© 2024 Alpha Spread Limited. All Rights Reserved.
www.alphaspread.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on www.alphaspread.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. In no event shall Alpha Spread Limited be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on www.alphaspread.com, or relating to the use of, or inability to use, www.alphaspread.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance.
You don't have any saved screeners yet
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Welcome to Oracle’s Second Quarter 2019 Earnings Conference Call. Now, I’d like to turn today’s call over to Ken Bond, Senior Vice President.
Thank you, Victoria. Good afternoon, everyone. And welcome to Oracle’s Second Quarter Fiscal Year 2019 Earnings Conference Call. A copy of the press release and financial tables, which includes a GAAP to non-GAAP reconciliation and other supplemental financial information can be viewed and downloaded from our Investor Relations Web site.
On the call today are Chairman and Chief Technology Officer, Larry Ellison and CEOs, Safra Catz and Mark Hurd. As a reminder, today’s discussion will include forward-looking statements, including predictions, expectations, estimates or other information that might be considered forward-looking. Throughout today’s discussion, we will present some important factors relating to our business, which may potentially affect those forward-looking statements. These forward-looking statements are also subject to risks and uncertainties that may cause actual results to differ materially from statements made today.
As a result, we caution you against placing undue reliance on these forward-looking statements and we encourage you to review our most recent reports, including our 10-K and 10-Q and any applicable amendments for a complete discussion of these factors and any other risks that may affect our future results or the market price of our stock. And finally, we are not obligating ourselves to revise our results or publicly release any revision to these forward-looking statements in light of new information or future events.
Before taking questions, we’ll begin with a few prepared remarks. And with that, I’d like to turn the call over to Safra.
Thanks, Ken. Good afternoon, everyone. I’ll first go over Q2 before moving on to guidance. I’ll then turn the call over to Mark and then Larry for their comments.
Let me start by summarizing that Q2 was another solid quarter. Constant currency revenue growth was slightly above the high end of my guidance, and constant currency earnings per share was $0.02 above the high end of my guidance. As in prior quarters, I’ll review our non-GAAP results using constant dollar growth rates unless I state otherwise.
Total cloud services and license support revenues for the quarter were $6.6 billion, up 5% in constant currency. This accounted for nearly 70% of the total company revenues and most of it is recurring revenues. GAAP applications total revenues were $2.8 billion, up 7% and GAAP platform and infrastructure total revenues were $5 billion, up 1%. Mark will go over more detailed revenue and bookings numbers in a moment.
The gross margins for cloud services and license support was 86%, essentially the same as last year with continuing improvement in SaaS gross margins, stability in software support gross margins and continued investments in Oracle cloud infrastructure. As we continue to scale and grow our cloud business, I expect our gross margins will ultimately go higher. Total revenues for the quarter were $9.6 billion, up 2% from last year.
Non-GAAP operating income was $4.1 billion unchanged from last year and the operating margin was 43%, the same as last year. The non-GAAP tax rate for the quarter was 18.6%, slightly below our base rate of 20% and non-GAAP EPS was $0.80, and up 19% in constant currency. The GAAP tax rate was 15.9% and GAAP EPS was $0.61, up 22% in constant currency.
Operating cash flow over the last four quarters was $15.2 billion. Q2 operating cash flow was in fact negatively impacted by our first installment payment over $600 million on the one-time transition tax related to the U.S. Tax Cuts and Jobs Act of 2017. Over the last four quarters, capital expenditures were $1.5 billion and free cash flow was $13.8 billion, up 10% in U.S. dollars. We now have more than $49 billion in cash and marketable securities.
The short term deferred revenue balance is $8.2 billion and that’s up 6% in constant currency. The remaining performance obligations or what we’ll refer to as contract backlog will be in the 10-Q and is now $30.1 billion, of which approximately 62% will be recognized as revenue over the next 12 months. We remain committed to returning value to shareholders through acquisitions, internal investments and the return of capital with stock repurchases and dividends. This quarter, we repurchased $203 million shares for a total of $10 billion. Over the last 12 months, we have repurchased 602 million shares and reduced the absolute shares outstanding by over 12%. The Board of Directors again declared a quarterly dividend of $0.19 per share.
