Safe Harbor Statement - Doug Kehring
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Safe Harbor Statement Statements in this presentation relating to Oracle’s future plans, expectations, beliefs, intentions and prospects are “forward-looking statements” and are subject to material risks and uncertainties. Many factors could affect our current expectations and our actual results, and could cause actual results to differ materially. A detailed discussion of these factors and other risks that affect our business is contained in our U.S. Securities and Exchange Commission (SEC) filings, including our most recent reports on Form 10-K and Form 10-Q, particularly under the heading “Risk Factors.” Copies of these filings are available online from the SEC or by contacting Oracle’s Investor Relations Department at (650) 506-4073 or by clicking on SEC Filings on Oracle’s Investor Relations website at https://www.oracle.com/investor. All information set forth in this presentation is current as of October 20, 2022. Oracle undertakes no duty to update any statement in light of new information or future events. Copyright © 2022, Oracle and/or its affiliates
Non-GAAP Financial Measures To supplement our financial results presented on a GAAP basis, we use non-GAAP measures, which exclude certain business combination accounting entries and expenses related to acquisitions and other significant expenses including stock-based compensation, that we believe are helpful in understanding our past financial performance and our future results. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Today’s discussion may include certain non-GAAP financial measures. Copyright © 2022, Oracle and/or its affiliates
This Fiscal Year’s Expected Milestone
$50 Billion
in total revenue*
Copyright © 2022, Oracle and/or its affiliates * Consensus estimate for the Oracle fiscal year ending May 31, 2023.ORACLE MISSION:
Deliver End-to-End Industry Automation to Solve the Most Complex
Business Challenges
Customer Focused One Hand to Shake Value Maximization
• Flexible models • Single source • Standardize on common
(public cloud, C@C, for enterprise technology platform
on-prem, hybrid) technology needs
• Modern, highly
• Help customers grow, • Sole accountability, secure, scalable
modernize, and drive full responsibility cloud capabilities
efficiencies
Copyright © 2022, Oracle and/or its affiliatesWhat Sets Oracle Apart?
We are the most complete enterprise technology vendor
Oracle Industry Applications
Communications Construction & Engineering Financial Services Food & Beverage Healthcare
Hospitality Health Sciences Retail State & Local Utilities
Oracle Fusion Applications 3rd Party Applications
Enterprise ISV
Enterprise Supply Chain Human Capital Advertising Fusion Analytics
Performance
Resource Planning Management Management & Customer Experience Warehouse
Management Custom
Oracle Cloud Infrastructure
Compute Networking Storage Database Security
Commercial and Government Public Cloud Regions Hybrid Cloud: Cloud@Customer, Dedicated Regions, Roving Edge
Copyright © 2022, Oracle and/or its affiliatesWhat Sets Oracle Apart?
We have the largest addressable enterprise software opportunity of close to $750 billion
Oracle Industry Applications
Communications Construction & Engineering Financial Services Food & Beverage Healthcare
Hospitality Health Sciences
Applications: Retail State & Local Utilities
$265B TAM
Oracle Fusion Applications 3rd Party Applications
Enterprise ISV
Enterprise Supply Chain Human Capital Advertising Fusion Analytics
Performance
Resource Planning Management Management & Customer Experience Warehouse
Management Custom
Oracle Cloud Infrastructure
Compute Networking Infrastructure: Storage Database Security
$480B TAM
Commercial and Government Public Cloud Regions Hybrid Cloud: Cloud@Customer, Dedicated Regions, Roving Edge
Source: IDC, Gartner, IHL, BCG, and Oracle internal analysis. Figures are rounded. “TAM” = Total Addressable Market.
Copyright © 2022, Oracle and/or its affiliatesWhat Sets Oracle Apart? We have a customer base of more than 430,000 customers Copyright © 2022, Oracle and/or its affiliates
How Does Oracle Leverage Our Unique Differentiation to Accelerate
Revenue and Profit Growth?
