Oracle Q2 Post Mortem – Our Thoughts
Oracle’s Q2 results were largely in line with expectations, with the notable point being that license revenue growth for the quarter of 14% year to year came in slightly below the 15% to 20% guidance. Likewise the geographic mix was a bit skewed with comparatively modest growth from the Americas and Asia Pacific regions. The ever so slight miss on license revenues was attributed to execution issues and not due to any change in the IT spending climate.
Management continues to be very, very positive with regard to the company’s prospects as evidenced by Q3 guidance (16% to 22% new license growth year to year) and the comments on pipeline growth (up 35% sequentially). In the effort to further underscore the confidence in guidance and that it is inherently conservative, management indicated that even if Oracle’s pipeline conversion rate is at the low end of the historical range of the past few years, that Oracle could still come in at the high end of the guidance range.
The conference call contained the typical discussions regarding Oracle’s growth initiatives based on acquisition and product innovation, with a litany of specific examples of success from each of these efforts.
Although the shares have sagged post the results, we remain extremely positive with respect to Oracle’s capacity for growth. In particular, management’s comments on the pipeline are consistent with the inputs we’ve gotten. Likewise Oracle’s ongoing stock buyback program of $1 billion per quarter is further confirmation of management’s confidence in the future and the value of the shares. Bottom line we are not disturbed by the nuances of the quarter’s performance since we see the results as a testament to the company’s broad strength in that despite some last minute deal slippages in the Americas, Oracle’s performance was not notably marred.
Legal Disclaimer Nothing herein constitutes an offer or solicitation to buy any security. Readers are advised to review their own financial situation, risk tolerance, and investment objectives as to any investment. Information provided here is based, in part, from sources believed to be accurate and reliable, although no representations or guarantees can be provided as to its accuracy or completeness.Blue Atlas Management, LLC is our official business entity for consulting related work. In addition, we also have a website for those of you who are interested in learning more a little more about our services http://www.blueatlasmanagement.com/. Please feel free to contact us at jmendelson@blueatlasmanagement.com, with any comments or questions.
Management continues to be very, very positive with regard to the company’s prospects as evidenced by Q3 guidance (16% to 22% new license growth year to year) and the comments on pipeline growth (up 35% sequentially). In the effort to further underscore the confidence in guidance and that it is inherently conservative, management indicated that even if Oracle’s pipeline conversion rate is at the low end of the historical range of the past few years, that Oracle could still come in at the high end of the guidance range.
The conference call contained the typical discussions regarding Oracle’s growth initiatives based on acquisition and product innovation, with a litany of specific examples of success from each of these efforts.
Although the shares have sagged post the results, we remain extremely positive with respect to Oracle’s capacity for growth. In particular, management’s comments on the pipeline are consistent with the inputs we’ve gotten. Likewise Oracle’s ongoing stock buyback program of $1 billion per quarter is further confirmation of management’s confidence in the future and the value of the shares. Bottom line we are not disturbed by the nuances of the quarter’s performance since we see the results as a testament to the company’s broad strength in that despite some last minute deal slippages in the Americas, Oracle’s performance was not notably marred.
Legal Disclaimer Nothing herein constitutes an offer or solicitation to buy any security. Readers are advised to review their own financial situation, risk tolerance, and investment objectives as to any investment. Information provided here is based, in part, from sources believed to be accurate and reliable, although no representations or guarantees can be provided as to its accuracy or completeness.Blue Atlas Management, LLC is our official business entity for consulting related work. In addition, we also have a website for those of you who are interested in learning more a little more about our services http://www.blueatlasmanagement.com/. Please feel free to contact us at jmendelson@blueatlasmanagement.com, with any comments or questions.
posted by jcm at 5:31 AM
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