Oracle Company (NYSE: ORCL) Q3 2022 earnings name dated Mar. 10, 2022
Company Contributors:
Ken Bond — Senior Vice President of Investor Relations
Safra A. Catz — Chief Govt Officer
Lawrence J. Ellison — Chairman of the Board and Chief Know-how Officer
Analysts:
Brad Zelnick — Deutsche Financial institution — Analyst
Raimo Lenschow — Barclays Capital — Analyst
Phil Winslow — Credit score Suisse — Analyst
Keith Weiss — Morgan Stanley — Analyst
Kirk Materne — Evercore ISI — Analyst
Presentation:
Operator
Good afternoon. Thanks for standing by. Welcome to Oracle’s Third Quarter 2022 Convention Name.
It’s now my pleasure handy at the moment’s convention over to Oracle Senior Vice President, Ken Bond.
Ken Bond — Senior Vice President of Investor Relations
Thanks, Holly. Good afternoon, everybody, and welcome to Oracle’s third quarter fiscal 12 months 2022 earnings convention name. A duplicate of the press launch and monetary tables, which features a GAAP to non-GAAP reconciliation and different supplemental monetary info, may be seen and downloaded from the Investor Relations web site. Moreover, an inventory of many purchasers who bought Oracle Cloud providers or went dwell on Oracle Cloud not too long ago will probably be accessible from the Investor Relations web site following this name. On the decision at the moment are Chairman and Chief Know-how Officer, Larry Ellison; and CEO, Safra Catz.
As a reminder, at the moment’s dialogue will embody forward-looking statements, together with predictions, expectations, estimates or different info that is likely to be thought of forward-looking. All through at the moment’s dialogue, we are going to current some vital components regarding our enterprise, which can probably have an effect on these forward-looking statements. These forward-looking statements are additionally topic to dangers and uncertainties which will trigger precise outcomes to vary materially from statements being made at the moment.
In consequence, we warning you towards putting undue reliance on these forward-looking statements, and we encourage you to assessment our most up-to-date stories, together with our 10-Okay and 10-Q and any relevant amendments, for an entire dialogue of those components and different dangers which will have an effect on our future outcomes or the market worth of our inventory. And eventually, we’re not obligating ourselves to revise our outcomes or these forward-looking statements in mild of recent info or future occasions. Earlier than taking questions, we’ll start with just a few ready remarks. Nevertheless, we will probably be making no feedback relating to Cerner.
With that, I’d like to show the decision over to Safra.
Safra A. Catz — Chief Govt Officer
Thanks, Ken, and good afternoon, everybody. I’d like to begin by acknowledging the tragic occasions unfolding in Japanese Europe because of the Russian invasion of Ukraine. We’re working extremely arduous to assist our Ukrainian workers and assist our clients and companions. We have now suspended all Oracle operations in Russia, and we did so effectively over per week in the past.
I’ll now flip to Oracle’s third quarter outcomes. I’ll assessment our non-GAAP outcomes utilizing fixed greenback progress charges except I say in any other case. And clearly, we had a wonderful quarter with complete income rising over 7%. Not solely was complete income above the midpoint of my steering, however it was additionally the very best natural progress price since we started our transition to the cloud. We noticed broad-based outperformance in all segments. And for the primary time in additional than 10 years, all segments of our enterprise noticed progress.
Complete cloud revenues, when annualized, at the moment are $11.2 billion, they usually grew 26%. I count on the cloud income will exit the fiscal 12 months rising within the mid-20s. Complete cloud providers and license assist revenues for the quarter had been $7.6 billion, up 8% and accounted for 73% of complete firm income. GAAP utility subscription revenues noticed document stage natural progress of 10% and had been $3.2 billion.
Fusion apps had been up 29%, with strategic back-office purposes now having annualized income of $5.1 billion and rising 30%, together with Fusion ERP, up 35%, and Fusion HCM, up 22%, and NetSuite ERP, up 29%. GAAP infrastructure subscription revenues had been $4.5 billion, up 7% and better than final quarter. And excluding legacy internet hosting providers, infrastructure cloud providers grew greater than 60%. And I count on the infrastructure income progress price will development increased over time.
OCI consumption, which incorporates autonomous database, was up 93%, additionally increased than final quarter. And complete Cloud at Buyer income was up 43%, with the backlog for Cloud at Buyer machines rising to triple digits. Database subscription revenues, together with database assist and database cloud providers, had been up 4%, and once more, increased than final quarter. License revenues had been $1.3 billion, up 4%, with sturdy efficiency in our tech enterprise. So all in, complete revenues for the quarter had been $10.5 billion, up over 7%, and as I discussed earlier, our highest natural progress price in over 10 years.