Cloud is driving Oracle’s revenue acceleration
• Cloud has grown from 20% of revenue in FY20 to 30%+ expected in FY23
• Cloud organic growth has accelerated from 13% in FY20 to 30%+ expected in FY23
Critical levers are driving our growth and margins
• Winning more and bigger cloud apps deals (horizontal + industry)
• Winning more and bigger cloud infrastructure deals (platform + database)
• Scaling our business to drive margins
Note: Figures and growth rates based on constant currency results.
Copyright © 2022, Oracle and/or its affiliatesWinning More and Bigger
Cloud Apps Deals
Copyright © 2022, Oracle and/or its affiliatesOracle Applications Help Customers Transform and Modernize Across
Every Industry
Communications Construction & Engineering
1 billion calls and text messages routed every day $9 trillion in projects managed
supporting over 5 billion subscribers
Financial Services Food & Beverage
Handling 80% of world’s credit card transactions and 350,000 sites furnished with point-of-sale systems supporting
providing banking and insurance data for over 6.3 billion transactions
1 billion people
Hospitality Health
Hotel operations streamlined for 4.8 million rooms at Automating hospital and healthcare processes for
more than 40,000 properties 3 million health professionals; powering clinical research for the
top 10 biopharmaceutical companies
Retail Energy & Water
Commerce empowered for over 5,800 businesses in 96 Helping to reduce 32 TWh of energy use and saving
countries consumers $2.7 billion on their utility bills
Copyright © 2022, Oracle and/or its affiliatesFor Example, Oracle Can Provide the Following Integrated, End-to-End
Experience in Healthcare
Equipment, medicine supply Creating an engaging care experience
and inventory reflect care for patients while ensuring their
volume and budget records are secure and up to date
Oracle Procurement, SCM Improve the Cerner, Oracle CX
and Commerce clinical
experience
Financial records and Individual care and
plan are integrated diagnosis used to
and reflect staffing advance population health
needs Modernize Advance and inform the development of
new drugs and therapies
ERP, EPM, HCM administrative interoperability
and operational and population Cerner and Health Sciences
solutions health Applications
Copyright © 2022, Oracle and/or its affiliatesOracle is Recognized for Our Leadership In Applications
Rated as a Cloud
Apps Leader 58 Times
ERP SCM HCM CX
23X 7X 8X 20X
Number of times top-tier analyst firms placed Oracle in a leadership
position over the last 24 months as of October 2022.
Copyright © 2022, Oracle and/or its affiliatesOver 45,000 Customers Are Running Oracle Cloud Applications Copyright © 2022, Oracle and/or its affiliates
We are Securing More and Larger Cloud Deals with Customers
# of New and Expansion Deals ARR Bookings from Multi-Pillar Deals
+74%
+98%
FY18 FY22 FY18 FY22
Source: Internal analysis of new and expansion cloud transactions.
Copyright © 2022, Oracle and/or its affiliatesOracle’s Cloud Business is Now a Majority of Apps Revenue
$15B
Strategic Back
$ in bn, CD Office SaaS Apps
are 2.8X the size
from
5 years ago
CLOUD
ON-PREMISE
FY18 FY19 FY20 FY21 FY22 LTM
Source: Internal analysis with last-twelve-month (LTM) as of 8/31/22.
Copyright © 2022, Oracle and/or its affiliatesAnd a Large Additional Revenue Opportunity Exists as Our Applications
Support Customers Move to the Cloud
Incremental revenue opportunity is around $10-15 billion
$15-20B
3-4X
$5B
Applications Support Annual Recurring Revenue
Source: Internal analysis using last-twelve-month (LTM) applications support revenue as of 8/31/22. Conversion uplift based on historical yields.
