Oracle F2Q07 (Qtr End 11/30/06) Earnings Call Transcript

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Oracle Corporation (NYSE:ORCL)

F2Q07 Earnings Call

December 18, 2006 5:00 pm ET


Krista Bessinger - Investor Relations

Safra A. Catz - Co-President, Chief Financial Officer, Director

Lawrence J. Ellison - Chief Executive Officer, Director

Charles E. Phillips - Co-President, Director


Heather Bellini - UBS

Adam Holt - JP Morgan

Jason Maynard - Credit Suisse

Brent Thill - Citigroup

Kirk Materne - Banc of America

Kash Rangan - Merrill Lynch

John DiFucci - Bear Stearns

Tim Klasell - Thomas Weisel Partners


Thank you so much for holding, ladies and gentlemen, and welcome to today’s Oracle Corporation Q2 earnings conference call. Just a reminder, today’s conference is being recorded.

At this time, I would like to introduce the Vice President of Investor Relations for Oracle, Krista Bessinger. Please go ahead, madam.

Krista Bessinger

Thank you, Operator. Good afternoon, everyone, and welcome to Oracle's second quarter fiscal year 2007 earnings conference call. This is Krista Bessinger, Vice President of Investor Relations. With me on this call are Oracle Chief Executive Officer, Larry Ellison; Oracle President, Charles Phillips; and Oracle President and Chief Financial Officer, Safra Catz.

As usual, our prepared remarks will be followed by Q&A. Before we begin, however, I would like to remind you that today’s discussion may include predictions, estimates or other information that might be considered forward-looking. While these forward-looking statements represent our current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this presentation. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events.

Throughout today’s discussion, we will attempt to present some important factors relating to our business that may affect our predictions. You should also review our most recent Form 10-K and Form 10-Q for a more complete discussion of these factors and other risks that may affect our future results or the market price of our stock.

A PDF copy of our press release and financial tables, which include a GAAP to non-GAAP reconciliation, can be viewed and downloaded on the Oracle investor relations website at

Thank you, and with that, I will turn the call over to Safra Catz for her opening comments.

Safra A. Catz

Thanks, Krista. Good afternoon, everyone, and thanks for joining us. I am going to focus on our non-GAAP results for Q2, because that is how you all cover us, and then I will review guidance for Q3 and turn the call over to Larry and Charles.

First, the top line. Total revenue growth came in at the high-end of our guidance, at $4.216 billion, up 24%. Total software revenue came in at the mid-point of guidance, at $3.267 billion, up 20%. New software license revenue came in at $1.2 billion, up about 14% year over year. We had expected to be at the high-end of our 15% to 20% new license range based on our strong pipeline. However, we ended the quarter a point below that range. Earnings came in right at the guidance number of $0.22.

As we have looked at the new license results, we believe it basically came down to execution on a number of deals that did not close in the quarter. These were not competitive losses either in technology or in apps, and these deals should close in Q3.

Our performance varied by geography significantly, with EMEA and LAD, Latin America, turning in strong performances, while North America and Asia-Pac came in lighter against tough comparisons.

We think that additional focus and better pipeline management should result in higher conversion rates and much better execution in the third quarter. Focus to us means reducing the time spent on internal meetings and non-core sales activities, leaving the field more time to work with customers and close deals.

Both North America and Asia-Pac have turned in steady results for the last three years and we expect both regions to return to solid performance in the second-half of the year.

Now let me take you through the numbers.

First, technology license revenues were up 9% year over year, with significant variation by geography. We grew 2% in the Americas, following 19% year over year in our Q1. In EMEA, we were up 21%, up from 12% year over year in Q1 and 5% up in APAC following 12% year over year in Q1.

Applications were $340 million, up 28% year over year. Apps license revenues grew 19% in the Americas, 35% in EMEA, and 58% in APAC. Application license revenue growth, excluding i-flex, Seibel, and Portal, was 268, up 1% year over year. Seibel contributed $59 million of license and i-flex contributed about $10 million.

Product update and support revenues was up 24% in Q2 on a non-GAAP basis at over $2 billion. The renewal rates of this very large recurring revenue stream remain extremely high, above 95%, as our customers continue to renew their contracts and as customers come back to Oracle after not renewing in previous years under a different ownership. Q2 license renewals revenue exceeded our internal forecast.

