Oracle (ORCL) 9 Dec 242025 Q2 Earnings call transcript

Thank you for standing by, and welcome to the Oracle Corporation Second Quarter Fiscal Year 2025 Earnings Conference Call. [Operator Instructions] I'd now like to turn the call over to Ken Bond, Head of Investor Relations.

You may begin.

Thank you, Rob, and good afternoon, everyone, and welcome to Oracle's Second Quarter 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.

as many on purchased be Oracle our Relations of or Cloud available list Investor live went Cloud website a customers Oracle who Services from Additionally, well. recently will

Chairman On the and Executive Safra Officer, Chief Officer, Larry Chief and Catz. call Ellison; Technology are today

a discussion important discussion, today's forward-looking we these present some differ will As forward-looking relating may statements, risks today. potentially estimates, affect statements to expectations, Throughout statements. And predictions, reminder, subject considered information other may forward-looking. today's these factors our being are or that business, to statements include forward-looking including and cause which might be also actual materially made that uncertainties results to will from

forward-looking that recent we stock. And our for statements, to and review are may of result, our applicable including in new of and affect risks of reports, you results light these ourselves information and placing market these a price future As caution our to forward-looking results revise these you encourage most finally, future statements we factors XX-K complete or discussion other amendments our from any and events. or we or obligating not our a XX-Q on undue reliance the

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

also driving growth. the the of line above which end the my revenue $X.XX and constant and XX% cloud of total license Thanks, fastest-growing Ken, and driven end. and services that total support was item, good revenue is represents afternoon, are everyone. being actually largest is of QX overall high with revenue currency was the component, turn, by another These now excellent at quarter EPS revenue results guidance, in high acceleration fact our our

billion year. We this expect is several for revenue reach This reasons. happening fiscal $XX to cloud

infrastructure is preferred as services. cloud as for than We for less cloud our faster other non-GPU well First, expensive clouds. workloads AI is and cloud remain the

SaaS Microsoft, AWS our In which their addition, they customers in customers the And and Google, of more applications Oracle and many our databases deploy continue migrate can agreements choice how our come industry-based gives our cloud more we our sizes provide ability to to our contribute with flexibility, multi-cloud rapidly. cloud also are applications to revenue seeing online, cloud. And grow immediately growth. to strategic in

growth RPO in momentum You our you acceleration the And cloud telling all the growth this further and performance we're revenue obligation. XX% in in quarters. the billion accelerate can of coming see number, of today, growth will of our the remaining that again $XX

to announcing a Turning and our results, to use want here Oracle QX, I quarter ended our remind we and ago, only possible are because Saturday we that's you Fusion. and that week on

Now internal as segments we exceeding our saw for forecast. all numbers, the

the revenue the were total my present strengthened with currency dollar by QX the benefit the movement. unaffected and for EPS to $X.XX benefit for and quarter, in revenue in in August retreated, essentially total as Now $X.XX currency X% EPS that guidance

how we over currency discussing is the rate today, manage financials our go be I using as as constant usual, As business. growth things this I'll

top it cloud revenue IaaS $X.X XX%, up $X.X and that's here with year. up So billion of last was SaaS billion, revenue up and $X.X goes. growth revenue, XX%, IaaS, Total billion, the of XX% SaaS on XX% reported at of

of again for excluding revenue drove effect XX%. was up infrastructure, XX%. this up Oracle support license and business by Cloud up cloud application Infrastructure cloud revenue subscription AI But strategic legacy services by revenue advertising XX%, support, the exited we quarter. Total reminder, license last includes revenues, quarter lowering our was up autonomous XX%. Record-level database. which were cloud billion, Infrastructure hosting growth OCI, $X which cloud services the a demand X% total driven quarter, $XX.X As had the the billion, and

segment cloud delivered services demand Growth revenue infrastructure continues was up have the annualized now outstrip GPU to scaling GPUs. world's Cloud the up now XX% AI consumption was up largest billion. fastest And in revenue our supply. NVIDIA XXX% infrastructure XX% in as which $X.X HXXX supercomputer, have billion. OCI annualized consumption Our of XX,XXX AI revenue and to quarter. database of up was were business an of an the $X.X extraordinary. we and services,

