Oracle CEO Safra Catz very optimistic in Q4 2021: 10 examples


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While always intensely prepared and utterly unfazed during Oracle’s earnings calls, CEO Safra Catz was far more optimistic than I can ever remember when Oracle’s fourth quarter call on June 15.

Calling the fourth quarter ‘fantastic’ and ‘incredible’ and reflecting a ‘global phenomenon, Catz also quietly noted at the end of the call that this was his first full year as a lonely CEO of the company and as head of the global Oracle field organization.

On my weekly Top 10 cloud wars rankings, Oracle is # 6, and on my Top 10 industry cloud rankings, Oracle is # 3.

With its flagship products all generating hypergrowth revenue (Fusion ERP 46%, OCI cloud infrastructure 103% and Autonomous Database 56%), Catz and Oracle President Larry Ellison had good reason to be optimistic. . In such cases, it was always Ellison who slashed the competition and described Oracle’s market position as rather grander than the numbers indicate. And that has always been the intense Catz who, without ever contradicting Ellison in any way, would quietly but firmly bring the situation to life while projecting unwavering confidence and optimism.

But what we saw earlier this week from Catz was something quite different: an expression of almost limitless optimism in the performance and potential of the business, and a stable but optimistic articulation of a ready business. to take off that fourth quarter foundation.

Here’s what I mean, in Catz’s own words when calling the results.

1. A quarter of an eruption across the world. “We had a fantastic quarter, with sales almost $ 200 million above my expectations. The fourth quarter is truly the story of every product, every region and every metric exceeding expectations. “

2. The big dog gets bigger and faster. “Our back-office cloud applications (ERP and HCM) revenues are not only higher than our closest competitor, but they are also growing more than twice as fast. “

3. The growth rate will increase in 2022. “I see total revenue for FY2022 growing faster than FY21, with constant currency revenue growth somewhere in the middle of the numbers. “

4. Double CapEx to meet demand. “Given our growing confidence in revenue growth and our unique and differentiated position in the market, we will be reinvesting in the business at a higher rate in order to be able to further accelerate revenue…. We believe that the time has come to increase our investments to gain market share. As such, we plan to roughly double our cloud investment spending in FY2022 to almost $ 4 billion. We are confident that the increased return from the cloud business more than justifies this increased investment and that our margins will increase over time. “

5. More and more referenced customers. “It was an incredible Q4, and Q1 looks huge. Reservations are on the rise, and there is just a lot of success. We have so many clients that have been brought online that we have referrals from some of the biggest companies in the world to very small to medium sized companies. Almost any prospect can find many businesses like this that are already having incredible success.

6. Ride the digital wave. “Frankly, the pandemic has taught many of our prospects and customers that there is a real need to move quickly these days. I think people thought going fast was risky. I think they really saw that they needed to move to much more modern, flexible digital businesses and that we are definitely the right destination for them ”for cloud ERP and HCM cloud.

7. Safety and performance. “With what’s going on these days, you really have to be in a cloud that’s fundamentally obsessed with security while giving you amazing performance at a lower cost. Once clients try us out, what happens is one workload comes in, then another, and that is usually followed by many more. So let’s just say we have a lot of momentum.

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8. New revenue models mask early-stage growth. “You have to understand that when we sell equipment on a regular basis, we recognize all of that revenue once all that equipment is delivered. But when we installed [email protected], Exadata [email protected], or Dedicated Region, we do not recognize these revenues in advance.

“And so you don’t even see that all of this is happening right now in our income statement, and yet we keep growing… Usually when we sell [email protected] compared to just selling the hardware it can, over time, generate 3-5 times more revenue for us. But at the same time, the customer ends up spending less globally over this period because we manage their entire domain. We update their databases etc depending on the services they use, and they have the advantage of always having capacity, always having the most up-to-date system and the most secure which is corrected and fully managed by us. So although they ultimately give us a lot more money over time – 3 times to 5 times as much – in fact, they end up spending a lot less on maintaining their wealth.

9. Powerful performance in all regions. Noting that “For me this was my first full year with the pitch so I really applaud the team for doing a spectacular job around the world,” said Catz, “I have a very strong management team. refreshed and new and really successful in Europe, and they shoot pretty much every cylinder. He’s extremely wide… with incredible strength around the world. Latin America: doing phenomenal. Japan: doing phenomenal. And of course led by North America. It’s been an amazing year. It’s been a phenomenal quarter. But truly an amazing year, and on a global basis. I’m more than satisfied, I’m delighted by the results of the team.

10. A great RPO means the future looks very bright. It’s important to note that while some of the top 10 Cloud Wars only have cloud revenue in their RPO (remaining performance obligation), Oracle also includes on-premise commitments. So while Oracle announced an overall RPO growth of 8%, the cloud RPO, which the company does not publish, would be much, much higher.

“The RPO was driven by really strong bookings which were really huge. Obviously they don’t show up in the income statement right away, but they – you know, the future is so bright. And you may have heard me, I was alluding to it in my comments. And one of the reasons we’re so comfortable looking at our investment is because we really want to make sure that we have the capacity to take the huge amount of bookings that are pouring in… But there is just a huge backlog for us of customers who are going to live and start consuming, and we’re very optimistic.

Bonus # 11 from Larry Ellison. Catz and Ellison worked together for 22 years at the helm of the company, and Ellison was keen to recognize Catz’s contributions and performances during his first full year as CEO: “Thank you, Safra, and a great job. . Your team achieved a spectacular Q4.

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