Working bills had been up 10% this quarter as we make investments to fulfill rising demand for our cloud providers. The gross margins for cloud providers and license assist was 84%, and the gross revenue {dollars} grew 5%. I count on the total 12 months progress in gross revenue {dollars} for cloud providers and license assist will probably be increased than final 12 months. Our plan is to proceed to develop income whereas we push our prime line progress into double digits subsequent 12 months.
Non-GAAP working revenue was $4.8 billion, up 4% from final 12 months. And the working margin was 46%, increased than all of our opponents. Earnings per share was adversely affected by round $0.05 per share, primarily as a result of share worth declines of fairness investments impacted by the widespread downturn in fairness markets final quarter. The non-GAAP tax price for the quarter was 19%, consistent with our base tax price. And earnings per share was $1.13 in U.S. {dollars}, up 1% in fixed forex and down 3% in U.S. {dollars}. The GAAP tax price was 18.4%, barely under our base price. And the GAAP earnings per share was $0.84 in U.S. {dollars}.
Working money circulate for the final 4 quarters was $10.4 billion, and our free money circulate over the identical interval was $6.6 billion. Each outcomes had been negatively affected by a onetime litigation cost in Q2. Capital expenditures for the final 4 quarters had been $3.8 billion, and capex for Q3 was $1.1 billion. And we’re on monitor to speculate $4 billion in capex this 12 months. We now have greater than $23 billion in money and marketable securities. The short-term deferred income steadiness is $7.9 billion, up 1%, with gross deferred income rising 6%.
The remaining efficiency obligation, or RPO, steadiness is $38.5 billion, up 13% in fixed forex as a result of very sturdy bookings. Roughly 59% is predicted to be acknowledged as income over the following 12 months. As we’ve stated many occasions earlier than, we’re dedicated to returning worth to our shareholders via technical innovation, strategic acquisitions, inventory repurchases and prudent use of debt and the dividend. This quarter, we repurchased seven million shares for a complete of 600 million as we diminished the buybacks prematurely of the acquisition of Cerner.
We’ve paid out dividends of $3.5 billion during the last 12 months, and the Board of Administrators once more declared a quarterly dividend of $0.32 per share. Our enterprise is powerful as our fast-growing cloud enterprise continues to turn into a bigger proportion of the general enterprise. A couple of factors. First, my steering assumes that Cerner doesn’t shut in This fall, although it very effectively could shut within the quarter. And once more, Cerner needs to be accretive within the first 12 months.
Secondly, cloud is essentially a extra worthwhile enterprise to on-premise. And I count on that our full 12 months non-GAAP working margins for fiscal 12 months 2022, which we’re ending now, will probably be 1% to 2% increased than pre-pandemic ranges of 44%. Let me now flip to my steering for This fall, which I’ll present on a non-GAAP foundation. Now the U.S. greenback strengthened dramatically in November. And as you all know, it was a number of fluctuations this quarter. However assuming forex trade charges stay the identical as they’re proper now, I count on we are going to see a forex headwind of two% to three% on income and $0.05 unfavourable for EPS in This fall.
In fact, the greenback might simply strengthen from right here. Complete income for This fall is predicted to develop between 6% to eight% in fixed forex and develop between 3% to five% in USD. Cloud service and license assist income for This fall is predicted to develop between 6% to eight% in fixed forex and develop between 4% to six% in USD. Non-GAAP EPS for This fall is predicted to be between 1.40 and 1.44 in fixed forex. GAAP EPS is predicted to be between 1.35 and 1.39 in USD.
Now each non-GAAP and GAAP EPS are anticipated to say no year-over-year as a result of some massive funding beneficial properties we noticed final 12 months in addition to a really low tax price final 12 months. It was 10.7%. Each of those masked the sturdy earnings progress and momentum we proceed to see out of our core cloud enterprise. My EPS steering for This fall assumes a base tax price of 19%. As I at all times say, nonetheless, onetime tax occasions might trigger precise charges for any given quarter to be increased or decrease, however I count on that in normalizing for these onetime tax occasions, our non-GAAP tax charges will common round 19% or so.
And with that, I’ll flip it over to Larry for his feedback.
Lawrence J. Ellison — Chairman of the Board and Chief Know-how Officer
Thanks, Safra. I’ve two components to my feedback. I’m going to begin with, if you’ll, enterprise as typical. And that’s going from power to power in our ERP and HCM cloud companies. I’m going to go over the wins and the go-lives for our SaaS — strategic SaaS enterprise. Second, I’m going to speak about our brand-new MySQL HeatWave product. I feel it’s honest to say, and I’m going to learn the quotes — what I’m going to do is converse a bit bit about it, after which I’m going to learn the quotes from analysts and clients.
And I feel you’ll discover that we’ve by no means had a product so effectively obtained by clients and analysts in our historical past. I’m unsure the {industry} has both. These are actually — it’s a exceptional innovation, however I’m going to get to that in a second. First, how is our SaaS enterprise doing proper now? Total, we’ve unimaginable progress, profitable increasingly more within the ERP and HCM again workplace. Q3 was an exceptionally sturdy quarter for ERP cloud gross sales. We now have over 10,000 Fusion ERP, HCM clients.