expect revenues to regions cloud currently cloud leg of the planned will migrate XX OCI, on be and X%. another Google, collectively alongside and services, up services our strategic the billion we AWS, growth services up in license at were which Application the support, support, subscription subscription cloud SaaS. We Database have databases cloud includes through cloud revenue database -- on-premise and Google, with which or database either Azure, live database directly third As and currently we $X.X with and were AWS. database XX product revenue, at X%. are Azure, with OCI includes

billion Our annualized have up and strategic were back-office XX%. applications $X.X SaaS revenue of now

billion, X% $X.X excellent Java, revenues including were license to growth. saw Software up which

in, X% total for quarter the year. were all $XX.X up So last billion, revenues from

profit income. services Now and The shifting profit gross and dollars in license cloud to QX. support of gross operating grew X%

to cloud both gross been margins of continue our each have scale, cloud higher. trending cloud infrastructure the As applications businesses and

G&A QX we're trend and XX We grew than revenue, and grow to sales is which, was my with which year. which for, to expense marketing, a continue. The XX% continue quarter tax operating for continue especially expect known to course, I XX.X%, rate guidance. margin display expenses, basis discipline, non-GAAP up XX% the The XX%, points than collectively operating that higher slower actually the of last income R&D, and from was

Even hit currency. up constant in EPS $X.XX, for balance in $X.XX in cash free in negative up $X.X XX% flow was quarter revenue billion CapEx securities. flow guidance. in currency. At and that's deferred USD, [indiscernible] USD my lowered the operating cash X%. marketable up constant was the we currency billion, by $X.X XX% U.S. XX% was as The quarter, $X.X $XX.X of short-term was and we $X.XX rate positive still and USD was EPS billion dollars, With end non-GAAP billion. The end, and and XX% EPS billion GAAP in had high at in higher tax constant $X cash The

the CapEx in year demand and 'XX. fiscal Given RPO be that was pipeline, our will XXXX additional our I year the see expect numbers we double FY demand you see fiscal in what in it

we remain XX-month at free up always, $X.X billion our As investments cash was and align CapEx trailing $XX.X trends. On flow a was line pace with operating XX% and careful to booking cash and flow in basis, billion. appropriately

wanting contracts firsthand XX% as over trend up at their represent grew XX continue nearly and Our nearly of Further, businesses. Approximately Cloud how total as the remaining Services RPO, the they and the and billion, RPO $XX.X XX% near months, -- cloud are our reflects recognized our XX% X/X of total currency we constant larger RPO Oracle performance to is longer next see RPO. customers obligation, current be now RPO revenue and is in RPO now of the or benefiting cloud of growth expected grew see to accelerate. growing

regions We and of advantage with hyperscaler regions region more have cloud We have more of scale cloud cloud racks other the can any and That handful a follow. our customer X to now demand. strategic about the XX architecture. many, Gen of many a then we than start up reflects new live with

flexibility varying continue in only automated advantage deployment features and our are scale. centers and optionality data function, identical cloud a be for our in and and size significant highly us. to This Additionally, of regions

a said and repurchases, before, our dividend. As prudent debt, shareholders value returning we've acquisitions, innovation, we're use to of stock committed to through technical

we quarter, shares This a repurchased $XXX X of nearly total million for million.

billion $X.X Directors the out In last again a of of Board addition, per we And $X.XX paid the XX share. quarterly months. over dividends dividend declared of

demand the thoughts the will specific share see quarters financial benefits which some while you pipeline and fiscal XXXX, begun we the see QX our expect actually start, again like will higher our we being of this Meta for deals services, win rates balance revenue. in that we RPO some in cloud signed the and overarching are continue Before years. dive QX. In is over about growth. a growth faster, stellar, quarter, is we RPO example I and to why I'd in generate I have growing big win in booked at not our see even only prime Meta our was into growing many to year And with To coming QX QX. our to guidance, expect recent excellent climb

next. ramp contributor this We a in expect that the year growth will acceleration higher second continue those be to and to and half revenue key

and year For year last full very growing XX% reported remain year the revenue than growing total total XXXX, Cloud confident year. committed to Infrastructure faster double fiscal and digit we full

Okay.

basis. I'll Let me review now non-GAAP to on turn which guidance, a

dollar. To we to this $X.XX on we've currency, due dramatic positive to strengthening perspective, significant of U.S. a of in terms expected shift seen In the EPS. in a currency have effect QX, put

For they QX, now, have and on negative remain currency effect a $X.XX revenue. assuming X% EPS exchange negative effect are a on as same rates the should

