Oracle Corporation (NYSE:ORCL) Q4 2025 Earnings Call Transcript

Oracle Corporation (NYSE:ORCL) Q4 2025 Earnings Call Transcript June 11, 2025

Oracle Corporation beats earnings expectations. Reported EPS is $1.7, expectations were $1.64.

Operator: Hello and welcome to the Oracle Corporation Fourth Quarter and Full Year 2025 Earnings 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. I would now like to turn the conference over to Ken Bond, Head of Investor Relations. Please go ahead.

Ken Bond: Thank you, Sarah, and good afternoon, everyone, and welcome to Oracle’s fourth quarter and fiscal year 2025 earnings conference call. A copy of the press release and financial tables, which includes a GAAP to non-GAAP reconciliation and other supplemental financial information can be viewed and downloaded from our Investor Relations website. Additionally, a list of many customers who purchase Oracle Cloud Services or went live on Oracle Cloud recently will be available from our Investor Relations website. On the call today are Chairman and Chief Technology Officer, Lawrence Ellison and Chief Executive Officer, 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 the 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-Ks and 10-Qs and any applicable amendments for a complete discussion of these factors and other risks that may affect our future results or market price of our stock. And finally, we are not obligating ourselves to revise our results or these forward-looking statements in light of new information or future events.

Before taking questions, we will begin with a few prepared remarks. And with that, I’d like to turn the call over to Safra.

Safra Catz: Thanks, Ken, and good afternoon, everyone. As you can see, we had an excellent finish to an amazing year. With Q4 total revenue and EPS both exceeding my guidance. We are reporting our fiscal year-end results just eleven days after the last day of the quarter. Using Oracle Fusion, we continue to announce our quarterly and annual financial results faster than any other company in the S&P 500. Now a few years ago, I told you that we had reached a tipping point in our cloud transition and expected revenue growth to accelerate. And it has. In Q4, we hit double-digit revenue growth and it’s only going up from here. Even as the company gets bigger. Our remaining performance obligations now stand at $138 billion, up $8 billion from last quarter and up 41% from last year.

Q&A Session

And yet, the best is still to come. Our applications business was the area we moved to the cloud more than a decade ago and we are now the leader in enterprise back office with SaaS solutions for ERP, Financials, EPM, HCM, supply chain, and manufacturing. With the addition of over 100 AI agents along with strong bookings and higher renewal rates for our strategic SaaS products, I expect the cloud applications growth rate will accelerate this coming year. Our infrastructure business was the next area to move to the cloud. We made engineering decisions that were much different from the other hyperscalers and that were better suited to the needs of enterprise customers resulting in lower costs to them and giving them deployment flexibility. OCI has seen exceptional demand for infrastructure services and those contracted non-cancelable bookings in RPO give us confidence that OCI revenue will grow over 70% this current year.

Included in that is the Oracle Autonomous Database and the AI data platform. Enterprises know that their AI needs demand the most capable database to manage a company’s full dataset further with our AI and autonomous features, our customers can bring all their data together, make it available for LLMs, and yet have the best security built in. In addition, our customers have the flexibility to run their Oracle databases in OCI, in private clouds, or in partner clouds with our multi-cloud offering. But what is clear is that more customers will use the Oracle database to leverage AI. So as a result of the strength in our cloud applications and infrastructure including database services, we are raising our revenue guidance for fiscal year 2026 to over $67 billion, up 16% for the year.

Now for the results. And as usual, I’ll be discussing our financials using constant currency growth rates as it is how we manage the business. Total cloud revenue SaaS plus IaaS was up 27% at $6.7 billion. And total cloud services and license support revenue for the quarter was $11.7 billion, up 14%. IaaS revenue was $3 billion, up 52% on top of the 42% growth reported last year. OCI consumption revenue was up 62% and demand continues to dramatically outstrip supply. Our infrastructure cloud services now have an annualized revenue of nearly $12 billion. Cloud database services which were up 31% now have annualized revenue of $2.6 billion. Autonomous Database consumption revenue was up 47% on top of the 27% growth reported last year. As on-premise databases migrate to the cloud, either on OCI directly or through our database at cloud services with Azure, Google, or AWS, we expect that cloud database revenues collectively will be the driver of revenue growth alongside OCI and strategic SaaS.