Copyright © 2022, Oracle and/or its affiliatesWinning More and Bigger
Cloud Infrastructure Deals
Copyright © 2022, Oracle and/or its affiliatesIn 2016, Oracle Had One Public Data Center Providing Five Cloud Services
Phoenix
• IAM
• VCN Commercial
• Bare Metal Compute
• Block Volume
• Object Storage
Copyright © 2022, Oracle and/or its affiliatesOracle Cloud Infrastructure Now Has the Most Global Locations
Stockholm
Amsterdam
Montreal
London Frankfurt
Germany
Israel 2
Toronto
Mumbai
Zurich Dubai
Newport Saudi Arabia Chuncheon
Chicago Serbia Hyderabad
Madrid
Jerusalem
Spain Milan
San Jose Marseille
Jeddah
Ashburn Paris Seoul
Phoenix Vinhedo
Abu Dhabi
Tokyo
Singapore
Colombia
Osaka
Sao Paulo
Johannesburg
Mexico 2
Santiago
Queretaro Chile 2
Melbourne
Sydney
Commercial Government
40 regions + 9 announced
Commercial Sovereign Planned
12 Interconnect for Azure regions Planned
Interconnect for Azure
Copyright © 2022, Oracle and/or its affiliatesOracle Has Grown its Infrastructure Services Faster Than • CI/CD Project
Service
DevOps Deploy
Any Other Cloud Provider
•
• Application Performance Service
Monitoring • DevOps Build
• E4 Flexible Compute Pipelines
• Network Load Balancer • DevOps Source
• E3 Flexible Compute • Capacity Reservations Code
• Container Engine • Functions • Data Science • VMware vSphere 7 Management
for Kubernetes • Events • Data Flow (Spark) • Vulnerability Scanning • BDS ODH
Registry • Streaming • Data Catalog VCN Visualization • Data Labeling
• IAM • •
• Resource Manager • Data Integration DRG-2 (Transit Hub) • OCI Certificate
• VCN • Autonomous Data •
Warehouse • Azure Interconnect • Oracle Visual Builder IPv6 Management
• Bare Metal Compute Data Safe
•
Autonomous • • Object Storage Inter-region latency dashboard • Integrated
• Block Volume •
Notifications
•
Transaction • replication Object Storage Intelligent LB/WAF
• Object Storage •
Processing • Marketplace • Object Storage Tiering • Identity Domains
• Email Delivery • HPC Compute versioning • Intel X9 shapes
• File Storage • Dedicated Compute • Object Storage • AI Services (Language, Vision,
• AMD VMs and Hosts immutability Speech, Anomaly Detection)
• VM Compute • Autonomous Linux Compute and ADB
Bare Metal • • Ampere Compute Instances
• X7 Compute Platform • Compute Autoscaling Per Second Billing
• Compute • Bastions-as-a-Service
• Bare Metal DBaaS • Exadata X8 Shapes • Vault
2022
Emulation • UHP block volumes
• VM DBaaS / RAC • Always Free Services • NoSQL
Exadata Cloud • Block Volume • Java Management
•
cross-region copy • Oracle Digital Assistant • MySQL Service
• Windows images • Oracle Analytics • Compliance
Load Balancing • Fault Domains
•
• Cluster Networking • Oracle Integration Documents
• Auditing Oracle Content
105
•
FastConnect • Health Checks 2021
•
• DDoS protection and Experience
• Archive Storage • API Gateway
WAF
Cloud Services
•
• Block Volume Cloning
• Identity Federation • DNS 2020
• NTP • KMS
2019
2016 2018
2017
5
Cloud Services
Copyright © 2022, Oracle and/or its affiliatesOracle is Capturing Many Different Types of Workloads
Low ML
HPC Code
Apps Bare Metal
DR
Bare
Metal Scale out
Applications Cloud Native
2016 2022
Multicloud
Analytics
Database Custom
Consolidation Database
Applications
Modern Apps
Copyright © 2022, Oracle and/or its affiliatesOur Infrastructure Progress is Being Recognized by Analysts
Gartner Solution Scorecard 2021
Amazon Microsoft Oracle Cloud Google
Web Services Azure Infrastructure Cloud Platform
94% 84% 78% 75%
Oracle continues an impressive Although OCI began as a platform for delivering Oracle- OCI’s capabilities
year-over-year pace of innovation centered solutions, its capabilities have now expanded have improved markedly
that brings it closer to the market to the point where it can meet requirements for a for the second year
leaders. broader range of workloads. in a row.