$X.XX X% in expected to X% XX% be dollar is to the currency. in Non-GAAP constant to Total expected to strengthened, expected in from grow XX% EPS quarter at between not grow and and XX% are be loss to to is XX% expected USD. between cloud different. All Non-GAAP USD. I owner my $X.XX QX is to X% grow USD constant out XX% is by $X.XX to the between X% constant and grow hold from from may of. EPS investment rate. revenue an in revenue total is X% and it and that to a are negatively in to X% to mention due expected are and between partial may $X.XX expected right, from currency in today's we in to another company $X.XX exchange X% and as impacted whole be that to However, guidance grow should EPS currency grow

for base Lastly, QX assumes rate XX%. my a EPS of tax guidance

turn in over rates other tax can And for Larry comments. like that, things to actual cause onetime vary. with and I'll to events However, his it QX, tax

Infrastructure Cloud important Oracle Safra. AI the generative of trains you, Thank world's models. several most

agents laundering Oracle Oracle Cohere, image database, and AI large the easy cloud include the XXai and embeds our of dozens economic continues easily log-ins, and in our is the reap real-time models own training agents models health predict augment faster their and to and performance AI development AI and data of for it ChatGPT, other updates care, corporate scaling capabilities and their NVIDIA of satellite detection, the video electronic Our Llama the HXXX growth models. databases of in we're up output, build automate for customers benefits design, of of AI AI developing GPUs. trains throughout The biometric weapons XX,XXX training and computer industry-standard revolution. Oracle makes customers The their use extended detection new by to large-scale infrastructure supercomputer enables will data just schools. Furthermore, world. and OpenAI, and clouds. And we the and rate to cancer and our Oracle's Cloud is AI existing opportunity dual-factor this world, agricultural workloads money patient generative Cloud win AI drug diagnostics, existing of AI applications. Llama. for training own their fraud to XXai vector improve genomic in and the analysis version The agents models AI our vector records unimaginable. discovery Oracle to Oracle that Meta analysis scale and agents fastest AI the audio expensive their NVIDIA, AI hundreds image scientific Oracle improve customers Grok database major AI the AI specialize and the because use recently, to like and the with than of most largest less xAI, delivering to to advantage

fiscal said, beginning year, is and this should $XX the of total the Back cloud top to Safra As just billion, beginning. Oracle revenue this you.

for Rob, you questions? poll Larry. please if you, could audience the Thank

comes from Bernstein. Mark [Operator the from Moerdler today of Instructions] Your line first question

how servers. and peers? your data will And CapEx you Congratulations on and impacts its compared gain differently how to racks impact growth to the the I'd center into over [ this explain affect designed ] the how your racks OCI shortly better OCI. many years? and architectural how could you Can difference have larger just it might quarter. build from and through you deliver then next XX like how OCI peers, regions X is insight in deliverable

centers are all racks, modular. it you the of as completely Well, same data the Okay. think so

we We can to build takes racks, and region, region the it a have rack a smallest basic X build.

gigawatts. So currently data center and data data our our X.X XX we're is so kilowatts. excuse me, so kilowatts data largest centers, started under now building -- centers, basic centers, racks the biggest our And XX small our

range, the a the them are quite XX pretty when that's build same. we and them megawatts racks to inventory, So put much X.X And gigawatts. in we

cost these. us the The services. it's every services. because to same. these. have has same easy less inventory to lower manufacture Furthermore, It's of of is our all So all region very the all for kind They they're manufacture cloud

like So it's have to easy our don't for competitors do. provision customers. We

Our some of in competitors in other regions services have some and of their their some services regions.

all of smallest competitors. even in They're our though both of our easy to easier they identical. the our say, regions, services are same, services racks are the and all region, -- of all the When have should smaller than of our and become in We of our terms largest larger terms are our of or, region our automate. very all same all in small we I

current it that automation all degree of own automation of regions Individual are it their works of even and installing to makes XXX theoretically, buying run high our regions. And but or, the of individual of of suite thousands regions X not them. regions complete customers as have region. We hundreds dedicating Oracle dozens are in because possible tools customers