We are currently live in 23 cloud regions with database at cloud services and have another 47 planned. Database subscription revenues which include database license support were up 7%. Infrastructure subscription revenues in the quarter which includes license support, were $6.7 billion, up 19%. SaaS revenue was $3.7 billion, up 11%. Application subscription revenues, which includes support, were $5 billion, up 8%. Our strategic back office SaaS applications now have annualized revenues of $9.3 billion and they were up 20%. Software license revenues were up 8% to $2 billion. So all in, total revenues for the quarter were $15.9 billion, up 11% from last year. Operating income grew 7%. Non-GAAP EPS was $1.70 in U.S. Dollars while GAAP EPS was $1.19 in U.S. Dollars.

The non-GAAP tax rate for the quarter was 19.7% which was higher than my 19% guidance. For the full fiscal year, total company revenue was $57.4 billion, up 9%. Total cloud services and license support revenue which is entirely based and accounts for 77% of total revenue was $44 billion, up 12%. Total application subscription revenue grew 7% and infrastructure subscription revenues grew 17%. Total cloud services were up 24% to $24.5 billion. IaaS or cloud infrastructure revenue was up 51% to $10.2 billion for the quarter with consumption revenue up 59% from last year. SaaS revenue was up 10% to $14.3 billion for the year. Non-GAAP EPS for the full year was $6.00 in USD, up 9% and full year operating income grew 9%. As mentioned, remaining performance obligation at the end of Q4 is now $138 billion, up 41% in USD.

Further, our cloud RPO grew 56% on top of the 80% growth last year and now represents nearly 80% of total RPO. And approximately 33% of total RPO is expected to be recognized as revenue over the next twelve months. For the year, operating cash flow was up 12% at $20.8 billion and free cash flow was a negative $400 million with $21.2 billion of CapEx. Operating cash flow for Q4 was $6.2 billion while free cash flow was a negative $2.9 billion with CapEx of $9.1 billion. The vast majority of our CapEx investments are for revenue-generating equipment that is going into data centers and not for land or buildings. I expect that FY 2026 CapEx will be higher at over $25 billion as we work to meet demand from our backlog. As we bring more capacity online, our revenue and profit growth will further accelerate.

At quarter end, we had $11.2 billion in cash and marketable securities. The short-term deferred revenue balance was $9.4 billion. We are committed to returning value to our shareholders through technical innovation, strategic acquisitions, stock repurchases, prudent use of debt, and a dividend. This quarter, we repurchased a little over 1 million shares for a total of $150 million, and over the last ten years, we’ve reduced shares outstanding by more than a third at an average share price of just over $54. In addition, we have paid out dividends of $4.7 billion over the last twelve months and the Board of Directors again declared a quarterly dividend of $0.50 per share. Since it’s the beginning of FY 2026, I’d like to comment on the financial acceleration we expect to see in the coming years.

Between our $138 billion RPO and even larger pipeline we have a clear line of sight to future revenue growth. So for fiscal year 2026, I expect that total cloud revenue will grow over 40% in constant currency, up from 24% in FY 2025. I expect the cloud infrastructure revenue will grow over 70% up from 51% in FY ’25. I expect total revenue will be at least $67 billion, up 16% in constant currency. And up more than $1 billion from our prior guidance. RPO is likely to grow more than 100% in fiscal 2026. And lastly, I expect we will exceed the revenue growth target we previously provided for FY ’27. Beyond FY ’27, I am even more confident in our ability to meet and likely exceed our previously provided FY ’29 target. We will provide a more fulsome update on our long-range financial targets at the financial analyst meeting at Oracle Cloud World in Las Vegas in October.