Q2 income from operations grew 20% to $1.6 billion, resulting in operating margins of 39%, down one point from the year-ago quarter because last year, and at the time I discussed and described it to you, there was a litigation expense accrual reversal in Q2, so net net, it is basically the same. We expect margins to improve for the year and that improvement will show up next quarter and in Q4.

We also grew EPS by 18% to $0.22 on a non-GAAP basis and we are now halfway through our five-year plan targeting EPS growth of 20% per year. For the first 2.5 years, we are comfortably ahead of that target.

In Q2, we bought back 54.5 million shares at an average price of $18.05, spending approximately $1 billion. We intend to continue buying back approximately $1 billion per quarter through the remainder of the fiscal year.

Operating cash flows for the trailing 12 months increased $1.1 billion to $4.6 billion, while free cash flow increased 32% year over year.

Okay, now to the guidance for Q3. New software license revenue is expected to be up 16% to 22% year over year, and pipelines are actually up very significantly, actually 35% sequentially, so we are optimistic we should do quite well.

Total revenue for Q3 is expected to be up 22% to 24% year over year on a non-GAAP basis. Total revenue on a GAAP basis is expected to be up 23% to 25%.

Non-GAAP net income growth for Q3 is expected to be 15% to 19%, with GAAP net income growth of 24% to 29%.

Non-GAAP EPS for the third quarter is expected to be $0.22 as compared to $0.19 last year. GAAP EPS for the third quarter is expected to be between $0.18 and $0.19, up from $0.14 last year.

This guidance assumes the annual effective income tax rate of 29.5%, up from 29% in Q3 last year.

If current exchange rates hold steady for the entire quarter, that will result in four to five points of positive currency impact in Q3, but as you know, currencies are likely to fluctuate and as a result, the currency impact in Q3 could be different than our guidance assumes.

Our Q3 GAAP guidance currently assumes stock comp expense of approximately $50 million, and we continue to expect stock comp to reduce diluted earnings per share in fiscal 2007 by $0.02 to $0.03.

With that, I will turn the call over to Larry for his comments.

Lawrence J. Ellison

Okay, thanks, Safra. We expect our new products to play an increasing role in our revenue growth going forward. We have a dual strategy for growth made up of innovation and acquisitions, and I am going to highlight one product from each area.

We have made a number of acquisitions in application vertical markets, and the first of those markets we entered via acquisition was retail. We have been playing and we were probably approximately even in North America with SAP when we entered that market. Our retail business has gotten stronger and stronger every quarter as we have completed operational integration between the retail sales organization and our own larger field sales organization. Retail this past quarter grew very, very rapidly but that is off a relatively small base.

Going forward, we think the retail business is going to be large enough in the second-half to actually move the needle, so we are very excited about the strong growth in our retail business, as evidenced I think with the pipeline. Safra mentioned that growing pipelines, sequential pipelines Q2 going to Q3, a portion of that are these new vertical businesses, especially the most mature of those, retail. Again, retail looks very, very strong going forward.

We had one very, very large deal that we were not able to recognize with Wal-Mart that we will be recognizing over the next three quarters. That deal is in excess of $10 million will be coming in over the next three quarters. But we are actually in a situation now where 8 out of 10 of the largest retailers in North America now use Oracle retail applications, where only one uses SAP, and that one is now also using Oracle retail software.

In what was a dead heat in the retail business when we adopted our acquisition strategy is now looking like a very strong win in North America. By the way Europe, where SAP of course is historically strong, we are doing almost as well in retail, except I would say with the conspicuous exception of Germany, where SAP is still dominant. But the rest of the continent, you will see Oracle retail software in first place. We are very excited about that.

We think the other acquisitions in telecommunications, in banking are also going to grow, as we work, as we integrate those operational and sales activities better with our very large field organization, getting them coverage and allowing them to close larger deals than they were able to do as independent companies, also true in utilities, our most recent acquisition.

We are surprised at how excited people are. Here we are coming from behind. Here SAP had a very clear and strong lead, and our acquisition of SPL has really put us back into the running in the retail business and we think we are going to be very competitive.

In summary, we are very happy with our vertical applications. The acquisition strategy, we think it is really beginning to produce and will move the needle in the second-half.

The other part of our dual strategy for growth includes product innovation. The most interesting new product I think that we have built in a few years is our secure enterprise search product. We think the paradigm for doing business, how people do their daily jobs is changing and is moving to a search paradigm.

