ORACLE CORP Q3 FY2025 earnings call

• Strongest booking quarter ever with $48 billion added to backlog; RPO balance at $130 billion, up 63% year-over-year. - Crossed 101st cloud region; power capacity growth expected to double this calendar year and triple by end of next fiscal year. - Q3 financials: total cloud revenue up 25% to $6.2 billion, SaaS up 10% to $3.6 billion, IaaS up 51% to $2.7 billion; total cloud services and license support up 12% to $11 billion; infrastructure subscription up 18% to $6.2 billion. - Gross profit of cloud services and license support grew 10% in Q3; operating income up 9% with operating margin 44%; non-GAAP EPS $1.47, up 4% in USD, 7% in constant currency. - Committed to returning value to shareholders via repurchases, dividends; repurchased nearly 1 million shares for $150 million in the quarter. - Larry Ellison discussed AI data platform enabling database customers to use AI models, multi-cloud database growth, and agents in applications.

Total cloud revenue at SaaS and IaaS was up 25% at $6.2 billion, with SaaS revenue at $3.6 billion up 10% and IaaS revenue at $2.7 billion up 51%. Total cloud services and license support revenue for the quarter was $11 billion, up 12%. Infrastructure subscription revenues, including license support, were $6.2 billion, up 18%. OCI revenue was up 51% in Q3, 54% excluding legacy hosting. Instructure cloud services have an annualized revenue of $10.6 billion. OCI consumption revenue was up 57%. Cloud database services were up 28% with annualized revenue of $2.3 billion, and Autonomous Database consumption revenue was up 42%. Database subscription revenues were up 6%, application subscription revenues were $4.8 billion up 6%, strategic back-office SaaS applications had annualized revenue of $8.6 billion up 8%, and software license revenues were down 8% to $1.1 billion. Total revenues for the quarter were $14.1 billion, up 8% from last year.

• Fiscal year 2025 total cloud infrastructure revenue expected to grow faster than 50%, FY '26 around 15%, FY '27 around 20%. - Q4 guidance: total revenues expected to grow 9-11% in constant currency, 8-10% in USD; total cloud revenue expected to grow 24-28% in constant currency, 25-27% in USD; non-GAAP EPS expected to grow 0-2% in constant currency, $1.61-1.65 in USD, impacted by $0.03 loss from investment.

• Forward-looking statements subject to risks and uncertainties. - Component delays affecting cloud capacity expansion expected to ease in Q1 FY '26. - Currency impact on EPS and revenue.

Q: Brad Zelnick asks about Oracle's unique value add in Stargate.

A: Larry Ellison states Oracle has a technology advantage with faster and more economical AI clusters.

Q: Derrick Wood inquires about demand across multi-cloud, OCI, and database environments.

A: Safra Catz and Larry Ellison mention multi-cloud growing over 10 times YOY, OCI and database migration going well.

Q: Alex Zukin asks about AI training vs inferencing.

A: Larry Ellison says inferencing is a bigger opportunity with millions of Oracle databases for training and inferencing.

Q: John DiFucci asks about deployment of 40 planned cloud regions.

A: Safra Catz and Larry Ellison state deployment is moving quickly with motivation from partners.

Q: Kirk Materne asks about demand for agents in strategic SaaS.

A: Larry Ellison and Safra Catz discuss agents in health care and applications driving sales.

Q: Mark Moerdler asks about CapEx lower than peers.

A: Larry Ellison explains lower CapEx due to starting smaller and growing with demand, higher utilization and automation.