Turning to currency, I expect the strengthening U.S. dollar will increase the currency headwind to 4% for Q3, and a $0.03 headwind to earnings per share. So for Q3, my guidance is total revenues are expected to grow 2% to 4% in constant currency. I continue to expect that second half revenue growth will be higher and we remain committed to delivering a higher constant currency growth rate for all of fiscal 2019 when compared to last fiscal year.
You may remember that last year's Q3 EPS included some onetime events, which I called out at the time which helped by about $0.03 last year. In addition, my EPS guidance assumes a base tax rate of 20%, which is nearly 4 points higher than last year, because last year's tax rate was a catch up quarter for the new tax law. Certainly, one-time tax events could cause actual tax rates for Q3 to vary from the base rate. But I expect that a normalizing for these one-time events, our tax rate will average around 20% for fiscal year 2019.
With all that for this quarter, non-GAAP EPS in constant currency is expected to grow between 7% to 9%, and be between $0.86 and $0.88 and non-GAAP EPS for Q3 in U.S. dollars is expected to grow between 3% to 5%, and be between $0.83 and $0.85. And while my double digit constant currency EPS growth guidance for fiscal year '19 has not been a specific number, I can tell you that internally I have in fact raised my fiscal year '19 constant currency EPS growth rate estimates.
And with that, I'll turn it over to Mark for his comments.
Thank you, Safra. Solid quarter for us from top to bottom; total revenue was up 2%, constant currency with cloud service and license support up 5% and of course EPS up 19%. It’s a seventh consecutive quarter we've reported double-digit EPS growth. Apps had a spectacular quarter with great momentum growing 7% for the overall ecosystem over $11 billion in trailing 12 month and 91% of that is now recurring revenue.
We continue to grow revenues faster than the market, and we have an enormous opportunity ahead of us, particularly ERP as well as HCM. To Safra's point about the numbers, let me give you some numbers about our SaaS business. Overall, ERP and HCM now have annualized SaaS revenue of $2.6 billion, up mid-20s percent. Fusion apps revenue growth was 34%; fusion ERP revenue growth was 44% organically; NetSuite ERP revenue growth 25%; vertical revenue and applications grew 35%; annualized revenue now up $800 million.
In terms of SaaS bookings, I want to try and give you some context. Now of course as I talked about booking, this did not show up in any way shape or form in our revenue. ERP and HCM's booking growth rate has accelerated about last four quarters and now was in the high-30s. In addition, we saw our largest movement of the installed base customers to ERP cloud. We're almost roughly 200 customers moving in the quarter, all that of course shows up in bookings and not revenue.
In addition, SaaS net bookings, let me try to say this carefully. SaaS net bookings which factor in our non-renewals were the highest ever in the Company's history for a non-Q4 and up in the high 30s percent. Our tech ecosystem GAAP -- tech ecosystem was $21 billion on a trailing 12 months basis and Q2 was up 1% growth with database new license and support revenues up low single digits. Larry is going to talk quite a bit more about autonomous database. We are seeing more than a thousand trial activations per month currently between data warehouse and transactional basis, and this number continues to ramp. Now, we also had our cloud and customer solution, which has been one of our exciting offerings, revenue up triple digits, booking up in the low 40 percentage.
Now, I'm going to mention the few customer names that I thought I would explain some of the wins in the quarter that are behind some of the apps numbers I described. In general, I'm going to talk about some back office wins and a few fold suites win. One win was at MGM. This is MGM Resorts, the hospitality company, ERP really our full suite, including supply chain that actually replaced a product called Infineum, which is part of Blizzard brands inside import. We had a very large win at a large -- at a distribution company whose name I can't mention, but it was a complete suite win ERP, HCM -- by the way, this is a theme I'm going to tell you about how will we win ERP. It is now increasingly that we connect HCM through that win. People want the same UI, user interface, the same workflow, et cetera. And so ERP has the tremendous effect on pulling HCM, HCM through.
Another exciting win we had was at Johnson Controls. Johnson Controls was again a sweet win where we sold them service cloud, both our service cloud and our field service solutions and really to one of their divisions also ERP in their Tyco division, very exciting win for us. Hormel food processor, great win for us. ERP, our full suite of ERP inclusive of HCM very exciting. A company called Securitas probably makes even performing security in many major facilities around the country, but again a full suite win there. Helzberg Diamonds, again a full suite win there as well. Indiana University Health Center, this is again another -- this actually was a Lawson, if you've heard of the Lawson product, we replaced there with ERP, EPM really a full suite in addition into HCM.