Now let me turn to my guidance for Q1 which I’ll review on a non-GAAP basis. Now assuming currency exchange rates remain the same as they are now, currency should have a $0.02 positive effect on EPS and a flat to 1% positive effect on revenues depending on rounding. However, of course, the actual currency impact may be different. Total revenues are expected to grow from 11% to 13% constant currency, are expected to grow from 12% to 14% in U.S. Dollars. Total cloud revenue is expected to grow from 26% to 30% in constant currency and U.S. Dollars. Non-GAAP EPS is expected to grow between 4% to 6% and be between $1.44 and $1.48 in constant currency. Non-GAAP EPS is expected to grow between 5% to 7% and be between $1.46 and $1.50 in USD. Lastly, my EPS guidance assumes a base tax rate of 19%, however, one-time tax events could cause actual tax rates to vary.

We had a great year. And this year, the one we’re in now, will be better. Oracle is well on its way to being not only the world’s largest cloud application company, but also one of the world’s largest cloud infrastructure companies. And with that, I’ll turn it over to Larry for his comments.

Lawrence Ellison: Thank you, Safra. Oracle’s future is bright in this new era of cloud computing. Oracle will be the number one cloud database company. Oracle will be the number one cloud applications company. And Oracle will be the number one builder and operator of cloud infrastructure data centers. We will build and operate more cloud infrastructure data than all of our cloud infrastructure competitors combined. Most of the world’s most valuable data is stored in an Oracle database. All of those databases are moving to the cloud. Oracle’s cloud, Microsoft’s Azure cloud, Amazon’s cloud, or Google’s cloud. Oracle runs everywhere. The latest vector version of the Oracle database Oracle 23AI, is an AI data platform. The only database that can make all of the customers’ data immediately available to all of the popular AI large language models.

While maintaining complete data privacy for the customer. As use of AI increases, so will Oracle’s database market share. Oracle will be the largest and most profitable cloud applications company in the world. Oracle developed suites of integrated AI agent-based applications for ERP, for EPM, supply chain, manufacturing human resources and customer engagement. Plus industry applications for healthcare, banking, utilities, retail, hospitality and many other industries. We use the most modern application generators and AI database technology to build our application suite and then we add AI analytics using OpenAI, XAI, Google, LAMA, and other popular LLMs. On top of that application data. No other company is even attempting to build the depth and breadth of AI-based applications that we have already built.

Oracle will build more cloud infrastructure data centers than all of our infrastructure competitors combined. All of our OCI data centers from the smallest low-cost data center to the largest gigawatt AI training data center include all Oracle OCI capabilities. A large percentage of those capabilities are autonomous. So labor costs are minimized and human error is dramatically reduced. Oracle is already prospering in this new era of cloud computing and AI. And it’s just the beginning. Back to you, Safra.

Safra Catz: Thank you, Larry. Before we go to the Q&A, just to repeat one number. FY 2025 cloud infrastructure revenue was up 51% to $10.2 billion for the year, consumption revenue up 59% from last year. Sarah, if you could please poll the audience for questions.

Operator: Thank you. Your question comes from Mark Moerdler with Bernstein. Your line is open.

Mark Moerdler: Thank you very much for taking my question, Larry, Safra. And the whole Oracle family, congratulations on the strong quarter. And the strong year. You’ve been promising and are now starting to deliver extraordinary growth acceleration. Something we’ve not seen at other very large software companies. Yet there’s a lack of understanding across the street of your AI business. Can you give us color or break out any numbers to help investors understand the durability and profitability of the AI business. Thanks.

Lawrence Ellison: Okay. Well, the interesting thing is a lot of people are talking about that they have all the data. So these other companies say they have all the data. So they can do AI really well. They can build all these AI agents on top of all of that data. The only problem with that statement is they don’t have all the data we do. We have most of the world’s valuable data. The vast majority of it is in an Oracle database. The latest version of the Oracle database is an AI-centric piece of technology, a vector database, called Oracle 23AI. So what it does is it allows it it’s the key enabler for companies to use AI. Using AI I mean, the current AI models are trained on the Internet. Otherwise known as publicly available data.

