Q3 2014 Earnings Call Transcript

Transcript Call Date 03/18/2014

Operator: Good day, everyone and welcome to today's Oracle Corporation Third Quarter Fiscal Year 2014 Conference. Today's call is being recorded.

At this time, I would like to introduce Ken Bond, Vice President of Investor Relations, Oracle. Please go ahead sir.

Ken Bond - VP, IR: Thank you, Kelly. Good afternoon, everyone and welcome to Oracle's third quarter fiscal year 2014 earnings conference call. A copy of the press release and financial tables, which includes a GAAP to non-GAAP reconciliation and other financial information can be viewed and downloaded from our Investor Relations website.

On the call today are Chief Executive Officer, Larry Ellison; President and CFO, Safra Catz; and President, Mark Hurd.

As a reminder, today's discussion will include forward-looking statements including predictions, expectations, estimates, or other information that might be considered forward-looking. Throughout today's discussion we will present some important factors relating to our business, which may potentially affect those forward-looking statements. These forward-looking statements are also subject to risks and uncertainties that may cause actual results to differ materially from statements made today.

As a result, we caution you against placing undue reliance on these forward-looking statements and we encourage you to review our most recent reports including our 10-Q and 10-K, and any applicable amendments for a complete discussion of these factors, and other risks that may affect our future results or the market price of our stock.

Finally, we are not obligating ourselves to revise our results or publicly release any revisions to these forward-looking statements in light of new information or future events. Before taking questions, we'll begin with a few prepared remarks.

With that, I'll turn the call over to Safra.

Safra A. Catz - President and CFO: Thanks Ken. I'm going to focus on our non-GAAP results for Q3. I'll then review guidance for Q4 and turn the call over to Larry and Mark for their comments.

This quarter, currency was a 1% headwind to new software license and a 2% headwind to hardware and total revenue. In addition, EPS this year was reduced by $0.02 due to a currency remeasurement non-operating loss for Venezuela that obviously have not been included in my guidance. In Q3 of last year, Venezuela's devaluation had a $0.01 impact.

Q3 for us was a solid quarter and overall we're pleased with our results. Core businesses were within guidance and areas of investor focus including cloud, engineered systems and hardware all delivered strong results.

My comments today are generally going to reflect constant dollar growth rates unless I mention it otherwise. Total software revenues were nearly $7 billion, up 6% from last year. Software updates and product support revenues drove nearly half the total Company revenue at $4.6 billion, up 7% from last year. Q3 renewal rates were at a four-year high as our installed base of 400,000 customers continues to power earnings and cash flow. New software license revenues were $2.4 billion, up 5%.

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