So, I won't go through all the color with all these, but let me just read out some more names for you just so you get some context for it; Littlewoods a retailer, Samsonite, Verifone, Department of the Environment in Australia Land and Water really significant win for us there; the European operations of Toyota, very significant win for us in ERP, Marvell Semiconductor; I'm going to run out of minutes here, Dana Corporation, very nice win for us, DHL in Italy, Gilead Sciences, Ithaca College, and I'm going to stop I know because it just keeps going, but this was, as I've told you, the biggest net bookings we've had in our history of non-Q4 and the stock buybacks by the way bookings statement and they're supported by these quality wins.
So, last thing I wanted to do was before I close is just talk to you about a survey that came out from IDC. And I've talked to IDC about it and I have to read this literally. So I have to read it to you in its entirety to make sure that I get the message that they want across. So I'm going to do it. Let me start with open quotes, this is from IDC. "In the SaaS view survey IDC released in October of 2018, were surveyed 276 HCM SaaS customers on their experience with SaaS HCM vendors, including Oracle, Workday and SAP Success Factors. Oracle SaaS HCM is the highest rated among the three vendors in most SCAP scoring categories, including vendor satisfaction, likelihood to recommend vendor to a colleague, data security, trusted brand, lower TCO, value for the price paid, ease-of-use, superior features functionality, ease of implementation, customer support service, product innovation and geographical reach." The reason I wanted to read that to you is instead of that coming from me and my opinion, this comes from an independent analyst community and I want to make sure I share that with you.
Let me just close to say it was a solid quarter again with 19% EPS growth and 10% free cash flow growth. The strength of our bookings growth along with climbing renewal rates gives me confidence that our cloud apps businesses is only, only going to strengthen from here. If I'm not being clear, this is perhaps the best apps quarter we've had just in terms of bookings, breadth of bookings across the portfolio and the visibility that gives us into the revenue backlog. Looking forward, we still expect full year revenue growth will be higher than last year and EPS will grow double digits for the year.
And with that, I’m going to turn it over to Larry for his comments.
Thank you, Mark. Oracle has two strategic products that will determine the future of our company, Cloud ERP and the Autonomous Database. Virtually every technology analyst organization agrees, Gartner, Forester, IDC and the rest. Please read the published reports, that Oracle has developed the world's most advanced ERP technology, featuring an easy-to-use voice interface, and machine learning based artificial intelligence to automate many formerly manual ERP processes.
But more than being simply the technology leader in ERP applications, the analyst also confirmed that Oracle has translated that technology leadership into market leadership in cloud ERP with nearly 6,000 Fusion ERP customers plus more than 16,000 NetSuite customers, and we’re adding about 1,000 new cloud ERP customers every quarter.
Technology analysts also believe that Oracle’s new Autonomous Database gives Oracle the largest technology lead we’ve ever enjoyed over our database competitors since we entered the database market almost four decades ago. As we pair our new Autonomous Database with our new generation two cloud infrastructure, we expect not only to hold on to our 50% database market share, we expect to increase it. That means millions of Oracle database will move to the Oracle Cloud. Those are the two strategic initiatives that we are focused. One, continue to expand our market leadership in cloud ERP, which should make us the world's largest cloud application company. And two, maintain our database technology leadership and migrate our 50% database market share to the Oracle Cloud. We’re optimistic about our ability to deliver on these two strategic initiatives and our ability to be the leader in these two key market segments.
With that, I’ll turn it back over to Safra.
Okay, so I think we’re ready for questions.
We’re ready for Q&A, Victoria.
[Operator Instructions] Our first question comes from the line of Mark Moerdler with Bernstein Research.
SaaS ERP is the largest growth driver within SaaS and, we believe within your total apps business, but there's so many moving parts that it is not obvious in the reported results. Can you give us a sense of when you expect that SaaS ERP will be large enough and growing fast enough to start to visibly improve year-over-year revenue growth first in SaaS and then in overall apps? And then as a quick follow-up, can you give us any color on the timing of conversions booked to revenue, has it improved or not? Thank you.