Do you think JPMorgan Chase makes all of their internal data publicly available? Do you think those AI models train on JPMorgan Chase’s data? Companies want to be able to use AI models on top of their own data. That is essential. Oracle applications make all of the data inside the Oracle applications available to AI models like Grok or ChatGPT or all by the way, all the rest of them from Google, from whomever, from Meta, you know, Lama, all of us, We have all of those all of those LLMs are in our cloud. Or in the Oracle Cloud. So this is our value proposition. Our database takes all of your data. Our applications take all of your application data. And make that data available to the, you know, the most popular AI models, like, if you like ChatGPT, you use ChatGPT.

If you like Grok, you use Grok. You use that in the Oracle Cloud. We are the key enabler for enterprises to use their own data and models. No one else is doing that. That makes sense. It’s a huge this is not a small point. This is why our database business is going to grow dramatically. About it, you have to put all of your data into a database. So that database must be highly secure. It must be scalable. It must be economical. It must be reliable seven days a week, twenty-four hours a day. It has to be fault-tolerant. It can never break. That’s how Oracle got popular in the first place. But then it has to hold the data in a way that’s by the AI models. In other words, the data has to be vectorized. And searchable, by the AI models. And you use that data to train up those models on your data.

Who else is doing that? Let me answer the question. Nobody. Next question please.

Operator: Thank you. The next question comes from John DiFucci with Guggenheim. Your line is open.

John DiFucci: Thank you. Hi, Larry and Safra. Safra, your quote in that press release that you repeated on this call about next year was pretty amazing and a strong statement as I’ve seen you make. And I’ve known you a long time. Putting that in print means a lot to me because I know it means a lot to you. Can you help us unpack that statement a bit? For instance, is Stargate part of the more than 70% growth you expect in IaaS in fiscal 2026? And we don’t know the timing of Stargate or even your financial share. Like, we know those big numbers out there, but not how much of it’s yours or you’re gonna be involved. But is Stargate also in the RPO growth of more than 100% in fiscal 2026? And any other color beyond Stargate to help us get our heads around those massive growth numbers for IaaS would be helpful.

Safra Catz: Thanks, John. And, yeah, we have known each other a very long time, longer than I care to admit. So the reality is that Stargate is still in formation. There are a lot of partnerships we are in the middle of right now. That are all part of this enormous growth rate. We are the destination for everyone who wants AI workloads, who want database workloads, and want applications. We are really and all of that together comes into our RPO. We have so much in pipeline right now that, and of course, we have so much in our RPO, meaning those are non-cancelable contracts. And we see the demand. I am still in a position where our supply is not meeting our demands. We actually currently are still waving off customers from, or scheduling them out into the future so that we have enough supply to meet demand.

This is a situation we have not seen in our history. And the numbers themselves are so enormous. The reason is because our technology is different. As Larry has said on previous calls, the cloud we built runs faster and has more capabilities than our competitors and is built for enormous amounts of data. And so we are very much the destination of choice. As Stargate forms, that will contribute into all of this. But, some of our partners many of our partners some of them will be in Stargate. Some are outside of Stargate. We really are working with many, many companies right now. Have enormous pipeline as a result.

Lawrence Ellison: Let me chime in here also a little bit. Let me surprise you with there are huge contracts that have nothing to do with even AI. We got a gigantic contract from TIMU that would have been unprecedented except for all the other gigantic contracts we’re also been getting. But, TIMU is a very large company that’s growing extremely rapidly. And they are basically moving their infrastructure to the Oracle Cloud. That was a very big contract. We’re seeing huge growth in multi-cloud from the data centers we’ve already built and the data I mean, if it’s revenue, it’s obviously data centers we already built. But the future the growth rate in multi-cloud is astonishing. In other words, our database is now moving very rapidly to the cloud I think because a few reasons.

Because the database has now all these AI capabilities, but also, quite frankly, now people can get it in whatever cloud they want. If you’re dedicated to using Azure, you can get the Oracle database in Microsoft Azure. The fully capable Oracle database in Microsoft Azure with all of our fanciest features, including the new AI features. You can get it at Amazon. You can get it at the Oracle Cloud. It’s all the same in every place. And that’s given our customers a lot of comfort that Oracle is not only where they store all of their current data, but they wanna keep using the Oracle database and move all of that data to the cloud as quickly as they can they’re now able to do it at the place of the cloud of their choosing. The database business is growing rapidly.

