Oracle has announced impressive fiscal Q3 quarterly financial performance and added product announcements related to supply chain technology support.

Quarterly Financial Performance

Enterprise level infrastructure, database and software applications provider Oracle has reported Q3-FY24 quarterly financial performance that was well received by investors.

Financial performance was headlined by:

  • Total Quarterly revenue of $13.3 billion, up 7 percent in both USD and constant currency.
  • Q3 Cloud Revenue (IaaS plus SaaS) of $5.1 billion, up 25 percent in USD, up 24 percent in constant currency.
  • Q3 Cloud Application (SaaS) Revenue of $3.3 billion, up 14 percent in both USD and constant currency.
  • Q3 Fusion Cloud ERP (SaaS) Revenue of $0.8 billion, up 18 percent in both USD and constant currency
  • Q3 NetSuite Cloud ERP (SaaS) Revenue of $0.8 billion, up 21 percent in USD, up 20 percent in constant currency
  • Q3 GAAP operating income was $3.8 billion. Non-GAAP operating income was reported as $5.8 billion, up 12 percent in both USD and constant currency

 

Further reported was that remaining performance obligation, a measure of order and services backlog closed the quarter at $80 billion. That reportedly exceeded equity analyst expectations by upwards of $59 billion and represented an all-time high. Commenting specifically on this RPO performance, Oracle CEO Safra Catz indicated that: “We expect that 43 percent  of our current $80 billion of Remaining Performance Obligations will be recognized as revenue over the next four quarters, and that our Gen2 Cloud Infrastructure business will remain in a hypergrowth phase—up 53 percent in Q3—for the foreseeable future

In the update to investors, Oracle Co-Founder, Board Chaiman and CTO Larry Ellison indicated that with the acquisition of electronic health records tech provider Cerner, this tech provider has now moving the majority of existing customers to the Oracle Cloud Infrastructure (OCI) platform. Further applications related updates are reportedly planned over the coming months including hospital related supply chain management support.

Oracle announced the roughly $28.3 billion acquisition of Cerner in December of 2021 in an all-cash tender offer.

 

Product Announcements

In conjunction with this tech provider’s Oracle Cloud World, London event, and this tech provider’s spring applications update, there were a number of product announcements, including those related to ERP, supply chain and manufacturing applications process support.

Embedded Generative AI Applications Support

The tech provider has indicated the support of over 50 embedded Generative AI applications within the Oracle Fusion Applications suite. Included within Oracle Fusion Enterprise Resource Planning (ERP) are automation related to either management reporting narratives, predictive forecast explanation narratives, project or program status summaries or project plan and proposal generation.

Within Oracle Fusion Cloud Supply Chain and Manufacturing (SCM), Generative AI capabilities now reportedly support product description generation, supplier recommendations or customized procurement negotiation summaries.

In its overall Gen AI product development approach, Oracle continues to emphasize that initial cases are being driven by customer requests and that no specific customer data will be utilized to train LLM models.

Smart Operations

Oracle Smart Operations is a capability announced to enhance global supply chain operations and new supply execution capabilities within Oracle Fusion SCM.

Included in the release is Smart Operations for Manufacturing, a set of added capabilities that can combine data from various connected manufacturing equipment, workers, and supply chain processes in autonomously adjusting production levels or in executing what are described as high-value manufacturing decisions.

Specific capabilities related to Operators Workbench provides a single user interface to capture information and insights generated as workers complete daily milestones. A further capability described as Digital Work Instructions has reportedly been designed for helping customers to simplify complex assembly operations and enforce procedures to improve product quality and consistency.

A further area is Smart Operations for Maintenance that will reportedly enable customers to combine maintenance data with real-time asset information, workforce and supply chain data to provide continuous monitoring and enhance predictive maintenance.

In a pre-briefing with industry analysts, Steve Miranda, Oracle’s Executive Vice President for Applications Development, specifically indicated that Cloud adoption has definitely been on the rise for manufacturing operations focused customers and that Smart Operations has been a specific requested capability. There are plans underway for more added functionality over the next two quarterly customer functionality releases.

 

Bob Ferrari

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