Oracle Corp Japan

Thank you very much, Nishio-san.

Good afternoon, everyone, and welcome to Oracle Japan's fourth quarter 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.

The 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 two 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.

First of all, MS&AD Insurance Group Holding is a new system that is used by about 30,000 employees to standardize the management of two medium-sized business companies. 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 residents 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 second one is from Sapporo City. Sapporo City operates a standardised system for organising business, and the Government Cloud is selected for the resident information system. It is the Oracle Cloud Infrastructure, or OCI. For example, this system provides 32 jobs, such as the resident general manager, individual resident tax, disability welfare, and health insurance.

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 three, MUFG Bank.

The system infrastructure for Mitsubishi UFJ Direct An internet banking service for individuals operated by Mitsubishi UFJ Bank renewed their Oracle Exadata database machines.

The third example is from the Mitsubishi UFJ Bank. The system base of the Mitsubishi UFJ Direct, an internet banking service for individuals operated by the Mitsubishi UFJ Bank, has been launched by Oracle Exadata Database Machine.

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.

This Mitsubishi UFJ Direct is used by more than 10 million customers. It is also located in the center of the growth strategy of the same bank. It uses digital technology to improve customer engagement and is definitely moving forward.

The renewal includes modernization to a system capable of processing about five times the current number of transactions, as well as shift to a microservice architecture and improved productivity.

Number four, Kanematsu. Kanematsu Corporation selects

Oracle Fusion Cloud Enterprise Resource Planning Solution for 33 Group Companies for Data-Driven Management.

This is the fourth example, Mr. Kanemachi. Oracle Fusion Cloud Enterprise Resource Planning has been adopted and data-driven management for 33 groups has been realized.

Kanematsu implements Oracle Cloud ERP for general accounting, bond obligations and managerial accounting and incorporating latest AI technologies offered by Oracle ERP.

Kanematsu-sama has been using Oracle Cloud ERP for general accounting, debt management, and management. And he has been fully utilizing Oracle Cloud ERP by incorporating the latest technology such as AI.

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.

I have introduced a few examples, but I think you have understood that Oracle is developing its products and services in a wide range of ways. I have introduced many mission-critical systems, applications, and cases where Oracle stands out in the industry.

now let me move to some of the main numbers total revenues at 263 billion 510 million jpy growing at 7.8 compared to previous year driven by strong growth of our cloud revenues

Let's move on to the numbers. First of all, the total sales of the entire company is 2635.1 million yen, which is an increase of 7.8% per year, especially due to the large increase in cloud revenue.

Cloud services revenue was 61,962,000,000 JPY up 28.4% and now represents 23.5% of the total company revenues.

Whether with license support, 66% of the business is now recurring. In terms of license support, 66% of all companies are recurring businesses.

Infrastructure consumption revenue adds strong momentum, which includes autonomous database.

Infrastructure consumption revenue also includes autonomous database, which is very powerful.

Operating income was 86,832,000,000 yen, increasing 8.8%, and net income was 60,725,000,000 yen, up 9.2%.

影響利益は868億3,200万円。 Total revenue and all three 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 490 to 505 Japanese yen.

Therefore, this fiscal year was able to record the highest record in the past when all three profits were seen separately in the fiscal year. On the other hand, according to the forecast for the current 2026 fiscal year, the sales will increase by 6 to 10%, and the EPS is expected to rise by 609 to 505 yen.

Thank you very much, and I will turn it back to Nishio-san.

The EPS is 490 yen to 505 yen, which is the correct number. I'm sorry. I will now take questions from everyone. This session is for those of you who are in the market, so please refrain from asking questions to the press. From the Q&A section of the Zoom system, please enter your first name, first name, and three questions. Please note that you will skip questions that do not contain your first name. I will read each question and answer them from CFO KK. I will omit the questions that will be repeated.

Now, I will hand over the questions and answers.

Do you have any questions?

We are waiting for your questions.

The next question is from Kikuchi-sama from SMBC Nikko Shoken. The end of FY25 is higher than the middle of the company plan, but the EPS exceeded the upper limit of the company plan. The EPS of this year's guidance seems to be careful, but is there a difference in cost between the previous year and this year's FY25 and FY26?

