • GAAP application ecosystem revenue was $2.9 billion, up 4% YoY.
  • Fusion Applications grew in the low-30% range; Fusion ERP up 38%, Fusion HCM up 23%.
  • NetSuite ERP grew 28%.
  • Vertical SaaS grew in the low double digits; Oracle Data Cloud stabilized after prior declines, providing relief from a major headwind.
  • Over 90% of application revenue on a trailing twelve‑month basis is recurring.
Infrastructure & Database
  • GAAP infrastructure ecosystem revenue was $5 billion, up 1% YoY.

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Operator: Welcome to Oracle’s Second Quarter 2020 Earnings Conference Call. Now, I’d like to turn the call over to Ken Bond, Senior Vice President. Ken? Ken Bond: Thank you, Holly. Good afternoon, everyone, and welcome to Oracle’s second quarter fiscal year 2020 earnings conference call. A copy of the press release and financial tables, which includes a GAAP to non-GAAP reconciliation and other supplemental financial information can be viewed and downloaded from our Investor Relations website. On the call today are Chairman and Chief Technology Officer, Larry Ellison; and CEO, Safra Catz. As a reminder, today’s discussion will include forward-looking statements, including predictions, expectations, estimates, or other information that might be considered forward-looking. Throughout today’s discussion, we will present some important factors relating to our business, which may potentially affect these forward-looking statements. These forward-looking statements are also subject to risks and uncertainties that may cause actual results to differ materially from statements being made today. As a result, we caution you against placing undue reliance on these forward-looking statements and we encourage you to review our most recent reports, including our 10-K and 10-Q and any applicable amendments for a complete discussion of these factors and other risks that may affect our future results or the market price of our stock. And finally, we are not obligating ourselves to revise our r

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