Ken Bond - Senior Vice President, Investor Relations Safra Catz - Chief Executive Officer Mark Hurd - Chief Executive Officer Lawrence Ellison - Executive Chairman of the Board and Chief Technology Officer

Heather Bellini - Goldman Sachs & Co. John DiFucci - Jefferies Ross MacMillan - RBC Capital Markets Phil Winslow - Credit Suisse Raimo Lenschow - Barclays Capital Brad Reback - Stifel Nicolaus Kirk Materne - Evercore ISI Joel Fishbein – BTIG

Welcome to Oracle’s Second Quarter 2016 Earnings Release. As a reminder, this call is being recorded for replay purposes. I’d now like to turn the call over to Ken Bond, Senior Vice President, Investor Relations.

Thank you, Holly, and good afternoon, everyone, and welcome to Oracle’s second quarter fiscal year 2016 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 website. 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 these forward-looking statements. These forward-looking statements are also subject to risks and uncertainties that may cause actual results to differ materially from statements being 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 on our 10-Q and 10-K and any applicable amendments for a complete discussion of these factors and 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 will begin with a few prepared remarks. With that, I’d like to turn the call over to Safra.

Thanks, Ken. I’m going to focus on our non-GAAP results for Q2, I’ll then review guidance for Q3 and Q4 and turn the call over to Larry and Mark for their comments. As you can imagine, we’re very pleased with the quarter. Total revenue exceeded my guidance, driven by the combined strength of our cloud business, as well as better than expected results from the on-premise software business. Earnings per share were also above my guidance coming in $0.04 better than the midpoint of the constant currency range I provided last quarter. Q2 currency headwinds were mostly as expected around 6% in most categories, including total revenues. However, the currency effect to earnings per share was $0.06, $0.01 more than my guidance. We will continue to use constant dollar growth rates on our quarterly calls, so we can have some measure of consistency across the quarter, as well as to reflect how we measure the business. Considering the progress we’ve made in our transition to the cloud in the subscription business, from now on, I’m going to start with our SaaS and PaaS business. We continue to see excellent momentum there with bookings growth of 75% for this quarter on top of the 147% we reported last year. SaaS and PaaS revenue was $487 million, up 38% from last year, 39% in GAAP. Sequentially, SaaS and PaaS revenue grew 8%, and we expect the sequential growth next quarter will be even higher. The bookings growth that we have been experiencing will now translate into a significant acceleration in SaaS and PaaS revenue growth in Q3, where we could hit 50% revenue growth and in Q4 where it should be even higher. You can also see the coming revenue acceleration of our cloud business in the SaaS and PaaS billings and deferred revenue. SaaS and PaaS billings grew 68% in U.S. dollars this quarter. On top of the 70% growth last quarter, also the gross deferred revenue balance is now nearly $1.1 billion and was up a 135% in U.S. dollar. We’ve put the billings numbers up on our website for you to see the detail. The balance of our cloud revenues come from cloud infrastructure as a service, which was up a 11% to a $165 million. While SaaS and PaaS revenue will see much higher growth rates, we expect infrastructure as a service revenue growth, which is currently dominated by our hosting business will be more moderate for now. Total cloud revenues, which is Saas, PaaS, and IaaS were $652 million, up 30%. As our cloud revenue continues – as our cloud revenue business continues to scale from the growth we are experiencing, it is beginning to benefit our margin, as I previously predicted. The Q2 gross margins for SaaS and PaaS was 43%, up from 40% last quarter, and we’ll see further improvement in Q3. I also expect the Q4 exit rate gross margin for Saas and PaaS will be around 55% to 60%, and from there we’ll be targeting 80% in fiscal year 2018. The gross margin in the IaaS business was up slightly to 45%. Capital expenditures for the quarter were $195 million, or $251 million lower than Q1. And I expect the cloud-based cloud-related CapEx for the full-year will be lower than last year, as we utilized the investments we have made. On-premise software revenues, including new software license and software license update and product support was unchanged at $6.4 billion. Software license