And for the primary time, we’re starting to see — we’ve been on this enterprise lengthy sufficient. We’re starting to see us roll up sure industries, beginning with the biggest {industry} on Earth, well being care. Okay. So how are we doing in well being care? We have already got Tenet Well being, Kaiser, Mayo Clinic, Cleveland Clinic, Northwell Well being, Mount Sinai, Atrium Well being. I can go an extended checklist of ERP and HCM wins within the well being care — these are all well being care suppliers.
We’ve added some further well being care suppliers, primarily hospitals and clinics. We’ve added the CHS Neighborhood Well being Providers. That’s a consortium, that’s 83 hospitals, and it’s an ERP, HCM, SCM win there. And we’re changing Kronos. I name that out as a result of Kronos — hospitals actually are — whereas they’re not acknowledged having some similarities to Uber, they’ve lots of people that work at hospitals that aren’t workers on the hospitals. Hospitals have a gig financial system. Docs work in a number of hospitals, a number of clinics, have their very own places of work.
Nurses, identical factor. Scheduling and paying the workforce in hospitals is without doubt one of the most complex issues ongoing in our altering financial system. And we’ve tailored our HCM methods in order that we do assist the hospitals recruit, monitor, schedule and pay for his or her well being professionals. The one different firm that was doing that, somebody not very well-known is Kronos. And we’re starting to switch out Kronos within the hospital area, and we did it to group well being methods.
We gained an HCM deal over Workday at TriHealth. Loma Linda College’s well being care, well being facilities, we gained an HCM over there, they usually have already got our ERP. Well being care is attention-grabbing. I began by speaking about hospitals, present — individuals who present well being care. Well being care {industry} is far greater than that. There are medical system producers. They’re pharmaceutical corporations. They’re the payers, insurance coverage corporations and authorities businesses which can be all a part of this well being care ecosystem.
So we’re not simply centered on suppliers like hospitals and clinics, but additionally we gained an enormous ERP deal over SAP at Johnson & Johnson — at J&J. We gained an enormous ERP deal over SAP on the medical system firm, Haemonetics. We gained an ERP deal at Saskatchewan Well being Authority, one of many authorities payer, and many of the payers in well being care are governments. So it’s this whole ecosystem that we’re constructing particular options and capabilities for to automate well being care throughout the board.
Nobody has been in a position to roll up well being care. It was pack a bit bit. This portion of simply the suppliers, simply the ambulatory clinics, simply the inpatient hospitals, simply the payers, simply the pharmaceutical firm, simply the medical system. We’re going after all the built-in ecosystem, and we’re having some nice outcomes. Clearly, that influenced our determination to purchase Cerner. We have now nice go-lives at Franciscan Missionaries well being system. That’s a consortium of over 20 hospitals. We wished INTEGRIS Well being. They went dwell on our ERP, HCM, FCM, 16 hospitals.
Nemours Kids’s Well being went dwell in HCM with 34,000 customers. So well being care has been an actual power for us. And clearly, we’ll get stronger with Cerner as we offer further functionality to suppliers. Okay. The opposite {industry} that we’ve at all times outlined as being a key strategic goal of ours along with well being care are — is monetary providers. And we’ve a really sturdy place in monetary providers, Financial institution of America, JPMorgan Chase, Santander, Financial institution New York Mellon, HSBC, Lloyds, Macquarie, Credit score Suisse, UBS, Credit score Agricole and much more are our clients in ERP and HCM.
We simply gained TD Financial institution, ERP win over SAP at TD Financial institution. We simply gained Silicon Valley Financial institution, one other win over SAP. We gained Societe Generale in France. We now have two of the three largest banks after profitable Credit score Agricole in Q2, and we are going to get the opposite one. We are going to get Paribas very quickly. JPMorgan Chase simply did an enormous growth of our — on our HCM product. Uncover, the bank card, simply went dwell on ERP. So once more, sturdy in monetary providers, getting even stronger.
In Communications, our large clients, AT&T, Orange, MTN, Birdie, Extremely, all all over the world — we simply added an enormous ERP win at Rogers Communications. Large go-live at Windtree, and that was a substitute. The go-live at Windtree was a substitute of SAP, not a win over SAP, however changing an present SAP system. In logistics and transportation, we had — the place — our large clients are UPS, FedEx, Knight Swift, Yellow, Schneider Nationwide and so forth. We had an enormous ERP HCM win over SAP at U.S. Categorical.