If you look at our fusion applications, secure enterprise search is actually built into our fusion applications. This is a database technology that allows a user basically to issue a single word command, a single search and look through not only publicly available files like local websites or global websites, but also search e-mails, secure storage systems, file servers, even applications databases, being able to look at accounts payable and accounts receivable information, presentations that were done with PowerPoint, reviewing their calendar. If I was going to type in GE, General Electric, our largest commercial customer, I would find all of the entries regarding GE that I am allowed to see. I would not be able to look into other people’s e-mail systems, but I would be able to look into my e-mail system. I would be able to look into invoices, into service requests, into presentations we gave GE, every meeting I had with GE over the time period that I specified in my search.

We think this is a very important new area. We think there is a significant revenue contribution for secure enterprise search. We are coming with 13 new connectors with secure enterprise search to new data sources, so again, we can search just about everything. All of your data, not just what is publicly available but also what is secure and private. We think that is a very big deal. It is not only going to be a revenue contributor but a significant differentiator for us in technology going forward.

You may have noticed that IBM and Yahoo! had an announcement in the search area, but again, we think we do the security job much better than they do. Again, theirs is called enterprise search. Ours is called secure enterprise search for a reason. We are very pleased about the innovation in that area, how that differentiates us and again how it allows us to expand our database and technology sales.

I am going to turn it over to Charles who will go into, you know, much more detail about specific deals and what is going on in the field.

Charles E. Phillips

Thanks, Larry. I just want to mention some of our large wins in the quarter, some of the key customers, who we are competing against and why we are winning, and then comment on some of the second-half product flow that would help our results in the second-half.

So let’s start with database, some of the key wins there. Some of the big wins were First Data Corporation. That was actually as Centech, but it was mostly technology. Wachovia Corporation is standardizing their entire infrastructure on the Oracle database. We won the largest bank in Spain, who is using our database for content management to reduce paper-based operations. In the Punjab National Bank, that is really an expansion, concurrent users going from 13,000 to 20,000, including partitioning.

Other key customers, Banc of America, Fidelity Investments, NTT Comware, all big database wins.

Moving on to middleware, we had some good wins there as well, of course. Korea Telecom, for instance. They bought the communications and mobility server to roll out voice-over IP. That was a win over BEA and IBM. AXA Equitable asset management for their extranet. T-Mobile is using the fusion middleware integration platform to connect other ERP products to a line of business applications, and then Toshiba is using our identity management product, and that is important because it is our first big win for identity management in Japan. HP selected our SOA platform to orchestrate orders across 12 different sales channels, and that was a big win over BEA, despite the fact that HP already owns BEA licenses. We also beat webMethods and SAP in that deal. Xerox, they are using the Oracle SOA footprint in the U.S. and in Europe. That was a win over SAP. Philadelphia Housing Authority, they are using our business process automation suite to model processes across the entire organization.

In our business intelligence area, that area is really on fire for us. If you recall, we bought the Seibel analytics product, and that has become our base platform. In the quarter, U.S. Army Logistics, they have been using SAP, or rolling it out for five years. They will continue to roll it out. They switched to Oracle for readiness reporting, however, as the key BI application for the army.

Fannie Mae, a leader in student loans, as you know, they had previously been using our business objects. They had standardized, replacing them in that account. Life Fitness, another displacement of [Boche], and then Morgan Stanley, a win over Microsoft for sales analytics.

Moving on to the applications area, some key wins in the quarter. At NASA, they are replacing a lot of custom applications. Petroplus, an SAP displacement in the energy area, network of plans. Longtime customer, but buying more to rationalize their IT investment and standardize on Oracle everywhere.

We also had some good wins in some of the newer areas of ERP where we have made acquisitions. For instance, G-Log, which is the transportation management product we bought that is on demand. Toyota motor sales is using that to replace an internal legacy system.

In the quarter, for Demantra, demand planning product we bought, we displaced i2 and Logility at Emerson. We displaced i2 at Cisco and we beat i2 and Logility and what [inaudible] at Electronic Arts. Several other wins for Demantra. That product is hot right now as well.

Moving on to i-flex, we have had a good win at the Central Bank of Africa, and that was an integration between FLEXCUBE and EBS, so taking large parts of the product line. People’s Bank in Connecticut, an important U.S. win as we start to expand into the U.S. with that product.

