Which means the street isn't buying into our story of growth and no-touch databases.
Probably means Papa Mark and Mama Safra are going to take some of us out to the back shed and tan our hides with a good RIFfin'!
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Well, RIFfing is Papa Mark's primary (only?) skillset...as is always true of "leaders" that lack vision. Just ask HP...
The investment analysts, rather than admitting they had incorrectly judged ORCL's growth potential, are touting the stock's fall as a buying opportunity.
Excellent analysis, @Phgwn0E-2ija, I hope you don't mind me bumping it to a thread.
I've been inside engineering. It can't go on like this.
LE, MH, SC may have been able to manipulate things to keep the stock up, but that can't go on forever.
I think we are in for a big dip. I've sold my stock. There are safer places for the money to be.
beginning of massive layoff.
Slowly back to $40.
I think that in the short term the stock will bounce back a bit, but in the long term I'm bearish on ORCL.
By the way, there were a lot of divestitures / spin-offs recently that undoubtedly drove Oracle revenue growth. The spin-off often has older systems that use Oracle software, such as home-grown apps with the Oracle database, SAP with the Oracle database, or older Oracle applications like Peoplesoft or JD Edwards. They must buy new licenses as they become separate business entities. See: https://www.forbes.com/sites/joecornell/2017/01/05/the-top-15-spin-offs-of-2016/#35217682204d
There were bizarre statements in the earnings call and major red flags in the financial statements. Their announcement that executives were now going to be compensated primarily on cloud revenue is very strange, considering that SC and MH already cashed out their stock options this year to the tune of over $100,000,000. The earnings growth again was primarily due to a tax break as it was in Q4. New on-prem licenses shrank by 6%, and that was compared to a weak Q1 last year. This guarantees that Oracle's big profit engine - license renewals and maintenance (54% of revenue) - will start showing year-to-year revenue declines too. If you are not getting new customers, you are not getting customers who will renew in the coming years. The main area of growth was SaaS ... in other words, the Netsuite acquisition. Then LE said that Oracle wouldn't make any more cloud acquisitions and would concentrate on organic growth! Clearly, Oracle isn't growing organically. IaaS / PaaS showed growth on the income statement, but everybody knows that number cannot be trusted as customers are being forced to buy cloud when they renew on-prem licenses. (Microsoft has been doing the same thing for years.) Then came the weak guidance. Then add the rumors of turmoil, attrition, and layoffs on this board, almost all of which turned out to be true. Yes, I'll give Oracle this - they did show revenue growth, unlike IBM - but this growth is clearly not sustainable.
The real story here is Oracle Finance.
A good journalist or the SEC could investigate how that arm of the company works in conjunction with the rest of the company to enable sketchy cloud revenue...in these new MH deals.
Oracle Finance is the mechanism being used to get around the GAAP accounting rules for the business units. The tech pillar is using it regularly in these deals to convert cloud credits or Included SaaS ULAs and even banks of consulting hours to immediate recognized rev.
The only way to maintain the profit number is cost cutting. Cut benefits, cut promotion and more layoffs. Trust me.
The future isn't in SaaS... or NaaS... or ANY of that "Rentier-Class... B.S..."
Oracle leadership is nothing but LJE, SC and MH earning disproportionate income and a bunch of VPs s---ing them around and another couple of rings of VPs around those VPs. They have lost the heart of their employees and customers. It will go down sooner. They spent too much time in firing people and taking care of themselves. A Sh--ty corporation.
His yachts no longer win because they are overloaded with lawyers and the crew spend all their time agreeing to the EULA's and reading Dorian's MUST READ policy reminders rather than sailing. It must be hard steering the boat using a workflow and getting managers approval.
I've also heard that customers when buying large software deals or ULAs are having cloud included with on-prem prices being cut to subsidize cloud credits. The customer pays the same or even gets a better deal than if they don't buy cloud.
The other thing I have heard is that customers who are not happy with their support bill are getting relief by being able to shift a percentage of support revenues to cloud revenue. The risk to Oracle is that once the contract period is over, the customer can withdraw the cloud revenue without penalty.
Oh darn..... Larry may not be able to buy his next island....
too bad Larry :(
@1tai Don't know about expiry but a lot are coming from license audits. Instead of buying software licenses as a result of the audit they sell the customer cloud credits so it can be booked as revenue and boost the cloud numbers. Reps are struggling to get anywhere near their cloud targets.
MBA's and Wall St. can (SHOULD) own up to ALL THIS...
If they don't use the cloud credits, do they expire? Does the customer not have to pay any money if they aren't consumed? Can Oracle recognize the revenue?
Well, the "Cloud"ain't the "answer," and neither it outsourcing... put the "power" of "data" back into your clients hands... and streamline, and simplify your product...
The whole Equifax-isasco was due to this...
In yesterday's Earning conf call, there is NO single word mentioning SPARC. During Q&A session,
no one bothered to ask about the SPARC and SPARC based platform. All the conversation is about
CLOUD blah blah..
It seemed people are not buying the glory story about the future CLOUD.
WTF, they run out of cloud washing detergent, the washing machine broke down? LOL
It's downhill all the way.....
Surprise surprise! It's only going to get worse as they can't sell cloud credits because customers are sitting on so many unused credits.
Oracle's stock sees its worst day in 4 years as a weak earnings forecast gets punished on Wall Street
Oracle was the worst-performing stock in the S&P 500 on Friday. The stock turned negative after the company gave guidance for the next quarter.
https://www.cnbc.com/2017/09/15/oracle-orcl-stock-down-q1-2018-earnings-guidance.html