The Six Five Team discusses Oracle Q1 2024 Earnings.
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Transcript:
Patrick Moorhead: Oracle had a good quarter and it was an iffy guide according to the street, and they had the largest decline in years on their stock. But I got to tell you, we don’t live and die as industry analysts on the stock price and investors’ reactions. In fact, I typically will make fun of Wall Street and how it reacts. It had monster growth for cloud IaaS, by the way. The company that three years ago everybody was saying didn’t have a clue about Cloud. Fusion and NetSuite ERP keep trucking at 20ish percent growth, which by the way is pretty impressive with all the single digit SaaS growth, enterprise SaaS growth, 10% SaaS growth, still trucking along. I think that just shows the…
Hey, I think NetSuite is actually, it might have two new customers this quarter as well. I can’t believe I didn’t come up on the call. I can’t believe, Dan, you might have not come up on the call. No respect. It’s just such a disappointment. They rolled out AI companies. The cool part is not only did they roll out Brownfield AI customers, they brought out Born in the Cloud AI folks, Cohere, Twelve Labs, John Snow Labs, Luma AI. That, to me, demonstrates that they have something special from a value proposition. I ignored and yawned at the deal they did with Nvidia, but I believe that that is now paying dividends. Then if you look at the re-architected OCI, you put those two together at reasonable prices where their pricing strategy is to price the less differentiated stuff at lower. I think we’ve got a winning combination here.
Daniel Newman: It’s a requirement to do an announcement with Jensen. I think the Six Five did one first, by the way.
Patrick Moorhead: We did.
Daniel Newman: We were there and now others are following us. It’s not atypical, Pat. We are the trendsetters. Oracle had a solid quarter. Look, they missed revenue by… It’s almost weird when a company that has like 77% predictable revenue couldn’t find the 20 million it needed. I know this sounds crazy, but to come in at 12.47 versus 12.45, that was legitimately a billion. You’re talking about 20 million across 12 and a half billion dollars. It’s almost crazy how that can go wrong, especially when you run the ERP systems and you have all the billing systems in your tools and tech. But having said that, a crazy run up of value this year. The stock just absolutely ripped and roared. The company’s been on fire in its cloud infrastructure business.
The NetSuite and apps since it’s part of their company has been regularly incredibly performant. I have no beef with this. I think there’s a couple of things. We are in this continuous period of sell the news. It’s been running up, running up, running up. Company created much stronger earnings than a year ago, revenue growth at close to double digits. Remember this is a company that has a disruptive business segment and cloud, but it has a massive established customer base in its database business. That’s going to be a huge percentage of its business for a long time. That growth is more stable than it is accelerated. Pat, I know because we got to move quick, you really hit all the high points. The sell off was sell the news. It was sell the news, it wasn’t a bad quarter, it wasn’t a bad guide. Their cloud business where their growth is coming is doing fine.
Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
