Oracle Corporation Japan

[Interpreted] Now I will turn this call over to KK, Senior Vice President, APAC and Japan CFO.

Thank you, Nishio-san. Good afternoon, everyone, and welcome to Oracle Japan's Third Quarter and Fiscal Year 2025 Earnings Conference Call.

We had another excellent performance in this Q3 with growth of our Cloud Services and also capturing a stable demand of on-premise license. Demand is substantial for our Cloud business, which has led to acceleration in revenue and RPO growth.

We have become a robust cloud vendor in Japan, and we continue to expand our customer base for OCI and Fusion, and our customers can do more, spend less with our Cloud Technology. We had a lot of marquee cloud customers in various industries, especially financials, information, technology, public sector, et cetera.

So let me give you a few examples. Number one, NRI.

NRI will leverage Oracle's Alloy to provide new security services and AI platforms that can address advanced governance, security and data sovereignty requirements. NRI will also deploy GPUs in the data center to provide high-performance infrastructure while meeting data sovereignty requirements for generative AI and large language models.

The platform is also optimized for seamless integration with the OCI generative AI service. For the financial industry, which places particular emphasis on control, the platform will be offered as NRI Financial AI platform.

Number two, Toyota Systems. Toyota Systems has implemented Oracle Exadata Cloud 8 customer and Oracle Cloud Infrastructure Hybrid Cloud solution as a common database platform for internal systems for the Toyota Group.

Toyota Systems develops and builds hundreds of internal systems used in a wide range of Toyota operations, including human resources, quality, procurement, using a virtualized integration platform. So in a nutshell, aiming to improve performance, enhance security, improve operational efficiency and reduce costs, they decided to integrate their database infrastructure and centralize and standardize operational management.

Number three, Yamaha. Yamaha has implemented Oracle Fusion Cloud Human Capital Management to create a new human capital management platform.

Human resources are the assets of a society and the company and development of leaders who drive business from a global perspective, placement of the right people in the right positions, composition of diverse human resources and creation of opportunities for diverse dialogue were important management issues. Selecting Oracle Cloud HCM as the mechanism to solve those issues increased the mobility of their human resources and improved the quality and the mobility for the organization.

Number four, Shiseido. Shiseido migrated B-NASS+, a sales and customer analysis system platform used by approximately 5,000 employees in an on-premise environment, to Oracle Cloud infrastructure.

As a result, operating costs were reduced by approximately 20% and nighttime batch processing was accelerated by approximately 90%. The new system improved performance and stability, reduced cost and enabled data-driven sales and marketing activities while accommodating data growth and diverse analytical needs.

I can go -- there are a few more, and I can go on and on, but 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. So let me now move to the numbers.

Total revenue at JPY 192.892 billion, grows 9.1% compared to the previous year, backed by a strong growth in our Cloud revenue. Cloud Services revenue was JPY 44.995 billion, up 26.5% and now represents about 23% of our total company revenue.

Infrastructure consumption revenues had a strong momentum also, which includes our autonomous database. Operating income at JPY 64.219 billion increased 11.3%, and net income was JPY 44.857 billion, up 11.6%.

Total revenue and all 3 margins indicated record high for Q3. I retain my guidance for FY '25 as before.

And as you can see in these numbers, we show strong cloud demand, and we hope to continue the momentum into the remaining part of FY '25. Thank you very much.

[Interpreted] So first question is from Morgan Stanley MUFG Securities, Mr. Tanaka.

On-premise license is increasing its revenue and this -- is this sustainable? Will it continue?

I mean logically speaking, on-premise license should be very small, single-digit growth or even very small single-digit decline for the next few years. We don't see it growing aggressively because customers would like to consume their database in the cloud.

So what you see here is basically some pent-up demand, and -- but we aim to have a stable license business, at least for the foreseeable future.

[Interpreted] So next is Citigroup Securities, Tsuruo-san. We have received 2 questions.

First question is the revenue growth of the Cloud. How do you see going forward?

Will it continue to grow?

So our main focus has been to grow our revenues in the cloud, both for our Technology business and in the Applications business. So we will continue to see strong growth in cloud.

And as you can see, some of the customer examples that I mentioned, they all indicate that our Cloud business is running strong. And I do expect strong growth in the future as well.

[Interpreted] Second question from Tsuruo-san. This is about the Service, and the profit of the Service has grown 70%.

So if you could give us the background, and also, will this momentum continue?

Our Services business is seeing strong momentum, especially with some of the migrations that are happening to the cloud, both on the Technology side and the Applications side. Our partners are picking up some of the work, and some of the work is coming to our consulting organization.

So I think we will continue to see a strong Services business. But having said that, our goal is to grow our Cloud, and the Services business is basically an enabler in that process.

So yes, we will see good momentum. We will see a strong Service business, but as I said, our focus is more on the software side.

[Interpreted] So Tsuruo-san has additional questions. This is regarding dividend.

How you will be announcing the dividend amount, as we enter into fourth quarter and towards the financial announcement of Q4? So the announcement in the past was after the right for the dividend had disappeared.

So it is about the timing. Will -- how you will be announcing will it change for this fiscal year?

No, we will continue to follow the same process as last year. And I don't see any change.

[Interpreted] Next question is from Kikuchi-san of SMBC Nikko. The Cloud Service in third quarter compared to the second quarter, it has grown significantly.

If you could give us why -- where the growth came from?

Primarily from -- so the growth -- thank you, Kikuchi-san. As usual, you are the person who asks me the tough question.

But, yes, it has come from -- mainly from our Technology Cloud, and we are seeing significant momentum in the Technology Cloud. And I think we will be able to sustain -- there will be some blips in different quarters.

But overall, we will have a strong momentum in Technology and also our SaaS business, which continues to be very strong as well.

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