The first question is from Mr. Kikuchi of SMBC InfoSecurities. The fiscal year that ended, the revenue turned out to be a little above the lean of a company's plan, whereas for EPS, it was above the upper level. for 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?

So

I think the 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, you know, the exchange rates, which towards the end of year turned in our favor. Some of the expenses that we get from the corporation are in US dollars. So that worked in our favor. So that helped the overall EPS situation for us. Regarding this year, this is the 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.

Yes, last year, the sales went up smoothly, and it went up smoothly just like the previous period, and it was within our guidance. On the other hand, in the case of ESP, there are several factors. For example, in the second half of the year, US dollar. On the other hand, this year, of course, there is a possibility of what will happen to this rate, but if we continue to follow this steadily, we will make the best decision as far as we can see in the current range.

Thank you.

I will skip questions without names, so please write down your name and company name. Next, we have a question from Mr. Ohtanabe from Itsui Sumitomo DS Asset. Oracle has commented that the US market is accelerating from a 5% increase to a 7% increase in performance in a cloud-based business. Please explain whether it is accelerating in terms of Japanese performance growth rate, planning, and momentum.

The next question is from Mr. Watanabe of Sumitomo Mitsui DS. Oracle US, US 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 will be the plan going forward? Will your momentum accelerate going forward?

The nature of... Thank you very much.

First of all, the business in Japan and the business in the United States have slightly different personalities, so I will refrain from commenting on the business in the United States, but in Japan, we believe that our cloud sales will continue to accelerate. In the market, in Japan, there are several companies, such as Alloy, Thank you very much.

This is Masyu from JP Morgan. We would like to ask you to update the situation on the seasonality of consumption.

Next is from JP Morgan, Mr. Matthew Henderson. Please share with me the reasons why cloud service revenue has been strong for two 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, you know, the market is expecting a lot from Oracle. We always have been, you know, at the forefront of mission critical systems in Japan and a lot of that is 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 the cloud revenue in a very stable manner. So some of the license seasonality that you saw previously, that kind of seasonality will never be there in cloud revenue.

Thank you for your question. First of all, regarding the cloud service, we have quite a lot of large-scale cases. Of course, we have high expectations from Oracle for the market. In Japan, we have always been at the forefront in the field of mission critical. In that sense, we feel that it is a natural flow for customers to come to Oracle Cloud, so we hope to accelerate it in the future. The second question is about seasonality. As the sales of the cloud grow, we believe that the range of changes will decrease. Therefore, we hope that the cloud will grow steadily. Next, Ms. Nuda from CLSA.

I have already commented on the guidance for this year's FE26, so I will skip it. The first question is, what kind of OCI increase rate do you expect to achieve for 10% increase in total sales?

So next question is Noda-san from CSA Securities. The first question is about the guidance, so I will skip. And moving on to the second question, this is about the e-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 know. Yeah, we don't split the OCI revenue growth separately, but I can tell you that it is 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 machine critical workloads are still on-premise. and they need uh you know as their data grows they need more database licenses so that will continue to happen in the end uh you know as i've said previously also there is a possibility that our on-premise our cloud may cannibalize our on-premise but uh with all the the alloys and and our own oci that we have put we are setting up in this marketplace uh 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.

Thank you for your question. In our class, we don't cut out only the OCI, but also divide it up and open it up. However, we can say that it is the most powerful business in our company. That is the first point. The second point is on-premise, but in terms of this meeting, ああ 減少というものはありませんでしたおそらくやはり今回経年度今新しく始まった木においても同じような 強さを持って勢いを持ってオンプレミスも推移していくものと考えておりますその理由というのはまだお客様で . . I think that on-premises will continue to flourish even in the current financial situation. I think I've mentioned this before, but on-premises and cloud, I'm afraid that there may be a carnage in our business. However, in this market, we are developing a business that has a strong momentum in the form of Alloy and OCI. In the future, the on-premise installation of this database will move to our cloud. I think this will probably be a big driver for our business.

Thank you very much.