For portal for communications billing, a big win at SunRocket, an emerging IP player -- complete replacement of their legacy reading and billing system, and then Vodafone and Orange Poland, that was a win against Amdocs.

So if we look forward and look at some of the notable CRM on-demand wins, that is an area also we have been doing probably better than people expect. Here are some of the customers that we won this quarter in CRM on-demand against sales force: Banc of America, Visa U.S., U.S. Oncology, HP, EchoStar, ANZ Banking Group.

We also had some CRM on-demand go live, so we are not just winning them. We are taking customers live: Global Pharmaceutical, J&J Pharmaceutical, GE Healthcare, McKesson Specialty, Equifax, and Honeywell.

Just an update on a couple of other announcements you might be interested in. Obviously we made a big announcement at Open World around Unbreakable Linux, our support offering. In the first 30 days, we had 9,000 downloads of Unbreakable Linux from our website and hundreds of customers connecting their servers to our network.

Also, related to that, if you look at our Oracle Technology Network, which is our developer community, this quarter we surpassed 5 million members, 30% growth year over year. Many products growing faster than that.

For the second-half, I wanted to talk about some of the new products that are coming, because I think they are important. On the database side, some of the key releases are Oracle Audit Vault, which we have talked about before, several management packs for key areas of the product line, and of course now we have Stellent and content management. That brings 4,000 customers to cross-sell and up-sell to.

In the area of middleware, Oracle business intelligence applications, we have 10g release 3 shipping, and new products in the form of Oracle Communications and the mobility server, and Oracle Web Center Suite.

We have many applications shipping in the quarter -- so many that we are having an event in New York on January 31st. We are announcing five new releases of our ERP suite across six continents over 24 hours, an ongoing product announcement, and they are the E-Business Suite Version 12, Seibel Version 8, PeopleSoft ACM 9, JD Edwards Enterprise 18.12, and JD Edwards 89.1. There will be local events that follow after that, if you are interested.

We also have a new release of CRM on-demand coming, Oracle retail version 12.1, Oracle Communications Billing version 7, and Oracle Tax Management for the public sector version 2.2. A lot of the integrations we have been talking about, for instance, Seibel to Portal to retail to i-flex, are shipping in the second-half of the year.

Lastly, just commenting on pipeline, our pipeline growth continues to look solid, as Safra mentioned. Getting to the high-end of our guidance only requires a modest conversion rate. We could achieve the high-end of that range with a conversion rate that is lower than what we realized in the last three fiscal years for Q3.

The incremental focus Safra mentioned means less time spent on non-deal activities, which should result in increased productivity per rep. We normally have the bulk of our training, planning, organizing and recruiting activities in the first-half of the year.

With that, let me open up for questions, or turn it over to Safra.

Safra A. Catz

Great, thank you, Charles. With that, we have time for some questions. We would like to first just limit your questions to one question with a follow-up. Operator, can we have the first question, please? Operator?

Question-and-Answer Session


(Operator Instructions)

We will go first to Heather Bellini at UBS.

Heather Bellini - UBS

Great, thank you. My question was around database performance in the U.S. If you could just walk us through what happened in the quarter. Also, in your guidance, I know Charles commented on this just a moment ago, but are you expecting an up-tick in closed rates for the February quarter versus what you just did in order to, when you are saying that you could hit the high-end of the range? Thank you.

Charles E. Phillips

As I mentioned, we have a very conservative assumption on the closed rate. We could be at the low-end of the range on closed rates and still be at the high-end of the range on guidance. That is how big the pipeline is.


We will go next now to Adam Holt at JP Morgan.

Adam Holt - JP Morgan

Good afternoon. Just a follow-up on the database business, as we sort of take a step back and think about the growth drivers there. How should we be thinking about late cycle 10g buying as we get closer to the 11 release? Could you update us on where you think you are, relative to penetration? Maybe talk a little bit about options in the quarter. Thanks.

Lawrence J. Ellison

Again, when someone buys a database, they get the rights for the current version and the next version. We have never seen people waiting to buy the next version of the database. It has never had any impact on selling whatsoever.

In fact, typically they are interested in what is in the next version, and most of our customers -- again, most of our customers are existing customers, so they look and see what is in the next version, but as they require more database capacity, even if 11 was already available, they often will install on 110 for a while. So the availability of 11 and the date of the availability of 11 does not have any impact on sales that we have ever seen historically.