The answer to both questions is no. No, no, so first -- I was kidding. So, it's holiday seasons. I thought it was time for festive commentary. First, I think -- first of all, it is happening, so when you look at first and breaking it into pieces, the next week performance has been spectacular as this one piece of it. When we bought NetSuite, NetSuite was growing 15-ish percent and set this as color on our calls, their bookings starting if you went into Q3 of last year and Q4 was spectacular, Q1 was strong again. They had another very strong bookings quarters, again, in Q2 and their revenue growth has now gone to 25-ish percent in the quarter. So that is obviously significant for us in terms of their scale and now the improved growth rate.
I really have, I don’t want to say higher expectations, but I continue to have high expectations that they will continue that momentum that we see in increased growth rate. The Fusion growth rate in ERP is even higher than NetSuite. And I hope by the quality of the wins I described to you, you'll get a flavor for the popularity of that solution in our marketplace. So when we combine those two together, our target is that we could see hundreds, if not -- just I want to be careful way the line here, Mark. We can get into close to $1 billion worth of growth next year out of those two solutions. I'm not giving you the number I'm telling you that that opportunity for us in scale. But to add to it, the thing that I tried to make sure was clear on the wins we're describing is the pull when we sell ERP, the ability for us to pull other solutions with it is new and nothing but growing, particularly at this stage. Does that answer your question?
You also pointed me in the right direction.
Our next question comes from line of Brad Zelnick with Credit Suisse.
Larry, I think we all appreciate how sticky Oracle database is, even it stores some of the most valuable information in the world. But the competitive noise in the market just keeps getting louder and louder. What's your latest thinking on the competitive dynamics for database?
Well, there is a wonderful Gartner report that ranks the technology. They work all database technology, Oracle ranked with a huge number one lead by Gartner. A distant second is Microsoft. A distant third is IBM. And ridiculously distant for us is Amazon who is making all the noise. We think we have -- we have a huge technology leadership in database over Amazon. What Amazon did is they got their database. And by the way, Amazon Aurora is just my sequel Open Source, and Amazon Redshift is also just a borrowed Open Source system. These are very old systems that Amazon took Open Source databases and gave them an Amazon name and put them on the Amazon Cloud.
Now the beauty of what Amazon did is they put them on the Amazon cloud and they made them available on the cloud. They did that long before we made the Oracle database available on the cloud. But in terms of technology, there is no way that someone can move -- a normal person would move from an Oracle database to an Amazon database. It's just incredibly expensive and complicated and you've got to be willing to give up tons of reliability, tons of security, tons of performance to go ahead and do it. But we have a huge technology advantage.
Again, don’t believe me read the Gartner report. We've never had -- the Oracle autonomous database has the biggest technology lead we have ever had in the database world from a technology standpoint. The problem is we have to deliver that autonomous database on first-class cloud infrastructure to be successful in the cloud business. We need more than just a great database. We have the best database but we also need first-class infrastructure to run that database on.
And we now finally have that with our generation two cloud, and I think you'll see the combination of the Oracle Autonomous Database in the generation two cloud. You'll see rapid migration of Oracle from on-premise to the Oracle public cloud and to the Oracle cloud customer. So, we think -- as I've said in my opening remarks, we think we are not only going to hold on to our 50% share, we're going to expand it. Nobody to save maybe -- Jeff Bezos gave the command I want to get off the Oracle database. And they've been working on this for a few years to try to get off the Oracle database and get on to the Amazon databases. It's taken Amazon who is dedicated to doing this several years and they are not there yet, why nobody else is going to go through that forth march, to get go on to the Amazon databases if Amazon can't even get there without this effort. We are confident we hold on to it…
Our next question comes from the line of John DiFucci with Jefferies.
My question is a follow-up to Brad's and Larry, and I think it's more for Mark or may be Larry too. We understand your focus on moving your 50% relational database market share to the Oracle cloud, but that's going to take time for your customers to get there. And until then, they will likely consider to buy for on-premise deployments. This quarter platform and infrastructure grew 1% constant currency and we realized there is headwinds in there from like the middleware business and probably some other things, but more interested in the database. As you say Larry that that's one of the strategic products as that has to be successful here. Can you give us some more color on the database in this quarter, especially for the options? And to that stand out for me or multi-tenancy and in memory, but I know there is other that are associated with the autonomous database. I mean these are two, but others that are really specifically. And I guess when will we see those tailwinds from whatever middleware and whatever else is causing them to subside in that part of the business?
