Oracle Earnings Call Nuggets: Customer Adoption and European Growth

Oracle Corporation (NASDAQ:ORCL) recently reported its second quarter earnings and discussed the following topics in its earnings conference call.

Customer Adoption

Adam Holt – Morgan Stanley: My question is about Fusion, I was hoping I could drill in a little bit to what you are seeing there, specifically what are you seeing from customers adoption, what modules and services are customers aggregating around, how are deal sizes tracking? What are some of the details you can give us about where do you think you are on the Fusion cycle?

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Lawrence J. Ellison – CEO: We are seeing rapid growth in Fusion across the board in CRM and HCM. We are at the stage where we are winning the majority of deals and competes against Workday. So probably are outstanding – the outstanding and most rapidly growing part of our Fusion suite, which you know is the ERP, CRM and HCM, the most complete suite of cloud applications available from any supplier. We are beating Workday. I’ll turn it over to Mark for some significant examples. We’re beating them in North America and we’re almost shutting them out in Europe. So, it’s very, very exciting. We also are getting good wins on again sales force, with our fusion sales automation product. Mark?

Mark Hurd – President: I am going to comments on HCM, we’ve got the advantage in most of the international markets to be the first mover. So, we’re in those markets before anybody. Our product is quite advanced and our wins to various points internationally are just tremendous. So, I won’t go into any customer names. We’ve given you some in the past, in Europe, but very rapid there. Right now, our position has been very significant. Again, remember right now was U.S. based, we’ve now been capable or we’ve now taken it global. So, our wins globally have been significant, same thing in CRM, with sales automation. Our product is advancing. I read you some of the wins in the quarter, just – it’s been a rapid growth phase for us and as I mentioned in my script, we’re investing into it. We’ve more headcount. Our headcount now is growing in every region and we have a strong belief that more headcount with a great product like what we’ve gotten into more growth.

Safra A. Catz – President and CFO: And of course, as you know, we have nearly – no, I guess we have more than 100 modules of Fusion. So, we’ve got products in really most of the pillars, are doing very well and we’ve got customers (inquiring) it right now.

European Growth

John DiFucci – JPMorgan: My question’s for Mark. Mark it looks like Europe put up solid results this quarter. It was again, the first relatively easy comp in a while, but nevertheless double-digit growth doesn’t really fit with what we continue to generally hear about the region. Can you talk a little bit about what happened in the region and how sustainable that kind of results, are?

Lawrence J. Ellison – CEO: Well, I don’t mean to (detrack) that, but I think the only ones that aren’t surprised about Europe is us. We started investing – not like into Europe and headcount in Europe over a year ago. But it (indiscernible) encounter to what most people with conventional wisdom is, but we decided to grow our headcount as we’ve talked about globally, I mentioned the amount of scale we got in headcount. We made a decision in Europe and we hired up early. A lot of that headcount has now been in place four and five quarters – three, four and five quarters. We’ve seen pipeline result as a result of that, as a result we have gained share. Our apps growth in Europe was extremely impressive this quarter, we gained share over SAP and you’ve seen it happen multiple times. We have a very strong organization in Europe. I mentioned about the success of HCM in Europe and the quick start we’ve gotten over there, so we have a strong route there. I’m not going to tell you that we don’t see the conversion rates, we see the pressure on the conversion rates, but we are in more details than we’ve been before and we see us in a position now where we are gaining significant share.

John DiFucci – JPMorgan: If I might, just a quick follow-up for Safra. Question on cash flow, second quarter seasonally a low cash flow quarter, but the results this quarter were less than we should than we have modeled , if you could just comment on that?

Safra A. Catz – President and CFO: Well, you have to look back actually at both Q4 and Q1 we had really excellent cash flow as a result of collections were very, very, very high in fact they were higher – significantly higher than earnings and so while we collected a lot, so this quarter is just a little bit lower and in addition we had $400 million plus in tax payments which impacts it, so that’s really all there is.

John DiFucci – JPMorgan: That’s actually the delta between the $400 million – delta between what we are looking for and what you did, so thanks very much.

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