Safra A. Catz

As for options, et cetera, there is nothing particularly going on in the options number generally. The year-to-date number is not that different from the quarter number. I think what we are going to see in the second-half is that both the database and all the options, as well as middleware, will all pick up in the second-half. We are going to be a little more back-end loaded this year.


We will move next now to Jason Maynard at Credit Suisse.

Jason Maynard - Credit Suisse

I would just like to talk a little bit about applications. If we just look out past maybe the next quarter or so, how do you think about the longer term growth rate? Specifically, is this a business that you think can grow in maybe the low double-digits or maybe in the mid-teens, or something like that, on a multi-year basis? Is that growth going to come out of some of the vertical applications?

Lawrence J. Ellison

I think the vertical applications are much less penetrative than ERP, so again, our strategy for growing our application business rapidly is to move beyond just ERP. We have made a very strong move into CRM, where we have a leadership position in CRM. We think we can extend that leadership position. We think CRM is much less penetrated than ERP and still less penetrated are the specific industry verticals, like retail, merchandising, or pricing. Telecom billing, as the telecom companies move into a variety of new businesses, they have to install new billing systems as they roll out those new services. We see that as a growing business.

Even in areas like government, in the government sector, as they go ahead and modernize their systems, we think some of those specific government verticals are going to grow faster than the ERP portion part of the puzzle, which while not saturated, is fairly mature.


We will go next now to Brent Thill at Citigroup.

Brent Thill - Citigroup

Thanks. You seem particularly confident that the database business will snap back in Q3. have you already seen deals that have closed so far this quarter? Just back to Jason’s questions on applications, how should we think about overall database growth over the next year? Is it a 10% growth market or above that?

Lawrence J. Ellison

We think again the technology market, a combination of database and middleware, yes, it is going to be in the double-digits. Where core database might be in single digits, the combination of the options, secure enterprise search, all the different middleware identity management, our suite, a variety of things, that that technology business we think is definitely going to be growing in double digits, always has.


We will go next now to Kirk Materne at Banc of America.

Kirk Materne - Banc of America

Thanks very much. Safra, you noted that you are expecting some margin expansion in the back-half of the year. Is this generally just revenue leverage that you are getting off the top line as that accelerates in the back-half of the year? Are there any cost measures that you are going to see some benefits from as well?

Safra A. Catz

We usually ramp up spending, and our spending is pretty even throughout the year, other than commission expenses. What happens is a lot of the revenue obviously comes in at the second-half. We spent a lot in building sales coverage and we expect that the revenue is going to come and meet that and improve our margins, give us a lot more leverage as the revenue comes in.


We will go next now to Kash Rangan at Merrill Lynch.

Kash Rangan - Merrill Lynch

Thank you very much. I have two questions. One for you, Larry -- execution versus economy, any thoughts there? How much of it was perhaps execution, how much of it was economy? I am asking the economy question only because I remember just six years back on your November 2000 quarter conference call, you rightly called the turn in IT spending. I think you were one of the first to say that you saw a slowdown. Maybe it is too harsh to say that exactly now, but I am just wondering, given your perspective, what is your take on broader IT spending trends that you have witnessed on the part of customers? How much of it was really economy versus execution?

I guess a question for Charles, if I could. Applications, as Safra pointed out, if you stripped out the Seibel, i-flex portal acquisitions, came in at 1%. How do you think about the business? I think you mentioned growth rate expectations, but should we think about your forecast being contingent upon a couple of very large deals that could help you get back to those double-digit growth rates that you have been able to put up the last couple of quarters? That is it, thanks.

Lawrence J. Ellison

As far as the economy is concerned, if it is the economy, I am afraid we did not see it that way. That is not our analysis. Our analysis really was on the execution side of things. We think those deals are going to be coming back in Q3 and maybe a few in Q4. Safra mentioned we are going to be a bit back-end loaded this year, like we were last year, by the way. Our business is shaped a little bit different than it has been historically, so we expect those deals to come in.

The pipeline growth has been unprecedented, a little large. I mean, a 35 -- you know, usually double the pipeline growth we normally see between Q2 and Q3.

Kash Rangan - Merrill Lynch

Why is it, Larry, the pipeline growth seems to be stupendous? What is causing that?