Larry, will start and then I can follow up through the numbers for you, John.
Okay, the autonomous, the database options grew about 4% in the quarter. And we've never had a quarter that I know of where the database business has not grown, the database license business has not grown. The issue has been when will we get our cloud infrastructure solid enough to host our database? And the answer is, we did that several months ago. But less than a year-ago, less than a year-ago, we got the infrastructure in shape, OCI, the generation two of our infrastructure is now there. We're now running thousands of Oracle autonomous database trails that our customers look at this.
And customers can migrate from on-premise to the autonomous database very, very quickly. It is not -- it's not a technology upgrade, it's just an update, just move your data, drop a few indexes and you're there, you can do it very quickly. So we expect that the uptake next fiscal year we're going to get enough business for the Oracle database and the Oracle public cloud to move the needle. The answer to the question, when does ERP actually move the needle? When does ERP get around the billion dollar growth rate? And Mark said, we got a shot at doing that next year. We have a shot at doing the same thing, moving the needle the same distance with Autonomous Database, next year.
By the way, John, just a couple points rather to Larry's points. We haven't had a quarter where database license and support didn't ever grow. And the options -- just to follow up a little bit of color, the autonomous options actually grew the fastest of the group of options. So again, while the trials or what I said, we've had thousands of trials and they're growing monthly, which is again to Larry's point about next year's impact on revenue. The options are a pretty good precursor of that, that you're seeing those options like active data guard, multitenant et cetera that are really driving the options growth that Larry described.
Our next question comes from the line of Phil Winslow with Wells Fargo.
Just want to follow up on, Larry, your last comment there about the Autonomous Database. I mean, obviously, the transactional database just in August and data warehousing went in earlier this year. But I think what has the feedback been from customers, why is interest level growing? Is it cost? Is the availability, et cetera? Maybe just some more color on what you're hearing from clients now that the two options have been live out there? And then just to your point there about the adoption of the life cycle. Wondering if you can step us through that, what are the key milestones you think that customers need to see to then start hitting the inflection point on adoption?
Okay, I'll tell you that the thing I thought would drive the autonomous usage was reduction of labor cost, you eliminate human, labor you lower cost, you eliminate human labor, you lower errors. What has really been driving is productivity. They've been able to get -- we've had customers that literally got their databases up and running in 15 minutes. And existing customers, existing DBAs put up another system in 15 minutes whereas a normal quantum to put something up like that was 15 days.
So the fact that the existing teams at DBAs our primary customers can make themselves dramatically more productive, get 10 times more done in the same time period than they could prior to the autonomous database has been the thing that has been most shocking to our customers. And it's the thing that's driving -- that we think is actually going to drive the migration more so than, if you will, closing data centers and reducing labor costs.
Our next question comes from the line of Sarah Hindlian with Macquarie.
This is a question for Safra and Mark. It's obviously a very turbulent market out there. So I'd appreciate it if you both could tell us a little bit about what you're hearing from customers when you meet with them? What are they telling about how they see the world in light of all the volatility that's going on?
So many of our customers, especially those moving to SaaS and moving to the cloud, are looking for ways to increase productivity to spend a lot less money, running their back offices and to get real business insight from the technology. And there's an immense amount of excitement around it frankly. In fact, a number of our customers that may use one of our cloud products are now moving to our other cloud products without even doing a full RFP and competitive analysis, because they’ve been so satisfied with our product. In fact just today, I’ve got a call from this very well known company and they’ve already picked our ERP, and we’re so happy they’re just going to roll out HCM and supply chain management now next.
So, there’s a lot of enthusiasm around our products. As a general matter regardless of the economy, our products save them money. So, it gives them more money to invest in other things, and that’s what obviously I focus on with them.