This next generation of companies like ByteDance, TikTok, which obviously we do business with them, T Moves and other But Uber, I mean, there are just lots of these companies. A bunch of the security companies have moved to the Oracle Cloud. It’s growth coming from many, many different directions.

Safra Catz: So if I could just so Stargate is just part of it. There’s a lot of things happening here.

John DiFucci: But it I just wanted just to clarify, it sounds like it’s part of RPO but is also part of that 70% in IaaS revenue growth too?

Safra Catz: Stargate is not formed yet. But some of our business with OpenAI, which is one of our partners, in Stargate, is part of our future. Very much so. But do you understand? We work with OpenAI. Those are still small numbers. In the scheme of everything else we’re doing. But it will ultimately be bigger.

John DiFucci: Got it. Thank you very much.

Lawrence Ellison: Next question please. Let me add one little thing. If Stargate turns out to be everything is advertised then we’ve understated our RPO growth.

Operator: Correct. The next question comes from Ben Reitzis with Melius Research. Your line is open.

Ben Reitzis: Hey, thanks, Safra, Larry. Great to be speaking with you today. Nice presentation. Your CapEx in the quarter was much higher than expected, I mean, $5 billion more than we expected to get to the ’21. And now you’re thinking about it going to 25. You want a little more color on what it was spent on? How was it helping you yield more revenue? And how do you know 25 is the right number? For this year? And, usually, I have some pretty good color on architecture. When you answer this question. So I’m looking forward to that as well.

Safra Catz: Okay. So let me start and let Larry make it perfect. The reality is that as I mentioned on the call, our CapEx is usually about equipment. We’re not a we have building partners who charge us rent once they’ve finished constructing things. And when we all of a sudden have higher CapEx, it means we are filling out data centers, and we are buying components to build our computers, which are different than other people’s and we are putting them on the floor. We had an opportunity to buy up and, for deployment and so we did. And we are putting out as much capacity as we possibly can as quickly as we can. I do believe that the $25 billion next year may turn out to be understated. So it is all to meet demand. We don’t order. We don’t build. Unless we’ve got orders for our capacity to be built out. And we have so much in orders right now that I actually expect I believe I said on the call over $25 billion this next quarter. And that is, again, to match demand.

Lawrence Ellison: We recently got an order that said we’ll take all the capacity you have wherever it is. This could be in Europe, could be in Asia, we’ll just take everything. I mean, we never got an order like that before. We had to move things around. We did the best we could, to give them the capacity they needed. The demand is astronomical. Now we have to but we have to do this methodically. The reason demand continues to outstrip supply is we can only build these data centers build these computers so fast. And we’re also doing a lot of engineering around high-speed networking. You’ll see us making we are making large engineering investments to speed up the networking, the reliability of the networking, lower the cost of the networking.

So we’re doing a bunch of things we are doing a bunch of things to lower our CapEx costs. But even if we do that CapEx is going to go up because the demand right now seems almost insatiable. I mean, I don’t know how to describe it. I’ve never seen anything remotely like this. I mean, people are calling up and asking us, please, can you find us more capacity? We’ll take it wherever. Oh, it’s in Malaysia. We’ll take it there. Fine. We’ll take it there. You got some of wherever.

Ben Reitzis: Are you having any trouble getting GPUs?

Lawrence Ellison: No. No. Not right now.

Ben Reitzis: Got it. Thanks so much color, guys. Appreciate it. Next question please.

Operator: The next question comes from Siti Panigrahi with Mizuho. Your line is open.

Siti Panigrahi: Great. Thanks and congratulations on a strong Q4 and impressive guidance. I wanna go back to the cloud database. Mainly, you have massive data database on-prem. So what are you hearing from customers in terms of migrating to cloud? Now you have multi-cloud strategy. Have dedicated alloy customer. And, Safra, what’s your expectation on that cloud database revenue contribution or driving that 70% growth of OCI in our fiscal 2026?

