Jun. 19, 2014, 4:22 PM
- With cloud competition continuing to take a toll, Oracle's (ORCL) new software license revenue was flat Y/Y in FQ4 at $3.77B. Cloud app (SaaS) and app platform (PaaS) revenue rose 25% to $322M, and cloud infrastructure (IaaS) revenue 13% to $128M.
- Altogether, new license/cloud revenue rose 2% Y/Y to $4.22B. Oracle had guided for 0%-10% new license/cloud subscription growth.
- License update/product support revenue (stems from existing deals, relatively stable) rose 7% to $4.7B after growing 5% in FQ3. Hardware product sales +2% to $870M, near the low end of a 0%-10% guidance range. Hardware support +2% to $596M.
- $2B was spent on buybacks, even with FQ3 and boosting EPS. GAAP opex +8% Y/Y - sales/marketing +6%, R&D +7%.
- CC at 5PM ET, guidance will be provided. FQ4 results, PR.
Jun. 19, 2014, 4:05 PM
Jun. 18, 2014, 5:35 PM
Jun. 17, 2014, 12:05 PM
- Bloomberg reports Oracle (ORCL +0.9%) is close to buying leading point-of-sale hardware/software vendor Micros (MCRS +17.6%) for ~$5B.
- Micros has soared on the report; its market cap is currently at $5.05B. Peers NCR (NCR +3.4%), VeriFone (PAY +2.2%), and PAR Technology (PAR +4.6%) are also up. Oracle has ticked higher.
- If the report holds, Oracle will be paying ~24x FY15E (ends June '15) EPS. Micros has a long list of retail/hospitality industry clients that Oracle could offer integrated CRM hardware/software solutions to.
- IBM and SAP have each shown an interest in growing software sales to retailers. However, Big Blue sold its POS hardware business to Toshiba in 2012.
Jun. 10, 2014, 6:42 PM
- The in-memory version of Oracle's (ORCL) flagship 12c database, first detailed last September, has officially launched. Oracle continues to promise major gains in query speeds and transaction-processing rates relative to a standard database, as well as easy integration with both regular Oracle databases and 3rd-party apps.
- The launch is aimed squarely at SAP's Hana in-memory database, which saw its sales rise 61% last year to €633M ($855M) and has developed a strong ecosystem.
- As one might expect, Oracle argues integration with standard 12cand mature database feature set give it an edge - Larry Ellison claims data can be moved in-memory "within minutes." Ellison adds 12c in-memory is only meant to handle active data; all other data is left on cheaper flash memory or hard drives.
- In April, Microsoft updated its SQL Server database (has gained share against Oracle in recent years) to include in-memory features.
May 30, 2014, 6:41 PM
- IDC estimates global server sales fell 2.2% Y/Y in Q1, a slightly smaller decline than the 4.4% drop seen in Q4. Gartner, however, puts the decline at 4.1%.
- The embrace of white-label hardware by Web giants continues taking a heavy toll: IDC thinks white-label sales, which it calls ODM Direct, grew 75% Y/Y (up from Q4's 47% clip) and made up 7.3% of industry revenue, up from 6.4% in Q4 and 4.1% a year ago.
- IDC estimates market leader H-P (HPQ) saw its share hold steady at 26.5%, after having grown (at IBM's expense) 260 bps Y/Y in Q4. #2 IBM, whose hardware sales have been battered, saw its share fall 600 bps Y/Y to 19.1%.
- #3 Dell's share slipped 20 bps to 18%, while #4 Cisco (CSCO), which just reported a 29% Y/Y April quarter sales jump for its UCS server segment, saw its share rise 170 bps to 5.7%. #5 Oracle (ORCL), whose server sales are finally stabilizing thanks to engineered systems growth, rose 20 bps to 4.9%.
- Sales of x86 servers, over 90% of which contain Intel (INTC) CPUs, rose 4.9% after growing 7.8% in Q4. Non-x86 server sales tumbled 25.2%, and now make up just 17.9% of industry revenue.
- Cisco now has an estimated 24.4% of the blade server market, behind only H-P's 43.7%.
May 16, 2014, 6:41 PM
- Oracle (ORCL) is buying GreenBytes, a developer of software that optimizes the storage performance/efficiency of PC virtualization solutions (allows PC resources to be hosted on/managed by a server). Terms are undisclosed.
- Oracle says it plans to integrate GreenBytes' technology with its ZFS storage appliances (part of its engineered systems lineup). As it is, GreenBytes' software supports the open-source ZFS file system (obtained by Oracle through the Sun Microsystems deal).
- The Register's Chris Mellor observes GreenBytes' software includes a "highly rated" deduplication engine that could be used by Oracle's appliances. He speculates (given GreenBytes' past funding activity) Oracle may have paid ~$150M-$185M for the startup.
May 2, 2014, 7:36 AM| May 2, 2014, 7:36 AM | 1 Comment
Apr. 30, 2014, 3:52 PM
- "Oracle (ORCL +1.8%) has a significant advantage because it has a broader set of applications than its competitors," asserts Pac Crest's Brendan Barnicle after taking in the software giant's Tuesday Cloud Forum.
- Barnicle also liked Oracle's efforts to trumpet cloud customer wins, and thinks the company is adding new mid-market clients. His PT has been hiked to $45 from $40 on a belief Oracle can trade at 14x his FY15 (ends in May) EPS estimate of $3.28 (above a $3.19 consensus).
- Stifel has also upped its PT (from $45 from $43). While many faster-growing (and more richly-valued) cloud software rivals have been routed in March and April, Oracle is close to its 52-week high of $42 after underperforming the Nasdaq last year due to competitive/top-line worries.