Raj Bala, Gartner C Dwight Klappich, Gartner Lydia Leong, Gartner
Copyright © 2022, Oracle and/or its affiliatesOver 18,000 Customers Are Running Oracle Cloud Infrastructure Copyright © 2022, Oracle and/or its affiliates
The Oracle Database is the Most Complete and Simplest Platform and
Handles all Data Management Needs
COMPLETE SIMPLE
Converged Database Autonomous Database
Complete support for all modern data types, Converged DB delivered as a self-driving,
workloads, and development styles self-securing, self-repairing Cloud Database
Completely consistent, scalable, available, and Simplest DB for developing and running any apps or
secure analytics at any scale or criticality
Copyright © 2022, Oracle and/or its affiliatesGrowth of Oracle Cloud Database Services is Accelerating
>50% of Database support base has now
upgraded to 19c
200%+ • This is the key enabler to further adoption of
Autonomous Database
Offerings now available via multicloud
• Oracle Database Service for Azure
• MySQL HeatWave for AWS
Thousands of customers now running Oracle
Cloud Database Services Revenue Autonomous Database
2
3
4
1
2
3
4
1
2
3
4
1
-Q
-Q
-Q
-Q
-Q
-Q
-Q
-Q
-Q
-Q
-Q
-Q
20
20
21
21
21
21
22
22
22
22
23
20
FY
FY
FY
FY
FY
FY
FY
FY
FY
FY
FY
FY
Copyright © 2022, Oracle and/or its affiliatesOracle’s Infrastructure Cloud Business Remains in the Early Innings of
Transformation
$23B
$ in bn, CD
Cloud Is $1.0 billion in OCI services that are provided internally to run Oracle SaaS applications.
Copyright © 2022, Oracle and/or its affiliatesAnd a Large Additional Revenue Opportunity Exists as Our Infrastructure
Support Customers Move to the Cloud
Incremental revenue opportunity is around $40-55 billion
$56-70B
4-5X
$14B
Infrastructure Support Annual Recurring Revenue
Source: Internal analysis using last-twelve-month (LTM) infrastructure support revenue as of 8/31/22. Conversion uplift based on historical yields.
Copyright © 2022, Oracle and/or its affiliatesScaling our Business to
Drive Margins
Copyright © 2022, Oracle and/or its affiliatesEven with Accelerating Revenue Growth, Profitability Remains Key
Oracle’s operating margin is 2X the average of other technology peers
(1)
42%
Peer Group (2) 21%
Source: Current fiscal year consensus estimate of non-GAAP operating margin for each company.
(1) Oracle non-GAAP operating margin includes first year impact of Cerner acquisition. Non-GAAP operating margin excludes stock-based compensation, amortization of intangible
assets, acquisition and related expenses, and restructuring expenses.
(2) Peer group operating margin includes Amazon, Google, Microsoft, IBM, Salesforce, SAP and Workday.
Copyright © 2022, Oracle and/or its affiliatesThere are Several Areas Where Oracle is Driving Margin Improvement
Cloud Apps Margin Improvement Opportunities
• Deployment of all instances of Oracle apps on OCI
• Visibility to >5% improvement to Apps cloud gross margins
Cloud Infrastructure Margin Improvement Opportunities
• Majority of new region deployments are largely complete or in-process
• Incremental investments will mainly focus on build out of existing regions
or via committed revenue
• Visibility to >20% improvement to Infrastructure cloud gross margins
Operating Expense Efficiency Opportunities
• Drive higher contribution from Cerner as part of Oracle
• Continue to pursue operational excellence as the most efficient enterprise technology provider
Copyright © 2022, Oracle and/or its affiliatesThe Bottom Line? Copyright © 2022, Oracle and/or its affiliates
For Fiscal Year 2026, Oracle is Targeting the Following
$65B 45% >10%
Total Organic Operating Margin Annual EPS
Revenue (Including Cerner) Growth
Note: Cerner included in the organic base. Operating margin is non-GAAP. Non-GAAP EPS growth rate is in constant currency.
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