If it a though region, on-premise, is that -- what data dedicated be center would just in a to like Cloud to Oracle happens customer. be you it seems full

a selling lot as We are of well. those

it to allows that a our competitors address can't So market reach. us

to and centers largest the the standardization, smallest advantage a in So in this give from competing us automation, huge marketplace. data

to with they our footprints, side, have CapEx this have with need allows cloud even a we up and because with to started, this and consuming. our have of with smaller is that. it think only and our expressed can And the are them customers the extremely as footprints large competitors that can get match land expenditure profitability we customers literally us up expand in fill can something start keeps before On consumption empty because don't as always centers time land I since showing we is do our spend just long And really to -- it. what also really ultimately can our small capital revenue we of because

it. helpful. appreciate I extremely It's do really

comes Mizuho. Your of the Panigrahi next line question Siti from from

It's see OCI growth database-as-a-service XX% XX%. up even to and impressive

provide to how And execute think customers to going some cloud you multi-cloud traction? as So on contribution on-prem migration your what forward? hearing database the from on the as you to they revenue strategy, you color even or database-as-a-service database about prepare migrate And we can to cloud? are should

go then You Larry ahead, finish. I'll and

go You ahead.

No, no.

All right, let me start.

and it's of already and mentioned that imagine X without I even services annualized database the also, OCI past will $XXX at from entirely caught billion. you And -- $X.X million has As mostly as AWS nearly $XXX in an my the database as revenue, Azure most probably rate, to hundreds Google. be grown of XX%, -- That though, now talking, cloud just million-plus millions run and and exit. is

regions these opening. So cloud only have started

many opening. and now As twice as though, open have do mentioned, XX we I

think the at beginning. is as So moves the is it cloud, what really I see only database, you're to the going to

reasons, sovereignty but to In partners reasons for own are an of remind Customers databases to addition but to contributing have. and are of of that own them pipeline none customers that Alloy only either at to regulatory of it one dedicated cloud, that that we want offering competitors their though, Cloud again this. bring or do -- the you want to regions have, want just enormous who we their I a have also in our number their And our an

the is -- than year the Microsoft a where partner where more we old. Again, only is Yes. contract

and much more AWS than is even recent more Google. recent Google So

it's as first million the said, Safra beginning well $XXX exit its to going in over So multi-cloud. of And year. very at we're

data year sometimes The large when be a their regions. Customer. combination those of of is will Google half The a so companies, plus telecommunication at and building Cloud we Azure, Customer, for individual business. centers. or want inside hundreds from a data We're region, we a Cloud when They more build AWS first all have dozen at It us dozen multibillion-dollar dedicated all got starting AWS facilities. -- had to X. these centers, own going of dedicated be half a It banks, to will demand and customers,

run to up we'll they'll those, again, So Oracle going multibillion-dollar And hundreds us. dedicated -- clearly be for business regions. a and very end in a of Cloud the is with it multi growing rapidly large,

That's great color.

was guidance? Ken, supposed I to think that actually I I correctly about you misspoke. say the line say Could

to expected Non-GAAP X% between X% dollar. in $X.XX to you. Thank EPS and absolutely. $X.XX is Sure, be grow U.S. between and

Thanks. I what know exactly, correct. but that said don't I Sorry, is

Brad comes Zelnick question line Deutsche Your from of from next the Bank.

your acceleration the scaling to curious training laws larger I'm with diminishing GPU and leadership and leads as there's returns industry Musk Elon as on hear debate AI the Oracle Larry, compute there's on healthy larger continued possible. Congrats to and the thrown perspective of whether GPU allegedly envelope model at in what's clusters, of amount with superclusters. scale. pushing infrastructure Oracle's ongoing around at

training. speeding and Well, up elements and there's faster GPUs. of X up larger to made clusters is GPU building faster One larger

So it's cluster a GPU itself.

The of GPU building move has very, element, is into focused networks second rapidly something clusters. on Oracle large very those volumes data been that