Safra Catz: Okay. Let me just start. So first of all, the database business is really healthy. Really growing. In fact, you even see it in the number that I think folks didn’t think was possible, which is in license. You should understand that when our customers are buying more licenses, that actually means often that they would wanna use the bring your own license pricing to go to the cloud. So database support is up. Is solid, license is up, all the cloud metrics, autonomous consumption, Oracle Cloud, all of multi-cloud is basically using up all capacity that gets put out there. So the Oracle database is on fire. And it is only the beginning. I wanna remind you what a significant and large business it is. And the bulk of it is still on-premise.

As Larry said, now that you can have it in any of the clouds you like as with the at database, you know, at Oracle. In all of the in all the other clouds also beyond just OCI, or you can deploy it at cloud at customer. Another place where the numbers are enormous in growth rates. So consumption going way up, more licensing, more bookings, and a lot of demand. And the database side of the world for all the reasons Larry said, is just a superb business and extremely compelling especially to the extent you want to leverage artificial intelligence.

Lawrence Ellison: You asked for a number, an easy number to figure out. So let’s say 10% or $10 billion of our support revenue, our database support revenue moves to the cloud. So that becomes at least $50 billion because it includes all the computers. And all the networking and all of that. So the support was just 20% of the license fee. So you move $10 billion of our database to the cloud. It becomes at least $50 billion in cloud revenue. It’s almost as big as Oracle is now.

Siti Panigrahi: Thanks Larry and Safra.

Operator: The next question comes from Raimo Lenschow with Barclays. Your line is open.

Raimo Lenschow: Thank you. Congrats from me as well. One subject we haven’t really talked about was applications, but all the excitement around OCI, like, I you do get enough credit on applications. Can you talk a little bit about what’s going on there? Because I had to go back to my model quite a bit to see 22% growth on Fusion. And the outlook looks really strong as well. And you talked about accelerating growth there. With all the worries about tariffs and stuff like that, I kind of I’m surprised to see kind of these very, very good numbers from you. Can you maybe talk about that a little bit? Thank you.

Safra Catz: Sure. Tariffs have no impact really at all to play in this. What it does allow our customers to do is do what I do when I announce on day a year on day 11. Is to be much more really much better run and have a better idea of where their business is and how it’s doing and to do more and spend a lot less. What you’re seeing now, and it hasn’t been obvious in the numbers, because, as you know, we have our strategic SaaS products, and we break that down for you in the release to some extent. Those are going gangbusters. And we’ve had other things in the numbers that have made you not be able to really see. We have some non-strategic products. And in addition, we’ve also had an advertising business, which we are now lapping.

I stopped even mentioning it because you know, what’s the difference? A few hundred million. But the reality is what you’re starting to see is our strategic SaaS product, as they roll out in our customer sites and as they ramp up, they’re very, very popular. They’re obviously compelling because only if you’re in the cloud can you use the AI capabilities. See, many customers are still on on-premise ERP products. Those can’t really use the advanced Agentyx and AI capabilities. So if you wanna use that, and many do, for automation and to do more spend less, you’ve gotta move to Fusion or NetSuite. And those are just very, very compelling. And it’s just now starting to show. Through the noise.

Lawrence Ellison: I would add one thing, which is companies don’t really enjoy buying applications from five different vendors and then making all of those applications work together. So some companies, not all, but some companies are saying, Oracle, you build these integrated suites of application and they’re all AI agent-based applications. So they’re modern applications, they’re modern cloud applications. But all of your applications are engineered to work with one another. So our ERP and EPM, supply chain manufacturing, human resources, customer engagement, all those apps are designed as a single suite of application to run an enterprise or government agency. And all those pieces then work together. So there’s no cost of integrating those applications.