Apr. 23, 2014, 3:58 PM
- Plenty of enterprise software names have underperformed on a down day for tech stocks after VMware (VMW -9.2%) provided soft bookings numbers (sub-10% Y/Y growth in the Americas, EMEA, and Asia-Pac), and blamed it on delays in signing major enterprise licensing deals (ELAs) as it talks with clients about more expansive agreements.
- VMware rivals Oracle (ORCL -1.6%), Citrix (CTXS -2.8%), and Red Hat (RHT -1.7%) are among the decliners. Others: CRM -2.5%. WDAY -5.6%. SPLK -6.3%. VEEV -4.3%. NOW -4.2%. TIBX -2.9%. INFA -2.2%. QLIK -3.2%.
- Nomura (Buy) observes that while VMware reported 18% Y/Y billings growth, underlying growth may have been in the single digits after accounting for the AirWatch deal and other adjustments. Nonetheless, it thinks ELA weakness might be a seasonal issue that will correct in Q2.
- Is competition taking a toll? In spite of the soft bookings figures, VMware managed to report strong licensing activity for products other than its core vSphere server virtualization platform, and noted on its CC (transcript) solutions other than standalone vSphere made up over 45% of license bookings (up from 30%+ a year ago).
- Microsoft's Hyper-V has been gradually eating into vSphere's market dominance. Other cheaper alternatives such as the open-source Xen (backed by Citrix) and KVM have also been gaining ground.
Apr. 14, 2014, 7:07 PM
- An April Barclays survey of 100 U.S. and European CIOs found 46% expecting their company's IT spending to rise in 1H14, 20% expecting it to drop, and 34% expecting no change. Those figures compare with September survey levels of 43%, 27%, and 30%.
- Moreover, IT spending growth is seen accelerating in 2H in both the U.S. and Europe. Barclays thinks larger budgets, macro stabilization, and a need for equipment refreshes (due to high utilization rates) could be helping out.
- At the same time, the firm cautions the spending growth is uneven: Software, networking, security, and cloud services demand is healthy, but servers, storage, and IT services remain soft. Interest in the concept of a software-defined data center is gaining traction, but big data (hyped considerably last year) is losing it for now.
- Gartner has forecast IT spending will rise 3.2% this year to $3.77T after growing just 0.4% in 2013. Enterprise software (+6.9% to $320B) is expected to lead the way.
- Barclays thinks its survey bodes well for H-P (HPQ), Juniper (JNPR), F5 (FFIV), Aruba (ARUN), Ingram Micro (IM), and CDW, each of which is rated Overweight.
- Others that might take heart in the survey results: CSCO, ORCL, SAP, CA, SWI, VMW, CHKP, BRCD, ARW, AVT
Apr. 11, 2014, 5:37 PM
Mar. 27, 2014, 3:45 AM
- CEO salaries at companies that generate over $8B in revenues rose 4.1% to a median $9.8M in 2013 as shareholder activism kept a lid on pay, a WSJ-commissioned survey shows.
- While the increase was slightly greater than in 2012, it was well well under the median 25% shareholder return for the companies looked at.
- Clarence Otis of Darden Restaurants (DRI), which is a focus of investor activism, saw his pay drop 24% even as returns increased 4%, and while the compensation of Cisco's (CSCO) John Chambers jumped 49%, returns soared 65%. GameStop's (GME) Paul Raines enjoyed a 92% boost in his salary even though returns rose just 5.4%.
- Other relevant tickers: BBBY, ORCL, NKE, VIAB
Mar. 19, 2014, 2:30 PM
- Though Venezuelan forex issues and the ongoing shift to cloud subscriptions from up-front licenses pressured Oracle's (ORCL -0.4%) FQ3 results, the software giant's quarter was "solid across-the-board," thinks Stifel's Brad Reback (Buy), upping his PT to $43 from $40.
- Reback notes Oracle's cloud bookings rose 60% Y/Y (exceeding rev. growth of 24%), and that engineered systems now account for nearly a third of hardware product sales. He also thinks the company has addressed many of its recent sales execution issues.
- "Not great, but getting better" is how Nomura's Rick Sherlund (Buy) refers to the quarter. He's slightly raising his estimates, and sees Oracle posting 4% revenue growth and 8%-10% EPS growth in FY15 (ends May '15).
- Morgan Stanley's Keith Weiss (Equal-Weight) is less enthusiastic, arguing Oracle's 1% Y/Y software billings growth "against the easiest comps of the year brings into question the achievability of [FQ4] targets near-term, and competitive positioning longer-term." He adds Oracle needs to "consistently expand margins" to deliver sustainable 10% EPS growth.
- CC transcript, more on Oracle
Mar. 18, 2014, 5:45 PM
Mar. 18, 2014, 5:24 PM
- Oracle (ORCL) guides on its FQ3 CC for FQ4 revenue growth of 3%-7% and EPS of $0.92-$0.99, in-line with a consensus for 5.1% growth and EPS of $0.96.
- New software license/cloud subscription sales are expected to grow 0%-10% vs. 4% in FQ3. Hardware product sales are also expected to grow 0%-10%; FQ3 growth was 8%.
- Asia-Pac remains a weak spot for Oracle: Sales fell 6% Y/Y in FQ3 to $1.43B. But Americas sales rose 5% to $4.95B, and EMEA sales 6% to $2.92B.
- Excluding forex, cloud software subscription sales (boosted by acquisitions) rose 25% Y/Y, and engineered system sales rose 30%.
- Shares have slightly pared their AH losses.
- FQ3 results, details
Oracle Corporation develops, manufactures, markets, hosts and supports database and middleware software, application software, cloud infrastructure, hardware system including computer server, storage and networking products and related services.
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