Oracle Corporation

Good day, everyone, and welcome to the Oracle Corporation first quarter fiscal year 2027 earnings call. Just a reminder that this call is being recorded. If you have a question today, please press star one on your telephone keypad. Please limit yourself to one question. I would now like to hand the conference over to Mr. Ken Bond, head of investor relations. Please go ahead, sir.

Thank you, Miriam, and good afternoon, everyone, and welcome to Oracle's first quarter fiscal year 2027 earnings conference call. On the call today are Chief Executive Officer Mike Sicilia, Chief Executive Officer Clay Magouyrk, and Chief Financial Officer Hilary Maxson. A copy of the press release including financial results tables and supplemental financial metrics and guidance is now available on our investor relations website. Also available on our website is the slide deck that will be used in this call and a gap to non-gap reconciliation. as a reminder today's discussion will include forward-looking statements and we will discuss some important factors relating to our business These forward-looking statements are also subject to risks and uncertainties that may cause actual results to differ materially from the statements being made today. As a result, we caution you from placing undue reliance on these forward-looking statements, and we encourage you to review our most recent reports, including our 10K and 10Q and any applicable amendments. And finally, we are not obligating ourselves to revise our results or these forward-looking statements in light of new information or future events. Before taking questions, we'll begin with a few prepared remarks. And with that, I'll turn the call over to Hilary.

Thanks, Ken. Hi, everyone. Great to be here with you all today. And like Ken said, you can follow along with our remarks in the earnings slide deck on our website and via the webcast. Thank you so much for joining us. Total revenue was a record $19.3 billion, up 30% year over year in U.S. dollars. And for the first time, Q1 total revenue grew sequentially, an important sign of our continued progress in building scaled infrastructure. Historically, a record Q4 was followed by a lighter Q1. But as we accelerate across the full technology stack from infrastructure to database to software, that's no longer the case. Thank you. Cloud apps were up 10% with Fusion and our industry apps tracking well above that. And Mike and Clay will give more details on those businesses in just a moment. Thank you so much for joining us. Thank you for joining us. Thank you for joining us. and the vast majority of those new contracts were via prepay or bring your own hardware or similar mechanic so won't require incremental capital from Oracle. Also, that new RPO won't impact our CapEx or revenues until fiscal 28 or beyond. Second, we started to see a strong conversion of our RPO into revenues this quarter driving our cloud infrastructure results. We've added a few slides here where you can see that strong inflection point in our RPO converting into revenues and operating profits. First, in cloud infrastructure revenues, I already mentioned the plus 121% growth for this quarter, and that's after a Q4 of plus 93%. and we'd expect acceleration to continue in the remainder of fiscal 27 as we convert more RPO into revenues. We now expect around half of our RPO to convert into sales over the next 36 months. Next, not surprisingly, you can see the acceleration in our total company revenues, here shown on a trailing 12-month basis, driving growth in Q1 to five points higher than our Q4 as cloud infrastructure accelerates and becomes a larger and larger contributor. Lastly, our growth in operating income, also on a trailing 12 month basis, shows a similar strong acceleration from 16% to 21% between Q4 and Q1. Now to our balance sheet and cash flows. We drove record cash flow from operations of $23 billion in Q1, again reflecting our strong execution against a backdrop of strong demand, as well as collection of customer prepayments. Our capex for the quarter was $28 billion, leading to negative free cash flow of $5 billion. And our net cash capex, so net of prepayments, was $18 billion for the quarter. To note, our CapEx will not be linear throughout the year. We continue to anticipate 90 to 95 billion in CapEx for the full year, with not more than 70 billion in net cash CapEx. Lastly, we're quite pleased to announce that we completed our previously disclosed $20 billion at-the-market equity issuance in entirety during the Q1. With that, let me turn the call over to Mike and then Clay to get into more details on our cloud apps and infrastructure businesses.