The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: John DiFucci - Guggenheim Securities LLC - Analyst
: Listen, even I was blown away by what this looks like going forward. This question is purposely open ended.
Larry and Safra, Oracle's become the de facto standard for AI training workloads. You make money at it and we have a lot of faith in
that. But clearly, there's more here than just AI train.
I know it's a big part of it. You talked about it. But can you talk about what else -- a little more detail about what else is driving these
pretty amazing forecasts?
Question: John DiFucci - Guggenheim Securities LLC - Analyst
: I was just going to say hats off to both of you. I have been doing this for a really long time. I tell my old team pay attention to this,
even those that are not working at Oracle, because this is a career event happening right now.
It looks -- it's just amazing. I'm just really happy for you and congrats on this. It's amazing. Keep doing it.
Question: John DiFucci - Guggenheim Securities LLC - Analyst
: Thank you, Larry. Thank you, Safra.
Question: Brad Zelnick - Deutsche Bank AG - Analyst
: Great. Thanks very much.
I think we're all in shock in a very, very good way. Larry, there's no better evidence of a seismic shift happening in computing than
these results that you just put up. Oracle has a near 50-year track record of navigating transitions and coming out on top.
But as we think about enterprise applications, investors are fairly pessimistic these days. I'd love to hear your perspective. Where do
you see this all going for the industry? Where does the market share go to the companies that don't have the database, don't have
the advantages that you have all the way down to the silicon? Is this maybe an extension event?
Be curious to hear what you think.
Question: Brad Zelnick - Deutsche Bank AG - Analyst
: I look forward to AI world, Larry. Thank you.
It's an amazing day for Oracle. It's a remarkable day for the industry. Thanks again. Congrats.
Question: Derrick Wood - Cowen and Company LLC - Analyst
: Great. I'll echo my congratulations on this momentous quarter.
Safra, the fact that you delivered over $300 billion of new RPO in Q1, just really amazing to see. But it's going to require a lot of
infrastructure build out.
So could you provide a bit more context on how much CapEx and operational cost structure will be needed to fully service these
contracts? How we should think about the ramp of these costs, relative to the ramp in revenue over the next few years and generally,
how investors should be thinking about the ROI on the spend?
Question: Derrick Wood - Cowen and Company LLC - Analyst
: Thank you, Safra.
Question: Mark Moerdler - Sanford C Bernstein & Co LLC - Analyst
: Thank you very much, Larry and Safra; and frankly, Team Oracle. Amazing. Congratulations.
I'd like to focus on the AI training business you've been winning. Could you please explain to us how Oracle can create enough of a
differentiated moat to assure this business does not get commoditized? How do you continue to drive strong earnings and free cash
flow from the training business, even if training slows? I think people really need to understand that.
Question: Alex Zukin - Wolfe Research LLC - Analyst
: I really appreciate you squeezing me in. I originally was going to ask you if the new Oracle AI database really opens up the general
enterprise inferencing market.
Based on your script, it sounds like the answer to that question is h*** yes. So my follow-up question would be: how do you see that
pacing happening over the course of the next few years? How soon after the introduction of the Oracle AI database would you
expect your enterprise customers, your sophisticated customers to really be open to interrogating their enterprise data in this
fashion? How does the current supply-constrained environment stand in the way of that demand? Or is it solving as we speak?
Question: Alex Zukin - Wolfe Research LLC - Analyst
: It sounds like very high-margin AI revenue guys. Congratulations.
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