I'd like to turn this call over to KK, Senior Vice President, JPAC and Japan CFO.
Thank you, Nishio-san. Good afternoon, everyone, and welcome to Oracle Japan's earnings conference call. Fiscal year 2026 was a strong year for Oracle Japan. We delivered solid growth, strengthened our market position, and continued to expand our business across both cloud and mission-critical workloads.
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Our cloud business, particularly Oracle Cloud Infrastructure, remained a key growth driver throughout the year.
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We also made significant progress in expanding our cloud presence in Japan. We are pleased that five strategic partners have now committed to Oracle Alloy, helping establish an important foundation for Sovereign Cloud services in Japan.
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These initiatives are enabling customers to address growing requirements around data sovereignty, security, regulatory compliance, and operational control while the underlying cloud and data center infrastructures continue to expand.
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At the same time, our existing businesses remain stable and resilient. Many customers continue to rely on Oracle to run their most critical systems, and we continue to see steady demand from organizations that prioritize reliability, performance, and long-term operational stability. This combination of growth and stability remains one of the key strengths of our business.
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Looking ahead, we believe we are entering the next phase of growth.
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AI is rapidly becoming a strategic priority for many organizations. However, the opportunity for Oracle is not AI itself. As customers prepare their businesses for AI, they are investing in infrastructure, data platforms, applications, and deployment models to support AI securely and at scale.
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We believe this will create new opportunities across Oracle Cloud Infrastructure, database services, cloud applications, and sovereign cloud initiatives. With growing cloud business, a stable install base, and expanding sovereign cloud capabilities, Oracle Japan is well positioned to benefit from these investments in the years ahead.
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Let me give a few customer examples to establish what I have said so far.
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Customer number one, SoftBank. Oracle and SoftBank have further strengthened the partnership, with SoftBank adopting Oracle Alloy and will launch generative AI services powered by the Japanese LLM Sarashina on its Cloud PF Type A platform starting in June 2026.
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Built on Oracle Alloy and operated in SoftBank's Japan-based data centers, Cloud PF Type A provides a sovereign cloud environment with access to more than 200 OCI, AI, and cloud services.
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By combining Sarashina with Cloud PF Type A, organizations can securely leverage proprietary data for generative AI applications, including document automation, coding assistance, AI agents, and multi-agent systems, helping improve productivity and accelerate innovation.
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Number two, DENSO. This is an interesting one. DENSO is modernizing its global supply chain operations on a scalable, integrated platform to improve efficiency, decision-making, and risk management while advancing innovation and sustainability initiatives.
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Building on its existing investments in Oracle Fusion Cloud ERP and Oracle Fusion Cloud HCM, DENSO will implement Oracle Fusion Cloud Supply Chain and Manufacturing across planning, procurement, manufacturing, and delivery operations.
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The solution will enhance supply chain visibility, reduce costs and risks, and accelerate decision-making. As part of its broader transformation strategy, DENSO will also establish an AI Center of Excellence to promote AI adoption, share best practices across Fusion applications, and align leadership throughout the program.
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Number three, Dai Nippon Printing. DNP offers an on-premise AI solution for organizations with strict security requirements, helping unlock knowledge embedded in documents and operational data.
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Using Oracle Autonomous Database, DNP transforms unstructured content such as manuals, quality records, and reports into AI-ready data while integrating it with real-time business data across inventory, procurement, assets, and quality management.
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By combining vector search and SQL search, the platform enables organizations to seamlessly access and leverage both unstructured and structured data, improving knowledge utilization and operational efficiency.
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Just to give you a sense of the broad outreach in the market that we have with our different products and services, to underline Oracle's presence in the most mission-critical systems, applications, and industries.
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With that, let me turn to our financial results for the year ended May 31, 2026. The total revenue was JPY 285,073 ,000,000 growing at 8.2% compared to the previous year, driven by strong growth in our cloud revenue.
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Our total cloud revenue was JPY 83,184 ,000,000 up 34.3% and now represents 29.2% of the total company revenues.
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Infrastructure consumption revenues had very strong momentum, including Autonomous Database. Operating income was JPY 89,795 ,000,000 increasing 3.4%. Net income was JPY 63,537 ,000,000 up 4.6%.
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We are also pleased to forecast a dividend total of JPY 858 per share, including a normal dividend of JPY 198 per share.
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FY 2026 was a record year for Oracle Japan. We enter FY 2027 with strong momentum. With healthy pipeline, continued cloud adoption, growing opportunities across our business, we believe we are well positioned for another year of growth.
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Our revenue guidance for FY 2027 is 6%-10%. Our EPS guidance ranges between JPY 525-JPY 540.
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Thank you very much.
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First question is from Tana ka-san from BofA Securities. Can you explain why the HR cost went up by JPY 3 million? That's the first question.
[audio distortion ] I think I'm back. As a company, we have been looking at our people structure and the impact of AI and overall efficiencies in the organization. As a result of which we had some restructuring. Some of those costs are reflected in the higher expense that you see for human resources in Q4.
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Second question from Tanaka-san. When we look at the category others, the expenses went up by JPY 1 billion. Can you explain the breakdown of this JPY 1 billion? Is this situation going to continue on in the subsequent quarters?
It's multiple expenses that constitute this. One of them was a large event that was conducted around the same time frame. Advertising expenses went up. Some telecom expenses went up as well. The marketing event will be an annual show. We will see slightly higher expenses whenever we conduct that annual event. The others are business as usual expenses.
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Next question is from Kikuchi-san of SMBC. First question is about the labor cost. That was already answered. We're going to skip that first question. Second question is about the dividend. A special dividend will be paid out at the end of May of 2026. But this special dividend was also done two terms ago, two years ago in FY 2024. In a short period of time, a significant amount of special dividends are being paid out. Is this appropriate for your organization?
We carefully consider our dividend policy every year with the board and decide on what is most appropriate. We were sitting on a large pool of cash and we considered all possibilities, and we wanted to make sure that we enhance shareholder value. As a result of which, there is a consensus in the board which is still not approved. It is still a forecast. I still need the final board approval. At this point it is a forecast. There is consensus that we would like to reward our shareholders with this dividend.
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Next question is from Henderson-san from JP Morgan. The total amount of the dividend is higher than the cash position in Q4. From a cash flow perspective, can you give us your take on that?
We are pretty confident. We will be generating cash in the next couple of months as well. We should be able to take care of this payout. We haven't yet finalized the source, but we have lots of options available, including premature retirement of some of the loan that we have with the corporation. I don't see any challenge in the distribution.
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Second question, if you are confident in your cash flow, normal dividend payout 100% might be appropriate, do you have any thoughts on that?
This is a board sort of discipline. I don't know what is appropriate. We generally try to maintain a normal dividend of 40%, which has been our consistent policy for several years. As and when we think there is enough cash, surplus cash, we try to reward the shareholders. That's how we look at it, and that's how we probably will continue to look at it in the future as well.
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Next question is from Watanabe-san of Mitsui Sumitomo DS Asset. If we look at the segment operating profits, the adjustment portion is quite significant. If the labor cost point that you talked about earlier includes some kind of one-time payout of any bonuses, is this something that will be continuing on into the future?
As I said earlier, we had a restructuring cost in Q4. Most of what we see in the adjustment column pertains to the restructuring cost. As a company, we will continue to look at getting operational efficiencies. We will continue to invest in the right people for our future businesses. I won't say that restructuring efforts will continue, but definitely we will continue to look at becoming more efficient as an organization. That's how the management thinks, and that is what is best for the shareholders as well.
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Next question is from Ueno-san of Daiwa. This is again about the labor cost. We will skip this one.
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No more questions.
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