Oracle Corporation (NYSE:ORCL) Q2 2023 Earnings Call Transcript

Safra Catz: So contrary to, I think, the fears the people always have, the Oracle database is still the biggest part of license by far. So most important part, the database remains strong because customers understand that they can BYOL, bring your own license, and they can have coverage whether they’re on-premise in the cloud or moving in between the two, so again, really always the big number. But we’ve got growth rates that are very strong in analytics. We have growth rates that are super strong in Java, we have growth rates that are strong in the industry’s areas, some of our industry’s applications. And then — so I want to make sure I gave you the numbers both ways. With Cerner, we have a growth rate of 23% because, of course, you add the Cerner license.

Without Cerner, it’s 9% growth. So, even without Cerner, we have license growth after a very strong growth rate a full year ago in license. So, again, big dog is, of course, technology. That’s the bulk of it. But we’ve got a few industry apps and a little bit of Cerner. And it just remains just super strong.

John DiFucci: Okay. That makes sense. It sounds like a lot of things are working together here. Thank you. Thank you very much.

Safra Catz: Absolutely.

Operator: And we’ll go next now to Mark Moerdler at Sanford Bernstein.

Mark Moerdler: Thank you very much for taking question. I really appreciate the ability to ask the question, and congratulations on the quarter. Two related questions on Cerner. Safra, where are we on the Cerna integration process as well as taking out the cost? And where do you think you can drive those long-term costs over time. And Larry, we heard a lot of great features at Oracle World about Cerner and what you going to do in healthcare. It’d be interesting to hear what progress you’ve made recently. Thanks.

Safra Catz: Sure. So Mark, we’ve owned Cerner for about five months. And I will tell you that they continue to do better than we had projected internally. So, we’re very, very happy. But we are still at the beginning. We don’t want to do anything that will damage the business. And of course, we’re very, very focused on those customers. But we are already having some level of savings. But ultimately, just so that you understand, our expectation is we will run them at typical Oracle margins. So, we’ve got quite a way to go. And I think over the next couple of quarters, you’ll see continued improvement as we’ve done some of our operational integration. And simultaneously, I think they continue to over perform for us. So, we are doing this in a very careful way. So, it’s not to put any issues for our customers and making sure they’re successful. On the technical side, Larry, that’s for you.

Larry Ellison: Yes. Well, actually, on the technical side, of course, what we’re trying to do is build — not just provider systems. In other words, what Cerner did primarily in competition with EPIC is the automated hospitals. And yes, we want to automate hospitals and clinics and doctors’ offices and do that. We certainly want to automate providers. But we’re layering on top of that is we want to do national public health. We are doing national public health systems. I mentioned Oxford Nanopore that’s an early warning system to detect the next pathogen that could lead to a pandemic. These global public health systems need to be built. And we are in discussions. We are in discussions with not companies, but countries about building and deploying a global early warning system so we can detect the next pathogen that threatens to turn into a pandemic, we can catch it early enough that we can prevent it from being a pandemic.