update and product support revenue was $4.7 billion, up 5% from last year and up 1% sequentially. Attach and renewal rates are running at their usual high level. New software license revenue was $1.7 billion, down from last year, but a bit better than I expected for the quarter. Over the full-year, I expect we will see modest growth in our on-premise software revenue comprised of continued growth in software support that more than offset declines in new software license. Finally, total hardware revenue was down 10%, which included a hardware products revenue of $573 million and hardware support revenue of $550 million. Total revenue for the quarter was unchanged at $9 billion. Non-GAAP operating income was $3.7 billion and operating margin was 41%. I believe this for the fiscal year, we are currently in, we are more than halfway through what will turn out to been the trough year for operating income. The non-GAAP tax rate for the quarter was 20.4% and the GAAP tax rate was 17.6%, as we saw some one-time non-cash benefit. Non-GAAP EPS was $0.63 in USD and GAAP EPS was $0.51 in USD. As I said earlier, non-GAAP EPS was $0.06 lower, due to currency. Free cash flow over the last four quarters was $11.3 billion. We now have more than $52 billion in cash and marketable securities, net of debt, our cash position is over $10.4 billion. Short-term deferred revenue balance is $7 billion, up 9% in constant currency. This quarter we repurchased more than 86 million shares for a total of $3.25 billion and over the last four years, we have reduced the shares outstanding by more than 16%. The Board of Directors also declared a quarterly dividend of $0.15 per share. Over the last 12 months, we have repurchased more than $250 million share for a total of $10.3 billion, and paid out dividends of $2.5 billion for a total that is more than a 110% of our free cash flow. I’d also like to formally welcome Raymond James to Oracle’s Board, she is a great addition. Now to the guidance. I’m going to give you guidance for Q3 and then some preliminary guidance for Q4. We feel very good about the progress of our cloud transition and clearly customers are rapidly adopting Oracle. As you know, we’re expecting to see a material second-half acceleration in our SaaS/PaaS revenue, based on our bookings growth and the expiration of customer promotion. My guidance will reflect this making it easier to see that we are taking share in the industry. Since we have a clear trend and visibility through the end of our fiscal year, I’m going to give not only Q3 guidance, but also some guidance for Q4. My intention is to share with you what we are seeing in our business now that we have a line of sight to it. All my guidance today is on a non-GAAP basis and in constant currency. We expect to see continued volatility in exchange rate. I’m going to give you constant currency guidance. But if current exchange rates remain the same as they are right now, we expect to see currency headwind of 4% on revenue and $0.03 to EPS, which is significantly less than Q2. So onto guidance. SaaS and PaaS revenue is expected to grow between 49 and 53%. Cloud IaaS revenue is expected to grow between 3 to 7%. Total cloud and on-premise software is expected to grow 3 to 4%. Total revenue growth is expected to range from zero to positive 3. Non-GAAP EPS in constant currency is expected to be somewhere between $0.63 and $0.66. This assumes a non-GAAP tax rate of 25.5%. Of course, if this quarter is any example it may be – it may end up being different, probably better. Looking further out to Q4, we expect to see continued acceleration in SaaS and PaaS, as well as a return to EPS growth year-over-year. My guidance for Q4 is also in constant currency. SaaS and PaaS revenue is expected to grow between 69 – 65 and 69%. Cloud IaaS revenue is expected to grow 1 to 5%. Total cloud and on-premise software is expected to grow between 2 and 4%. Total revenue growth is expected to range from 1 to 3%. Non-GAAP EPS in constant currency is expected to be somewhere between $0.83 and $0.86, which is a significant increase compared to last year’s $0.78. As I said before, I believe fiscal year 2016 is a trough year for profitability, as we move to the cloud. As such, I expect to see strong EPS growth in Q1 and beyond. My Q4 EPS guidance assumes the same non-GAAP tax rate as Q3 at 25.5%, but that’s probably too early to get a real beat on. Finally, SaaS and PaaS gross margins are expected to improve in both Q3 and Q4 exiting the year between 55% and 60%. I will, of course, revisit Q4 guidance with you as part of the Q3 earnings call. With that, I’ll turn it over to Mark for his comments.