We had an HCM win at TD for its freight the place we changed Workday. Didn’t beat Workday. We changed an present Workday system. Go-live at DHL. DHL is de facto attention-grabbing. It was a go-live in Germany and Austria proper in SAP’s yard. And we’ve quite a few wins in Germany. I feel that is why we’re fairly assured today towards the previous winner — the winner on the on-premise ERP wars, SAP. In Germany, in SAP’s yard, we gained DHL. We gained Deutsche Submit. We gained Deutsche Bahn. We gained Durr IT Providers, and we simply added a win at Daimler truck over SAP.
In Japan, a rustic actually not recognized for getting bundle utility software program very a lot, we’ve obtained a reasonably good place in Panasonic. We’re in Panasonic. We’re in Toyota. We’re at Mizuho Monetary Providers. This quarter, large wins at Canon — an enormous ERP win over SAP at Canon. An enormous win at Taisei that’s one of many 5 largest common contractors in Japan. So doing effectively in Germany, doing effectively in Japan, doing effectively in these large economies the place, traditionally, we’ve not carried out that effectively in purposes, however we at the moment are.
In grocery, the place we’ve Sainsbury, Kellogg, Tesco, Auchan, Kroger and Albertsons. We had an enormous ERP growth at Kroger and an enormous go-live at Albertson with 280,000 customers. Albertsons is now dwell on each HCM and financials. So very sturdy in grocery. Motels and resorts had been our large logos are Marriott, Hilton, Caesars, MGM. We simply gained Intercontinental Motels and Resorts changing as an HCM win — changing — we’re not allowed to call who we changed in HCM aside from to say they’re a really massive cloud competitor of ours. Hilton, we went dwell with HCM, the largest HCM growth within the UK.
Increased ed. Increased ed the place our large logos are UCLA, Princeton, Rutgers, Vanderbilt, Penn State, College of Texas. We added an HCM win on the College of Cambridge within the U.Okay. We added three extra campuses of the College of California system for ERP. We now have six of their 9 — of the 9 campuses for ERP. Tennessee, College of Tennessee, we gained ERP and HCM. The College of Arizona, large ERP win, all increased ed.
However among the different industries, in client items, we had a extremely vital win in ERP HCM at a division of Unilever. And that was an SAP substitute, not a win over SAP. We changed them. In aerospace and protection, we gained ERP and SCM at BAE Programs, a win over SAP. We gained HCM over SAP at Tata Metal. We gained an enormous — a full suite growth at Cummins. Eni, in oil and gasoline, which has at all times been an SAP — very, very sturdy {industry} for SAP. We beat them, Eni, at a gasoline firm. Within the public sector, we obtained, effectively, a vital company today. The IOM, the UN company, Worldwide Group from Migrants.
This, once more, was a substitute of SAP. We additionally gained the U.Okay. Ministry of Protection. We went dwell with an enormous bang, ERP, HCM, SCM for over 50,000 person go-live. In excessive tech, Zoom went dwell on ERP and SCM. Iron Mountain went dwell on ERP, SCM. Mattress, Bathtub and Past went dwell on ERP. Tiffany went dwell on an HCM growth for 300 of their shops. In engineering and building, Jacobs went dwell on ERP and SCM. Environmental providers, waste administration, large suite go-live on ERP and provide chain.
And I’ll end it off in skilled providers the place ABM went dwell. Okay. So very, very sturdy quarter for us within the again workplace in ERP and HCM. Now I’d like to modify from SaaS to infrastructure. And we had a serious announcement and — are making a serious announcement about our different database. The 2 a lot widespread databases on the planet are Oracle and MySQL. MySQL is the world’s hottest open supply database. MySQL is superb at transaction processing, however traditionally, has not been good at question processing.
So MySQL clients often use the MySQL database for question — for transaction processing. After which they’ll transfer their knowledge from the MySQL database into Redshift, at Amazon or into Snowflake to do the question processing. That’s the way it’s usually used. MySQL for transaction processing, Redshift, Snowflake for question processing. By the best way, the AWS has their very own model of MySQL. They name it Aurora. And the AWS, my Redshift, MySQL Aurora, Redshift enterprise is a multibillion-dollar enterprise. Oracle — now we’re going after that enterprise in two methods. We constructed a product, MySQL HeatWave, which is totally different than earlier variations of MySQL.
MySQL HeatWave is nice at each transaction processing and question processing. So MySQL HeatWave doesn’t merely exchange Aurora. It replaces each Aurora and Redshift or it replaces each Aurora and Snowflake as a result of MySQL HeatWave does transaction processing very effectively, changing Aurora. And it does question processing quite a bit higher than Redshift or Snowflake. As a result of HeatWave runs — and we determined for the primary time to make this a multicloud product. So Oracle HeatWave will run already within the Oracle Cloud, however it’s — we even have it up and operating in AWS. And Azure customers will be capable of use it as effectively. So it’s a multicloud product.
