Co-CEO Safra Catz said Oracle delivered non-GAAP operating margins of 47% as it downsized its hardware business and sold cloud applications with better margins. "Our high-margin Fusion and NetSuite cloud applications businesses are growing rapidly, while we downsize our low-margin legacy hardware business. The net result of this shift away from commodity hardware to cloud applications was a Q4 non-GAAP operating margin of 47%, the highest we've seen in five years," said Catz.
Meanwhile, Oracle said it added 5,000 new Autonomous Database trials in the fourth quarter. Oracle ended its fiscal year with about $38 billion in cash and marketable securities.
On a conference call, Catz said:
While cloud license and on-premise license revenues were $2.5 billion, up 15%. In particular, technology license growth was up 19%, making it abundantly clear that customers are investing in the Oracle platform. The key database options necessary to run the Oracle Autonomous Database service grew 21%. I cannot stress enough the stability and growth of our base of customers quarter-after-quarter. Our customers are maintaining and expanding their Oracle environment. And in our BYOL, bring your own license model, they have the portability to use their licenses on-premise, in the cloud or via hybrid environment.
Co-CEO Mark Hurd said ERP and HCM annualized software as a service revenue is about $3 billion. Hurd added that Autonomous Database is keeping customers and adding new ones to the company.
As for the outlook, Catz said revenue in the first quarter will grow between 1% and 3% in constant currency and 1% given currency headwinds. Non-GAAP earnings in the first quarter are expected to land between 80 cents a share and 82 cents a share. Constant currency non-GAAP first quarter earnings will be between 81 cents a share and 83 cents a share in constant currency.
Wall Street was looking for first quarter revenue of $9.36 billion, up 1.75% from a year ago, with non-GAAP earnings of 80 cents a share. Analysts are expecting Oracle to deliver fiscal 2020 revenue of $40.17 billion.
Catz said fiscal 2020 growth will improve in constant currency and earnings per share will post double digit growth.
For fiscal 2019, Oracle reported net income of $11.1 billion, or $2.97 a share, on revenue of $39.5 billion.