Lawrence J. Ellison

The correct answer is I am not sure, but I think it could be just the reshaping of our business. Some of our verticals, our CRM business might be a little bit -- some of the businesses we have acquired might be a little more second-half of the year, more back-end loaded than our traditional businesses, but the real answer is we do not know yet. We only have one data point here and it is hard to fully understand.

I will let Charles answer the second question.

Charles E. Phillips

On the applications, I do not think it is tied to one or two big deals or a small number of big deals. We have a lot of things happening that should help us. A lot of the integrations we have been talking about start to show up in the second-half, and that is important to customers, and certainly demos, great, they start to get the idea of having the best-of-breed products for every function, but yet we are responsible for the integration, kind of a virtual suite. That is going to be a strong story in the second-half.

Mid-market is also opening up for us. IBM agreed last quarter to redistribute and sell more of our products on the applications market, having a dedicated sales team, so we are going to have more reach there as well.

Then we do have, I think as Safra mentioned, some growing backlog. A lot of the acquired companies in the industry areas we are recognizing either on implementation or on a ratable basis. As we reach steady state in that business, we can start to recognize more of the backlog as well, and just a lot of new product shipments, the five that I mentioned as well, that we are going to talk about in January.

We have a lot of things happening on the positive side from a product standpoint that should help.


We will go next now to John DiFucci at Bear Stearns.

John DiFucci - Bear Stearns

Just one question for Safra. Safra, maintenance was really strong, or what you call software license updates and product support, which implies that cash flow would be strong. I realize you do not, and I do not and we do not look at cash flow on a quarterly basis, or we do not entirely focus on it. We look more the trailing 12 months, which you do too, but in this quarter, it was less than even last year, about half of what we were looking for. I was just wondering if you could comment on that.

Safra A. Catz

I don’t know. I have to look at it. You are the first one to point this point out. There is nothing unusual going on with our cash flow, actually, so let me take a peak at what went down here.

I was just talking to my team. A couple of things, one is the things that would affect cash that do not necessarily show up as clearly through here, obviously acquisition and taxes, both of which were impacted. We had a number of very large facility buy-outs, as we bought out both our Seibel real estate portfolio, trying to buy that away, to reduce our liability going forward. We had a number of large tax payments also. There were things of that nature that impacted it.

John DiFucci - Bear Stearns

About how much were those facility buy-outs?

Safra A. Catz

You know what, I would have to go look. It is probably not worth -- you should probably check with Krista. It is probably not worth the 300 people going through that.


We will take our last question of the day from Mr. Tim Klasell at Thomas Weisel.

Tim Klasell - Thomas Weisel Partners

Yes, first question is your guidance on your conversion rate seems to be very low out there, and if it is not the economy, is it potentially the size of the deals? Are you seeing in your pipeline, as it is growing so quickly, is it the size of the deal in your pipeline?

Safra A. Catz

You know what, actually we discussed it quite in-depth here, and we are just trying to be conservative with it, to be direct with you. The pipelines are extremely high, as we have all commented. They are twice as high from a sequential growth quarter over quarter, so we are going to take a little bit more conservative approach this quarter on them.

Tim Klasell - Thomas Weisel Partners

Okay, good, and then real quickly, if APAC and North America were obviously a little bit weak, and Europe did quite well, what were the procedures or what were you doing different in Europe versus the other two regions that cause the dichotomy there?

Safra A. Catz

You know what, it isn’t really what was different other than a couple of things. Both, for Asia-Pac, I will just give you an example. We are expanding very, very rapidly in a number of countries, including China, where we have opened nearly a dozen more offices. As you are assimilating large groups of folks, you sometimes you are not quite watching carefully the forecast and making sure things are done.

In North America, we hired up a lot of folks and we are just really putting them into productivity levels. The acquisitions brought in a lot of new folks and we hired up in the higher growth areas, so it impacted that. North America has done really astoundingly well for a number of quarters in a row, and we expect it to return right back in the next quarter.


At this time, I would like to turn the conference back over to our presenters for any closing or additional comments.

Krista Bessinger

Great, thank you everyone for participating in today’s call. A telephone replay will be available for 24 hours and that replay number is 719-457-0820, with the passcode 1647712. You can also access the webcast replay on the Oracle investor relations website. That replay will be available through the close of market on December 26th.

Thank you and with that, I would like to turn it back to the operator to close.


Again, that will conclude our conference call for the day. We thank you all for joining us and wish you all a great remainder of your day. Goodbye.

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