AWS customers — why did we do this? We did that as a result of we’re going after the Aurora person base and the Redshift and Snowflake person base. We need to make it very easy to transform from Aurora and Redshift or Aurora and Snowflake to Oracle HeatWave. And if we’re operating an AWS, for instance, you press a button, a few buttons, and your knowledge is moved instantly to Oracle, MySQL HeatWave. You do not need to vary your utility in any respect.
You press a few buttons, and you progress it. Okay. Why would you do this? Nicely, as a result of the associated fee efficiency advantages. So shifting to MySQL HeatWave are extraordinary. Now I’m going to cease speaking, and I’m going to begin studying. And I’m going to begin studying analyst quotes, and I’m going to learn them phrase for phrase. So after I say the advantages are extraordinary, I’m understating what they’re saying. So let me carry up the slides. I’m going to simply begin studying just a few quotes.
Okay. One {industry} analyst, mixed with HeatWave and Autopilot, mixed with HeatWave and Autopilot, MySQL database service could very effectively be the one biggest innovation in open supply cloud databases prior to now 20 years. MySQL HeatWave and Autopilot signify a quantum leap with prime mild question efficiency and very good transaction assist. Oracle desires to open up a second entrance within the battle for the database market management. They’re attracting a wholly totally different person base with this product.
Wikibon believes that the know-how underlying MySQL HeatWave is an inflection level in database design and structure. The MySQL HeatWave know-how is by far one of the best available in the market. Oracle have proven AWS and Snowflake the best way to design and architect a real MySQL cloud database. Clients can count on MySQL HeatWave to outperform about seven occasions sooner than Amazon Redshift or Snowflake at 2.5 — two to 5 occasions decrease value. The advantages towards Amazon and Aurora are even better.
New entrants similar to Snowflake might want to enhance their cloud know-how quick to remain aggressive with HeatWave. That is all phrase for phrase what analysts are saying. And these are probably the most distinguished database analysts within the enterprise. The underside line is we imagine the competitors simply obtained outplayed in each measurable metric possible. This represents a wake-up name for the {industry} and a impolite awakening to the database cloud competitors as all of them should reply now to the MySQL innovation juggernaut.
HeatWave is the bodily manifestation of almost 10 years of deep database engineering methods, over 5 dozen patents and demonstrates what actual cloud database innovation seems to be like in 2021. Oracle launched MySQL HeatWave, they usually did ship shock waves as a result of they named and shamed mainly each database firm on the market. And my favourite is what they talked about with Snowflake. You’ll be able to spend $80,000 on HeatWave, and that may value you $420,000 to run on Snowflake. It’s a no brainer.
These new totally clear benchmarks — by the best way, we put all of our benchmarks on GitHub. It’s all public. The code, the info, the shoppers can reproduce all of those benchmarks that the analysts are speaking about. That’s what the analysts did. The analysts went out and ran their very own benchmarks. They usually had been shocked. These new totally clear benchmarks show HeatWave’s efficiency, worth and scale benefits over all different MySQL and cloud databases.
Clearly, the cloud knowledge warehouse market wasn’t prepared for this. And now the competitors must scramble as they grapple for solutions. For organizations utilizing MySQL, Oracle has given them but one more reason to spend money on its HeatWave providing by delivering seven occasions the efficiency at 1/5 the price of options similar to Snowflake. Along with huge scale-out capabilities, this mixture makes MySQL HeatWave soften down Snowflake and vaporize — it feels like I wrote it, however I didn’t. These are — and we’ll offer you all of those quotes, all in — full context, names, quotes. These are all analyst quotes.
Taken along with huge scale-out capabilities, this mixture makes MySQL HeatWave soften down Snowflake and vaporize Amazon Redshift with AQUA. MySQL HeatWave’s TPC-H analytics testing actually blows away Amazon’s Redshift with AQUA in each efficiency and price efficiency. It’s 6.8x sooner and 47% cheaper. Amazon Redshift with AQUA is 18x slower, leading to MySQL HeatWave coming in at a unprecedented 17x higher, 17x higher value efficiency. MySQL HeatWave with Autopilot units the bar orders of magnitude increased than AWS, Azure, Google and Snowflake.
I feel I’ll cease proper there and switch it again to Safra.
Ken Bond — Senior Vice President of Investor Relations
Thanks, Larry. Holly, in the event you might please put together the viewers for Q&A portion of the decision.
Questions and Solutions:
Operator
[Operator Instructions] And our first query for the day will come from the road of Brad Zelnick with Deutsche Financial institution.
Brad Zelnick — Deutsche Financial institution — Analyst
Nice, thanks very a lot and Congrats on the continued momentum and particularly all these nice buyer wins, Larry. I’ve one fast one for Safra after which a follow-up for you. Safra, simply my mannequin, it seems to be such as you had your strongest natural income progress in 10 years this quarter. And I simply need to make certain I’ve obtained that proper, and I’m not lacking something.
