Oracle Corporation Japan

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

We had another excellent performance this Q4 attributed to the growth of cloud services, and we captured stable demands on on- premise license. Demand is substantial for our cloud business, which has led to acceleration in revenue and RPO growth.

We are a robust cloud vendor and OCI is a natural destination for mission-critical data of majority of Japanese companies. We continue to expand our customer base for both OCI and Fusion.

Our customers can do more but spend less with our cloud technology. We had a lot of cloud customers in various industries like financials, information technology, public sector and telecommunication industry.

Let me give you some examples. Number one, MS&AD Group.

In order to standardize accounting operations at the 2 core operating companies under MS&AD Insurance Group Holdings, a new expense system used by approximately 30,000 employees is now running on Oracle Cloud ERP and Oracle Cloud Infrastructure. This has led to improved productivity and management efficiency.

With the introduction of the new system, they have achieved paperless business operation in response to the revision of the electronic bookkeeping law. Number two, Sapporo City.

The City of Sapporo has adopted OCI, Oracle Cloud Infrastructure, as a cloud service, which is selected as government cloud for its resident information system. 32 operations, including basic resident register, individual resident tax, welfare for the disabled and long-term care insurance are part of the core operational system, subject to standardization operated by the City of Sapporo.

The City of Sapporo aims to provide highly convenient administrative services by achieving both high compatibility with existing systems and cost reduction and enable a more rapid migration. Number 3, MUFG Bank.

The system infrastructure for Mitsubishi UFJ Direct and Internet banking service for individuals operated by Mitsubishi UFJ Bank renewed their Oracle Exadata database machines. Mitsubishi UFJ Direct, which is used by more than 10 million customers, is positioned at the core of bank's growth strategy and the bank is steadily advancing efforts to improve customer engagement through use of digital technology.

The renewal includes modernization to a system capable of processing about 5x the current number of transactions as well as shift to a micro service architecture and improved productivity. Number 4, Kanematsu.

Kanematsu Corporation selects Oracle Fusion Cloud Enterprise Resource Planning Solution for 33 group companies for data-driven management. Kanematsu implements Oracle Cloud ERP for general accounting, bond obligations and managerial accounting and incorporating latest AI technologies offered by Oracle ERP.

This was just to give you a sense of our broad outreach in the market that we have with our different products and services and to underline Oracle's presence in most mission-critical system application and industries. Now let me move to some of the main numbers.

Total revenues at JPY 263.510 billion growing at 7.8% compared to previous year, driven by strong growth of our cloud revenues. Cloud services revenue was JPY 61.962 billion, up 28.4% and now represents 23.5% of the total company revenues.

Together with license support, 66% of the business is now recurring. Infrastructure consumption revenue had strong momentum, which includes autonomous database.

Operating income was JPY 86.832 billion, increasing 8.8%; and net income was JPY 60.725 billion, up 9.2%. Total revenue and all 3 margins indicated record high level for the fiscal year.

With regard to my guidance through fiscal year 2026, revenue is expected to grow between 6% and 10% and EPS between JPY 490 to JPY 505. Thank you very much, and I will turn it back to Nishio-san.

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[Interpreted] So the first question is from Mr. Kikuchi of SMBC Nikko Securities.

For fiscal year that ended the revenue turned out to be a little above the mean of company's plan. Whereas for EPS, it was above the upper guidance of the company.

So it seems like that the guidance of EPS for this fiscal year seems to be rather conservative. So will there be any difference in your expense compared between last fiscal year and this fiscal year?

I think last year, we did have a strong revenue growth. We had almost like a repeat performance of the previous year.

So we ended up within our guidance range for revenue. On EPS, there were a few factors.

For example, the exchange rates, which are towards the end of year turned in our favor. Some of the expenses that we get from the corporation are in U.S.

dollars. So that worked in our favor.

So that helped the overall EPS situation for us. Regarding this year, this is our sort of best judgment based on what we see.

And hopefully, it can be more stable exchange rates that help us guide this number, basically.

[Foreign Language].

[Foreign Language] [Interpreted] The next question is from Mr. [ Watanabe ] of Sumitomo Mitsui DS.

Oracle U.S. -- U.S.

Oracle has announced or made a comment that in their cloud platform business, they grew 50%, but they say that they will even further grow to 70%. So now when it comes to Japan, what is the growth rate?

And what would be the plan going forward? Will your momentum accelerate going forward?

The nature of [Audio Gap].

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[Foreign Language] [Interpreted] Next is from JPMorgan, Mr. Matthew Henderson.

Please share with me the reasons why cloud service revenue has been strong for 2 consecutive quarters? And also, please give me updates as to the seasonality of the consumption.

Well, the reason why cloud revenue has been strong is because we are booking large deals and we -- the market is expecting a lot from Oracle. We always have been at the forefront of mission-critical systems in Japan and a lot of that has got a natural home in Oracle Cloud.

So yes, our cloud revenues will accelerate. I think the second question was on seasonality.

So I think what we will find is as the cloud revenue numbers become bigger and bigger, we will find that there will be less ups and downs, and we will continue to grow that, the cloud revenue, in a very stable manner. So some of the license seasonality that you saw previously, those -- that kind of seasonality will never be there in cloud revenue.

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[Foreign Language] [Interpreted] So next question is Noda-san from CLSA Securities. The first question is about the guidance, so I will skip.

And moving on to the second question. This is about the guidance for this fiscal year that's running.

So the upper side is 10%. In order to achieve a revenue increase of 10% in fiscal year '26, how much of revenue increase can we expect from OCI?

I don't -- we don't split the OCI revenue growth separately, but I can tell you that it's the strongest business that we have, number one. Number two, on the on-premise sales, as you can see, this year, we did not see a decline.

We hope to see similar strength in the on- premise business in the new fiscal year as well. The reason for that is we still find customers who -- a lot of the mission-critical workloads are still on-premise.

And they need -- as their data grows, they need more database licenses, so that will continue to happen. In the end, as I've said previously also, there is a possibility that our on-premise -- our cloud may cannibalize our on-premise, but with all the alloys and our own OCI that we have put -- we are setting up in this marketplace, we hope to take all our database installations, on-premise installations into our cloud, and that will be the next growth driver for Oracle in Japan.

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[Foreign Language]. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]