So we’re seeing a lot of companies buying basically saying, I’m gonna go all Oracle. I’m gonna buy the complete Oracle suite for ERP, EPM, chain manufacturing. But a lot of people don’t have manufacturing. Supply chain human resources and customer engagement. They’re picking us. If they pick our back office applications, they’ll sometimes pick our front office applications over Salesforce. As a result of that. And our customer engagement applications are getting better and better. We continue to invest in those. And, you know, our intent is to give some of our biggest customers a one-stop shop where they can buy the entire suite to run their enterprise from us. And that gets rid of a lot of headaches. Everything is in the same database. Everything comes with the same AI data platform with it.

All the analytics are there. Everything is there. You don’t have to do the system integration. You don’t have to buy a bunch of pieces and make them work together. That has been our strategy for some time, and that’s all coming together. As a bunch of companies are not successfully navigating this difficult, admittedly difficult transition from on-premise to the cloud. There have been a lot of companies that have not done it very well, and they’re casualties, and we’re picking up a lot of their users. So the application business is very, very promising. And then I add, you know, Oracle Health and Oracle Banking, Oracle Hospitality, those the different industries on top of that. There’s no other apps company that is trying to build such a broad-based integrated suite of AI cloud application.

Raimo Lenschow: Makes sense. Thank you.

Operator: Next question, please.

Operator: Your final question comes from Brad Zelnick with Deutsche Bank. Your line is open.

Brad Zelnick: Great. Thank you very much, and congrats. Safra, Larry, the things you’ve been telling us would happen, are clearly happening. And it’s amazing. As we go forward, Larry, Oracle has always had the advantage of being the only vendor with enterprise-grade technology from apps all the way down to infrastructure, and since the Sunday is optimized even down to the silicon, why does the full stack nature of what you do remain important as we enter this new era of computing?

Lawrence Ellison: Well, such an interesting question because I think to some degree, people thought our biggest weakness is that we were just spread too thin. We’re trying to do infrastructure I mean, database initially. Infrastructure and then applications on top of that infrastructure. But you know, what made our database so good? I can argue there you know, we made some good technology decisions? But the other thing that made our database so good is we had we developed apps on top of our own database. In the same company, you have people using the database to develop applications. And the people and the people who are developing that database. And if the applications found features missing from the database, they found capabilities they wish were in the database.

That would make their applications better more reliable, more secure, we gain those insights by building those applications. Building applications allowed us to understand how to build database better. Building great databases made it much easier to build the cloud. There are a lot of databases that run the cloud. You know? You become a there’s a database of our users. All of our resources are in databases. So the autonomous database the Oracle Autonomous Database is one of the reasons our cloud you know, at some point, we’re gonna rechristen our cloud from gen two cloud to the autonomous cloud. You know, right now, that would be too aggressive. We’re not fully autonomous, but we’re getting there. And because we were able to use a lot of our existing database technologies specifically the autonomous database technology, to make our cloud more scalable, more reliable.

And by the way, when you eliminate human labor, when you have an autonomous database, you eliminate human labor, you save money, but you also eliminate human error and human mischief. So it makes your cloud much more secure. One of the reasons our cloud is more secure, one of the reasons our cloud is faster, is because we have an autonomous database that runs it. So having all of these levels of technology allows us to solve a technical problem at the right layer of the technology. Should we solve the problem in the network fabric? Should we solve the problem with our cloud controller? Something we have with other people that we’ve embedded different hardware to run the run the cloud. We added we have different hardware architecture. To make it more secure and more reliable.

So we’ve done innovation in the network. We’ve done innovation in our host computing. We have a non-stop Linux operating system that we build, the autonomous database that manages all the data in the cloud and so on. Being able to solve problems at different layers of the technology. Understanding the different layers of the technology. Allows us to build an integrated solution that is faster, cheaper, more reliable than what our competitors can do.

Brad Zelnick: Awesome. Thank you.

Ken Bond: Thank you, Larry. And Scott and Brad. A telephonic replay of this conference call will be available for twenty-four hours on our Investor Relations website. Thank you for joining us today. With that, I’ll turn the call back to Sarah for closing.

Operator: Thank you. This concludes today’s conference. Thank you for joining. You may now disconnect.