Safra A. Catz — Chief Govt Officer
Sure. You’ve obtained that proper. And it’s mainly due to what I’ve been telling you all for some time, which is our fastest-growing enterprise, which is our cloud, is now attending to be very large. And while you’re rising totally different components of the enterprise, 25%, 30%, 40%, 60%, and it’s an enormous quantity. It causes these — it’s simply math right here. It will increase the general price of progress of the enterprise.
Brad Zelnick — Deutsche Financial institution — Analyst
And Larry, you now have an rising variety of ISPs that at the moment are supporting and embedding OCI in addition to focused applications the place you may have among the largest international SIs on the planet actually leaning in. Are you able to speak to us about the way you’re profitable the ecosystem with OCI? And as effectively, in the event you can replace us on the combination of conventional versus nontraditional Oracle workloads. Simply assist us get a way of how the use instances are evolving and the place you see that blend going.
Lawrence J. Ellison — Chairman of the Board and Chief Know-how Officer
Nicely, I feel it’s broad based mostly. I feel one among — the again workplace — one among our companions — we’re working with one of many largest banks on the planet with — on a cost system, a B2B cost system as a result of the ERP clients are coming to Oracle. So in the event you have a look at the long run with the truth that we’re so sturdy, dominant, I’d argue, in Cloud ERP, what does the B2B buy appear to be? A B2B buy seems to be like in a contemporary cloud world, one Oracle ERP system making a purchase order from one other Oracle ERP system. And we need to automate that B2B transaction. There’s two Oracle ERP methods are speaking to 1 one other.
To automate that transaction, we’ve to have the ability to pay for that. We have now to have the ability to test credit score, finance the funds, a spread of logistics. So we’re working with massive — a really massive financial institution and a really massive logistics firm to automate that facet of our ERP enterprise. A few of it’s by no means been — you don’t consider ERP doing that, however it’s this community of those ERP methods speaking to 1 one other. That’s an enormous enterprise income alternative to activate that B2B cost system. So the banks are becoming a member of in. Logistic corporations are becoming a member of in as a result of the shoppers are right here.
As soon as the ERP clients began coming to Oracle, the entire adjoining purposes and all of the ISVs with adjoining purposes wished to be in the identical cloud because the ERP clients. The integrators needed to turn into acquainted with the cloud as a result of that’s the place the shoppers are, and that’s the place clients are going. The ISVs — and these are type of attention-grabbing ISVs. Big banks, big logistics corporations placing up their logistics and cost methods in our cloud to facilitate B2B transactions between our ERP system is only a gigantic enterprise alternative that nobody actually had ever considered earlier than.
Brad Zelnick — Deutsche Financial institution — Analyst
That’s actually useful. Thanks a lot, Larry. Congrats once more.
Operator
And our subsequent query will come from the road of Raimo Lenschow with Barclays Capital.
Raimo Lenschow — Barclays Capital — Analyst
The massive thanks. I’m making an attempt my luck right here, Safra, however like every feedback on the TikTok rumors that got here out at the moment? After which in case you need to reply that. Larry, one for you on, on that success within the again workplace methods, like is that pushed by post-pandemic individuals realizing, oh, shoot, I actually need to replace that. In order that’s type of extra short-term increase that you simply’re seeing right here? Or do you suppose there’s extra legs to that?
Safra A. Catz — Chief Govt Officer
The one factor I can let you know is we’ve a wonderful relationship with the parents at TikTok.
Lawrence J. Ellison — Chairman of the Board and Chief Know-how Officer
Sure. I’ll second that. It’s glorious. Let me take the opposite a part of your query, which is, do I feel it is a type of a 12 months 2000 like pandemic increase, individuals dashing to get to the cloud, and it’s going to decelerate after? Now that the pandemic, thank God, it’s starting to recede. Simply the alternative, we’re actually nonetheless within the early days. We’re within the early days of both understanding how totally different Cloud ERP is from on-premise ERP.
And I simply talked about this one attention-grabbing instance in that within the fashionable world, as increasingly more individuals go to Cloud ERP and you purchase — you procure one thing, that it’s actually one Oracle ERP system speaking to a different Oracle ERP system, however it must be facilitated via — with a monetary — a finance accomplice and doubtless a number of finance companions and a number of logistics companions and — to automate and finance and transfer that product from A to B and finance that product and perceive when it’s going to be delivered, all of these issues. And so no, I feel we’re actually within the early — actually early days.
Though we now have 10,000 clients in Oracle ERP Fusion, one other — virtually 30,000 clients in complete, together with NetSuite, I nonetheless suppose we’re within the very early days of doing this. It’s simply getting sooner. I imply the expansion — our progress is accelerating, accelerating, accelerating. You have a look at our progress price, it’s not happening. We’re getting greater and the expansion price, and we’re sustaining that mid-30s — excessive 20s, mid-30s progress price with NetSuite and Fusion regardless of the very fact we’ve greater than doubled.
