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Oracle Corporation


Wall street consensus:


​Recent Conference Call

### Oracle Corporation NYSE:ORCL FQ3 2024 Earnings Call Summary

#### Insightful Quote:
"There’s an increasing demand for our cloud services, and as our supply constraints ease, revenue growth rates will accelerate higher as our capacity expands." - Safra Ada Catz, CEO

#### Key Quarterly Business Trends:
1. **Rapid Growth of Infrastructure Cloud Business**: Oracle’s OCI (Oracle Cloud Infrastructure) emerged as a significant driver of revenue acceleration, outpacing cloud competitors. This trend signifies a strong market response to Oracle's pricing, performance, and comprehensive solutions tailored for enterprise-scale workloads and artificial intelligence applications.

2. **AI Capabilities and Application Modernization**: The innovations in AI and the integration across Oracle's Fusion and Autonomous Database showcases a move towards harnessing AI for enhancing customer operations and outcomes. This includes the development of new applications like the all-new ambulatory clinic system, highlighting Oracle’s commitment to reengineering solutions using generative AI for sectors like healthcare.

3. **Expanding Cloud Capacity and Investments**: Oracle’s strategic investments in building out cloud capacity, including significant CapEx planned for the coming fiscal year, reflect an aggressive approach to meeting the burgeoning demand for cloud services. The CapEx figures underscore Oracle’s commitment to expanding its cloud infrastructure to cater to large-scale OCI deals and partnerships like the one with NVIDIA.

#### Critical Sell-Side Analyst Questions:

**Question 1:** *Infrastructure as a Service Growth Sustainability*
Analyst: John DiFucci, Guggenheim Securities
**Concern:** Whether the 49% growth in Infrastructure as a Service reflects sustainable demand or pre-emptive allocations to large OCI deals.
**Response:** Safra Ada Catz confirmed that the growth reflects regular business operations, highlighting ongoing demand and awaiting larger OCI deals that have not yet come online, indicating a solid pipeline for future growth.

**Question 2:** *Cerner's Integration and Future Implications*
Analyst: Raimo Lenschow, Barclays
**Concern:** The acceleration and implications of moving Cerner onto Oracle's cloud infrastructure.
**Response:** Larry Ellison emphasized cost savings, security improvements, and rapid modernization capabilities for Cerner customers as key benefits of the integration, pointing towards transformation and growth in Oracle Health.

**Question 3 (Unique):** *CapEx and GPU Availability for AI Infrastructure*
Analyst: Ben Reitzes, Melius Research
**Concern:** The trajectory of CapEx needed for expanding cloud capacity and the availability of GPUs for AI endeavors.
**Response:** Safra Ada Catz projected approximately $10 billion in CapEx for fiscal year 2025, citing effective management and good GPU availability, dismissing concerns about hardware limitations in fulfilling AI infrastructure commitments.

#### Outlook and Guidance:
For Q4 2024, Oracle expects total revenue growth of 4% to 6% (including Cerner) and an EPS range of $1.62 to $1.66

Key Questions to follow

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