Oracle Corporation Japan (4716) Earnings Call Transcript & Summary

[Foreign Language] Now I'd like to turn this call over to KK, Senior Vice President, JAPAC and Japan CFO.

Okay. Thank you, Nishio-San. First of all, let me apologize. I have a bad throat. But I'll try and be as clear as possible. Okay. Good afternoon, everyone, and welcome to Oracle Japan's Third Quarter and Fiscal Year 2024 -- Third Quarter Fiscal Year 2024 Earnings Call. Our Cloud business has been a driver of accelerating revenue growth, and we had another excellent performance this Q3. We have become the enterprise technology cloud vendor of choice because our customers have recognized our products and services, bring out their cost efficiencies and modernize their businesses. Also, they figured out that they can get more while paying less by moving to our cloud services. We had a lot of marquee cloud customers in various industries, especially financial services, manufacturing, public sector, et cetera. Let me give you a few examples. HID. HID has over 40 years of experience in providing services to municipalities and offer a comprehensive administrative system that include resident record and welfare-related operations, which are subject to standardization by local authorities. As the digital agency emphasizes the need for CloudSMART and system modernization, the 2 companies will work together to provide new initiatives and cost-effective services, including cloud-nativization in HID's general administration system in collaboration with Oracle Cloud Infrastructure. In particular, HID evaluates that OCI is suitable for municipalities and private services as it is expected to offer significant cost and performance advantages over other companies' services. The second example is Ono Pharmaceutical. Ono Pharma is transforming the management of global clinical trials with a focus on efficiency and data-driven decision-making. The aim is to improve the prediction of potential risks and probability of trial success by utilizing Oracle's Clinical Trial Management System. Example Number 3, Daiwa Institute of Research. Daiwa Institute of Research provides high-quality, reliable system services that strongly support IT strategies and underpin business fundamentals of each company as the systems lead for Daiwa Securities Group companies. DIR has revamped the order and order analysis infrastructure for global markets divisions of the group company, Daiwa Securities Company Limited, with Oracle Autonomous Data Warehouse provided by OCI. Multi-cloud and hybrid-cloud environments can increase operational complexity and load costs, but by selecting Oracle Autonomous Data Warehouse as the analysis infrastructure, high performance is achieved at a low cost and database changes, patches, resource changes were -- the cost of these were reduced significantly by the autonomous functionality. This was just to give you a sense of the broad outreach in the market that we have with our different products and services and to underline Oracle's presence in most mission-critical systems, applications and industries. Okay. Now let me give you a brief overview of the numbers. Total revenue for 9 months at JPY 176,883 million, growing at 8.4% compared to the previous year, driven by our strong growth in cloud revenue. Cloud services revenue was JPY 35,578 million, up 36.3%, and now represents 20% of the company's revenues. Growth rates in our Fusion ERP Cloud and NetSuite were also very strong. Infrastructure consumption revenues showed a strong momentum, which includes autonomous database. Operating income was JPY 57,706 million, increasing at 9.7%. Net income at JPY 40,181 million, up also 9.7%. Total revenue and all 3 margins indicated record high in the third quarter. We hope to continue the momentum into the rest of the year. Thank you very much.

[Foreign Language]

[Interpreted] So the first question is from Ueno-San of Daiwa Securities. From third quarter end of last fiscal year, the number of head counts have come down by 3.9%. Will this pace continue?

As I've said before, we are a very efficiency-driven company. We look at our costs very closely and carefully, we monitor our costs. The -- we have been trying to reorganize and put the right resources in the right functions. And what you see as a result is minor reduction over a period of 12 months, which I would not read much into it. If you look at our revenues, we actually grew almost very close to 6% last year. For the 9 months so far, we have grown about 8% with all the efficiencies that we have gained. That is why you see margin expansion in our business. And just one more -- just one more thing to add. We will continue to hire into our growth businesses as we go into the future. So we will not stop looking for the right resources for the businesses where we want people to be.

[Foreign Language]

[Interpreted] And so second question from Ueno-San is also related to headcount or payroll cost. Japanese companies are actively increasing their salaries. But do you expect salary increase per head count at Oracle?

We -- as I said, we are a performance-driven company. We reward performances. We look for the right resources. And over time, yes, we will also align with the market. So if the market in general is going up, obviously, we cannot stay behind. We like to pay the right level of salaries to our employees.

[Foreign Language]