Raimo Lenschow — Barclays Capital — Analyst
Excellent. Congrats. Yeah, it sounds very thrilling.
Lawrence J. Ellison — Chairman of the Board and Chief Know-how Officer
Thanks.
Operator
And our subsequent query will come from the road of Phil Winslow with Credit score Suisse.
Phil Winslow — Credit score Suisse — Analyst
Hey, thanks for taking my query and Congrats on one other quarter of accelerating progress. One remark out of your script at the moment actually stood out to me, and that was continued to develop income whereas we push our prime line progress into the double digits subsequent 12 months. Now clearly, that is continued reacceleration from the 6% to eight% the previous two quarters and your steering, clearly, on a continuing forex foundation for This fall. So my query to you, Safra and Larry is, are you able to assist simply unpack this for us by way of the places and takes between database and apps, cloud on-premise, and so on, that offer you confidence for continued acceleration within the double digits, but additionally, such as you stated, whereas rising income?
Safra A. Catz — Chief Govt Officer
Okay. In order you’ve seen, we’ve made a number of investments. We mainly — our capex this 12 months is double final 12 months, and that’s as a result of we’ve been placing out a number of functionality all over the world. Concurrently, our revenues have been rising. However over the previous few years, we’ve had components of the enterprise that had been important components of the enterprise that had been shrinking. And now, as you see on this quarter, for instance, all traces of companies are rising. We have now — totally different traces of enterprise have bookings progress, a few of that are as excessive as effectively over 100%.
And so what’s occurred is the — many of the enterprise is now rising. And they also’re a lot much less of the negatives. And the issues that we’re getting smaller like utility license, for instance, is a really small quantity now. After which, after all, our know-how license goes very, very effectively, together with, simply this quarter, know-how was up 9%. So the cloud enterprise is on an absolute position.
You’ll be able to see it within the numbers already and ERP, HCM, but additionally, after all, OCI straight and autonomous database. And simply all these components of the enterprise at the moment are rising, they usually’re massive. And the shrinking components of the enterprise — initially, there’s quite a bit much less shrinking. We grew and to the extent that we’ve some provide chain loosening the place we’re in a position to ship all of our bookings, we simply count on progress kind of everywhere. And so we’re very upbeat about this subsequent 12 months.
Phil Winslow — Credit score Suisse — Analyst
Nice, thanks very a lot. Respect that.
Operator
Our subsequent query goes to return from the road of Keith Weiss with Morgan Stanley.
Keith Weiss — Morgan Stanley — Analyst
Glorious. Thanks guys for taking the query and congratulations on a fantastic quarter. It’s nice to see the momentum actually displaying via to the outcomes now. Final quarter, you guys talked quite a bit about an rising concentrate on verticals, notably banking and well being care. This quarter, you’re speaking about rolling up a few of these verticals. Are you able to speak to us a bit bit extra in regards to the method on the way you construct up and create that roll up within the vertical? How a lot of that effort is constructing like vertical-specific merchandise? How a lot of it’s a new go-to-market technique, if you’ll, or aligning the go-to-market technique for these verticals? And the way a lot work is left to be carried out on these two sides?
Lawrence J. Ellison — Chairman of the Board and Chief Know-how Officer
Nicely, let me simply begin with well being care since you consider well being care as a vertical, and Cerner is actually in a vertical, which is an epic they compete for suppliers. And other people consider that as, effectively, that’s well being care. However that’s not well being care. There’s scientific trials for — in pharmaceutical corporations. You need to combine — the scientific trials the pharmaceutical corporations pay for and run, however really not likely.
The suppliers run these scientific trials. So the entire ecosystem — nobody’s ever tried to do all the ecosystem. However to reply your query, we had — we’re enormously enhancing our HCM system for hospitals in order that they’ll have nurses that work three days per week or 4 days per week and docs that work in a few totally different hospitals. And scheduling these unbiased contractors, if you’ll, may be very difficult.
You don’t of consider hospitals as being a group of unbiased contractors, however it’s full-time employees and unbiased contractors, and scheduling that’s complicated. Paying them is complicated. A few of them are unionized. The principles are complicated. So we’re doing a large — we’re doing a number of industry-specific options for hospitals to assist them handle their workforce.
In stock — hospital stock isn’t in a warehouse. Hospital stock — the drug, they’re scattered all all through the hospital. Nurses stations have medication — there’s an attention-grabbing drug known as tranexamic acid, which is used to cease bleeding. The place you possibly can’t go to the warehouse, somebody’s bleeding, you possibly can’t go to the warehouse and search for the drug. You’ve obtained to have the ability to discover it instantly, and it’s obtained to be near the working room.
