Oracle Corp (ORCL, Financial) recently held its first-quarter fiscal year 2024 earnings conference call, revealing a strong performance with a focus on cloud growth. The company's total revenue for the quarter was at the midpoint of guidance, and earnings per share were $0.02 above the high end of guidance. The cloud growth was reported at 29%, with total cloud revenue, apps, and IaaS, excluding Cerner, at 4 billion, up 29%. The company also highlighted its forward-looking statements, predicting continued growth and success.
Key Highlights from the Earnings Call
Oracle's CEO, Safra Catz, highlighted several key points during the call. The company's remaining performance obligations (RPO) climbed to nearly 65 billion, with the portion excluding Cerner up 11%. The company has signed several deals for OCI greater than a billion in total value. In the first week of Q2, Oracle booked an additional 1.5 billion in business, which isn't even included in the Q1 numbers. Approximately 49% of total RPO is expected to be recognized as revenue over the next 12 months.
Oracle's total cloud services and license support revenue for the quarter was 9.5 billion, up 12% driven by strategic cloud applications, Autonomous Database, and Gen 2 OCI. Application subscription revenues, which include product support, were 4.5 billion, up 11%. Infrastructure subscription revenues, which include license support, were 5.1 billion, up 14%. Infrastructure Cloud Services revenue was up 64%.
Financial Performance and Future Outlook
Oracle's non-GAAP operating income was 5.1 billion, up 12% from last year. The operating margin was 41%, up from 39% last year. The non-GAAP tax rate for the quarter was 18.8%, and non-GAAP EPS was $1.19 in U.S. dollars, up 16% in USD, up 14% in constant currency. The GAAP EPS was $0.86 in USD. At quarter end, Oracle had nearly $12.1 billion in cash and marketable securities.
Looking ahead, Oracle expects its total revenues, including Cerner, to grow from 3% to 5% in constant currency and are expected to grow 5% to 7% in USD at today's rates. Total revenue, excluding Cerner, is expected to grow from 6% to 8% in constant currency and expected to grow 8% to 10% in USD. Total cloud revenue, excluding Cerner, is expected to grow from 27% to 29% in constant currency and is expected to grow 29% to 31% in USD.
Oracle's Strategic Partnerships and Innovations
Oracle's Chairman and Chief Technology Officer, Larry Ellison, highlighted the company's strategic partnerships and innovations. Oracle is expanding its existing multi-cloud partnership with Microsoft, making it easier for Microsoft Azure customers to buy and use the latest Oracle Cloud database technology in conjunction with Microsoft Azure Cloud Services. Oracle is also set to announce that all nine utility companies owned by Berkshire Hathaway are in the process of replacing all their existing ERP systems and standardizing on Oracle's Fusion Cloud Applications.
Overall, Oracle's Q1 2024 earnings call painted a picture of a company that is experiencing strong growth, particularly in the cloud sector, and is poised for continued success in the future.