As data more and the larger to demands on be into it's move able amounts these to clusters those faster, you and clusters. make of more GPU network putting GPU huge

sitting So for the waiting the for data. data, inefficient. aren't becomes there the GPU it waiting If clusters sitting they're very there

time, -- that's bottleneck. obviously, have you and scaling problem seconds, the minute itself that's performance half And by sorts a think is networks speeding one available, to the data GPU don't to make the data bigger and a heavily as we're in -- networking. move by our maintain no then think trying more a problem. faster. data problem. Oracle there. And and the for paying able get and able And -- -- training And be clusters will to that our advantage demand networks. economic thing bottleneck faster, faster, if don't XX is we quickly. faster. you're that network the faster, that really software critical in hardware I the the an are the we're we'll that's you the networking way, of If by going and building in get and software, potential its data heavily move as our makes differentiates there's we network We the investing all AI up by If to be investing centers -- to us switch avoid will we we think But

next comes the from Raimo Barclays. question Your line Lenschow of from

Can putting little bit there, I of up the go like office or solid don't you the But look -- look I a if of to to shift a kind mean, at stage late we're go your point cycle business? people part at really numbers rates, the growth there. guys SaaS you the growth where and you gear of back back If at usually look systems.

you outgrowing a what's of on little going your peers. Can bit talk You're there?

that office back agree their systems. don't with I folks Actually, at aren't looking you

really of enormous they efficient for to fact, in industries be amount it's our And -- up those say, AI really differentiate companies pressure there's they them. But doing your quarter to things X is a all when in interest and weekends, serving who their to dozens in and agents always know, their at their less many come me day I using that how enormous AI businesses And almost can automate And we to that they I In weekend can executives company spend in actually enormous that shows since you of dozens look do X, there's help need fierce competition X at why in also less as need just have, more running think of what that's that companies, in and closed. That can simplify job own using we it." days first We data lot really us, lot enormous efficient do point that. "We can a see and so understand a for and includes companies. spend don't and and right I operations. lot to out a do that pipeline customers now. is less invest -- better systems The example, be customers. spend more for the basically

in that the can capability So and interest we AI data area. one a enormous capability and the find customer. this bring no the to And Oracle has

too. it's and think been I exciting times back in office in the one actually, office, So of most front

-- even for office so have of systems also advantage We front many capabilities our our of customers. our taking

trends, going a trends been you revenues a quite because implemented, this year don't and see we last were fact, marked have great And accelerated So from booking those our in time. until just We which yet they're booking step-up. taken in significantly. has our wait today they've over

from Your line Kirk next ISI. from Materne question Evercore comes the of

some Congrats end sight all a the about prepared that on around comments. that's recognize seeing that results. online bit with you specifically Safra, on the pipeline your side? of capacity of you talk line in about revenue terms so you're the demand strength OCI talked your of the can little associated at the the just you of Can coming

Yes.

we've is, second come been that So capacity that the half this a half, waiting of lot online well, we've -- it, the to on. and been and for going is in second we're especially of see year working

to for that year. everything RPO which also itself, going is up though, it So moving the base the number, revenues. we year-over-year. expect accelerating of up is course, in you're start this that we our expect This into and the in quarter see the actual we end -- is, But even more. And to of addition, expect turning to XX% spike RPO number

it which So is. capacity come for our online we both expect customers, to

down we go make simultaneously burn expect but large of number number a will our to RPO -- that our too. some very of up, also it to will sign RPO, so And contracts

DiFucci question from final your from Securities. the of And John line comes Guggenheim

here little go a line. Safra, bottom you've switch going versus line and shown to us -- bit the top gears to the down I'm

call to that don't for you a that gross consistently. on. going business improved have It's Oracle margins OCI you've what been while I'll is years profit make us good said not do but previously empty that You've shown

the You you low your remarks. And quarters you're just for Can OCI. XXs was it last us an ago. the out prepared ago you threw margins of was seeing? growth think give for actually gross that, update time mentioned especially the was awhile it in a the I again on And several number massive progress that in but given

really business GPU from margin It's because just mentioned. as but that of so improve in number And business our percentage we our of And or base benefit that number profitable. in to amazing, to are continuing that of OCI, a to improve. not OCI, continues the gross is many infrastructure you yet things margins think I continue know business things of that Larry

For leverage. way our cloud, we run. enormous company software Because to gives really we capabilities, automated, run example, set our the is cloud, we everything are everything way which the a we're up software always us our the is optimizing core,

fantastic. it's OCI Our going And in operating been improved. really again to margins just it's --

OCI, they So for improved, in us SaaS margins improved scale even investing. improving -- as in with our we're even everything is

we it So just continues to improve. -- just

watch and hear to great That's continue we to closely.

A I'll call available Investor Relations us our for of XX conference you, call joining Rob John. be will With the Thank turn Thank hours this on that, on call closing. you replay for back today. to for the website. telephonic

conference for you call. Thank today's your concludes This participation.

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