It’s obtained to be near — the place intensive — the intensive care unit. So the stock is distributed all all through the hospital. So we’re paying RFID tags in all of the stock so you will discover issues very, in a short time. So how we deal with stock is being enhanced particularly for hospitals. And I can go on and on. One factor a physician does is earlier than I can authorize a check, earlier than I can authorize prescribing a drug for a affected person, I’ve to test with the insurance coverage firm to ensure they’ll pay for it.
Now — so the docs and hospitals spend a number of time negotiating with the payer, the insurance coverage firm. Nicely, okay, given these signs, can I get this check paid for? Sure, no? Given these signs, can I get this drug paid for? Sure, no? We’re automating that interplay between the payers and the suppliers. So sure, we’re including a number of industry-specific options to automate the interactions in all the ecosystem.
And that’s why we expect we’re in place to roll up well being care, which is a big {industry}. Nobody’s ever actually tried this earlier than, however we’ve all of the items. We have now the cost items. We automate a number of the insurers. We have now HCM, which permits us to assist them handle their workforce. We have now ERP, which helps them maintain monitor of stock. And shortly, we may have Cerner, which can assist them to ship care to sufferers. So we’ll be — and we’ve scientific trial system for the pharmaceutical noise. We have now all the portfolio, and we’re interconnecting all of the items so we are able to make that ecosystem work effectively for the primary time. And really, the pandemic has confirmed we’re in determined want of such an built-in system.
Keith Weiss — Morgan Stanley — Analyst
Sure. It feels like a large worth unlock if it will get all pulled collectively.
Lawrence J. Ellison — Chairman of the Board and Chief Know-how Officer
I feel we are able to do it. We’re on our option to do it. And the advantages to Oracle are nice. However really, it’s — that is — no less than for me, personally, it is a mission. I feel the advantages to each affected person on the planet goes to be monumental. We have to do that. The pandemic has proven quite a lot of weaknesses in our well being care methods. We have now the know-how to deal with these weaknesses, and that’s what we’re going to do.
Safra A. Catz — Chief Govt Officer
Okay. Let me simply say one different factor. So we’ve quite a few vertical industries through which we’ve merchandise, and our opponents don’t have merchandise. And this has been a core a part of how we work. We work with retailers. We work in monetary providers. We work in utilities. We work in building engineering. We don’t simply modify ERP methods barely and say we’re within the {industry}. We’re really in operational methods within the {industry}, and it brings unimaginable worth to our clients to have the ability to use these merchandise.
Keith Weiss — Morgan Stanley — Analyst
Proper, okay. Thanks. And our please excuse me.
Operator
Our final query for the day will come from the road of Kirk Materne with Evercore ISI.
Kirk Materne — Evercore ISI — Analyst
Thanks very a lot. Safra, I hoped you may develop a bit on the power in Cloud at Buyer. And simply actually two issues about that. How ought to we take into consideration Cloud at Buyer being considerably of a number one indicator for adoption of autonomous database? After which are any of the provision constraints beginning to loosen up a bit on that entrance by way of possibly serving to to speed up rev rec in that space over the following couple of quarters?
Safra A. Catz — Chief Govt Officer
Nicely, I’ll admit that the previous couple of years have been actually difficult, and I’m extremely happy with our workforce. I feel our glorious relationships with our great suppliers made it doable for us to construct out our cloud in addition to present {hardware} to our clients. We couldn’t meet each want as shortly as we might have preferred, and we’ve a particularly massive backlog. That’s completely true. That backlog additionally provides me monumental visibility as a result of these clients have instructed us they need Cloud at Buyer or they need {hardware}.
And I’ve a line of sight to get it landed of their amenities. The fact is that we’ve a lot occurring on the identical time. We’ve constructed out our cloud internationally. We’ve constructed quite a few non-public clouds the place it’s precisely the identical functionality as our public cloud for our clients who’ve regulatory necessities that require one thing particular or whether or not it’s knowledge sovereignty or in any other case. And we’re assembly everybody’s wants.
And I feel that, once more, the unimaginable optimism you hear from me and Larry may be very a lot as a result of we’ve line of sight to the huge demand that has been coming our manner and that we’ve been dealing with and a line of sight on the best way to ship it. So now I learn the newspapers — really, I don’t learn the newspaper. I learn the pc that was a newspaper, and so we see every thing that’s occurring. However I’m extraordinarily assured within the capabilities of my workforce to execute.
Operator
Okay. And that may conclude the Q&A portion of at the moment’s name. I’ll flip it over to administration for his or her closing feedback.
Ken Bond — Senior Vice President of Investor Relations
Thanks, Holly. A telephonic replay of this convention name will probably be accessible for twenty-four hours on our Investor Relations web site. Thanks for becoming a member of us at the moment. And with that, I’ll flip it again to Holly to shut the decision.
Operator
[Operator Closing Remarks]