I’d say listen, Sarah, most of our customers want to focus on their business, focus on growing their business, they want to focus on their customers that they do to make money. I think IT and I know you all know this but most of what’s going on in business IT today is most of the big budgets are spent on maintenance, keeping the existing applications, the existing infrastructure just running, very little innovation. The teams here with the products we’ve is now to change basically their paradigm, to shift their IT budget to our R&D budgets. And this is very attractive to our customers to transfer the work from them to us, and while they do it -- to use the line, Larry, always uses which is, they have to be willing to spend less as they do that. And then they get all this innovation at the same time.
So the fact that -- and this has now become something that we don’t have to evangelize to Safra's point, it’s becoming more mainstream in every dialogue. I mean this last week, I was in the Midwest, so our 10s of customers. And I would tell you it’s one of that the first trips where I didn’t spend evangelizing much, I've spent more time really talking about what we could do, meaning the maturation of the market now is as a normal course of business, how can we help save money, get more innovation at the same time. And by the way, I’d just add to Larry’s point while he talked about the great advantages. Customers do want to get out of data centers. They do want to get out of service. They do want to get out of infrastructure. They typically don’t help our customers advance their business.
So when you can do all this form and you can help save money and drive innovation, this is a big deal out in the market and this is what our customers are talking about.
Our next question comes from the line of Raimo Lenschow with Barclays.
Can I -- given that the comps are getting easier on the ops ecosystem for the second half, so there’s almost ton of the room for accelerating further. Can you double click again on that ERP NetSuite strength? I mean, you’ve 16,000 customers but in theory you have big market and you’re reaccelerating it. Can you double click on what’s working there and how big that could get overtime?
Well, sort of everything. So just to be clear on NetSuite, there’re -- and I’ve been through this before but it's a risk of going over again. There’re three core tenants as we bought NetSuite that we really focused on. One was we believe they were underserved in terms of the amount of sales resource they’ve in the market place. We’ve increased that dramatically, both domestically. And make sure I am clear to you, from a lot of the growth we’ve had in NetSuite isn’t just international, it’s domestic. They’ve had a tremendous run in the United States of America just simply getting the more customers, and we’ve also expanded their resource internationally and we’ve grown internationally, so just more sales resources have been part of it. Second, we’ve increased their R&D to get to more countries. So, with Release 19.1, we are in -- 18.1 and 18.2, we are now covering more, more countries than we were before. So, we have more sales people with more products available in more locations.
Third, we are very focused on industries. So when we say industries, we don’t mean something like just retail. We actually go into micro segments into the marketplace, like trying campus bookstores and say, we are going to really get features for that to discrete micro segment. So those three fundamentals of more sales resource, more countries, more micro segments, those are the three key fundamentals that we have driven. By the way we follow one of that same formula, the Fusion, which is really the same formula that we drive there. NetSuite just done a great job, that team has done a great job. And if I haven't been effusive enough about, I'm thrilled with their performance and what they have done and their future.
Our final question comes from the line of Michael Turits with Raymond James.
If Autonomous Database dose as well as you expect, what's the impact of that on Infrastructure as a Services? Is there feedback there?
Well, Autonomous Database and exited the services on Autonomous Database we think will be between third and half of our infrastructure. So, obviously, it's going to drive infrastructure, it is the driving force in infrastructure. We think moving -- if we did nothing but run Oracle applications in the Oracle public cloud and Oracle ISD applications, so all we did was moved Turner over and all these other guys over. And all the existing Oracle applications, we'd be more than 10 times bigger than Amazon that’s all we did. But we are -- of course, we are ambitious to do more than that. We have the big SaaS business as well. But the Oracle Database will drive the infrastructure business. It will be between -- around 50% of that business and maybe more.
I think that's -- it for us. Let me just say one other thing, to the extent that Autonomous Database does very well also, you can imagine that our margins on PaaS, IaaS, they just go through the roof. So, the more of our infrastructure that is -- is that not only are the revenues up, but the margins really skyrocket.
Okay, thanks Safra. A telephonic replay of this conference call will be available for 24 hours. Dial-in information can be found in the press release issued earlier today. Please call the Investor Relations department with any follow-up questions from this call. We look forward to speaking with you. Thanks for joining us today.
With that, I’ll turn the call back to Victoria for closing.
Thank you for joining today’s Oracle's second quarter 2019 earnings conference call. We appreciate your participation. You may now disconnect.