Thanks much, Safra. So in the spirit of giving you just a blizzard of numbers, I’m going to extend that. Because our strong cloud bookings deferred revenue growth will lead to revenue acceleration in the second-half and next year, we talked about a 38% year-on-year double-digit growth. Our billings grew 68%, and again, this give you a number, Salesforce grew 21% and Workday 41%, we grew 68%. Bookings $284 in USD. In cloud 75% growth. Let me give you some customer numbers. We added 857 new SaaS customers in the quarter, 720 customer expansions. Our installed base is now over 10,000 customers. Over 3,000 of these are Fusion and almost 50% of our bookings in dollars are now Fusion. In HCM, we added 211 customers, growing faster than Workday, CX 409 customers. In ERP, we added 311 customers. We are now over 1,500 customers are installed base. 450 are now live, 5X Workdays, 90. ERP and EPM more than half of our Q2 wins did not have Oracle on-premise apps, mean that in one quarter, we sold more net new customers than Workday did in its lifetime. In PaaS, we added 1,343 new PaaS customers, 4,100 now over the last 12 months. Bookings are 100 million in USD and 75% of what we sold is now subscription, non-metered, 25% metered, our PaaS business is scaling nicely. Now, I’m going to review a bunch of names. I just want you to get a context for sort of the brands we closed in the quarter. In ERP, Blue Shield of California, DHL, FDIC, McKesson, Toshiba, Mitsubishi Electric, [indiscernible], a very large phone company in France, a very large industrial manufacturing company, perhaps the largest in the world with over a $130 billion of revenue. In HCM, AAA, Allergan, City of Aspen, Crocs, think of many of these now that I’m naming again beats against Workday, Exelon, Kaiser, McGraw Hill, Genesis actually a replacement of Workday, Brocade, More HCM, the United Nations, Stanford University. In CX, AmBev – CXP and being customer experience, AmBev, Expedia, Halliburton, Lufthansa, Maersk, Motorola Solutions, Sears, Toshiba Mitsubishi and United Airlines. In PaaS, Anthem, IKEA, Kaiser, Kia Motors, Maersk, Qantas, Symantec and Windstream, I could have named a lot more. I just wanted to give you a flavor for what we did in the quarter. Just to wrap up and connect a few dots for you on the Oracle Saas/PaaS cloud, we are currently at a $2.6 billion run rate in total cloud revenue. It’s likely our quarterly run rate will exit the year around $3.2 billion, and we’ll grow further after Q1 bookings. We will book roughly a 1.5 – more than 1.5 million in ARO this fiscal year, 1.5 billion, sorry, thank you, billion. If we continue to book the way we expect, we should see our first $1 billion quarter for SaaS/PaaS revenue next year. Gross deferred revenue is now nearly $1.1 billion. That is up 135% year-on-year and 9% quarter-on-quarter. Gross margin improved sequentially, as Safra described 40% to 43%. We’re headed to 60%, and then as Safra described on to 80%. With that, I’ll turn it over to Larry.

Thanks, Mark. I don’t have nearly as many numbers. I’m moving right up to 25,000 feet and talk a little bit about strategy. Oracle’s strategy is to differentiate our cloud products from our competitors. In SaaS, we differentiate by delivering the industry’s most complete suite cloud application. In customer experience, we offer a CX suite made up of sales, service, marketing, e-commerce, and a lot more. In human capital management, we have an HCM suite made up of human resources, recruiting, training and so on. In Enterprise Resource Planning, we are delivering an ERP suite net of a financials, supply chain, manufacturing and all the rest. Oracle is the first company to mark it a complete cloud ERP suite from mid-size and large enterprises. By pioneering this market, we have become the ERP market leader with over 1,500 cloud ERP customers. Cloud ERP is now our fastest growing SaaS application suite. In past, we have differentiated by making it effortless for our hundreds of thousands of customers to move their millions of existing Oracle databases and job of programs to our cloud with a push of a button, thereby obtaining the low-cost and ease of use to the cloud without having to sacrifice any performance loss or any securities degradation. We now have a highly differentiated rapidly growing SaaS and PaaS businesses. This coming year, we will deliver a number of innovations in infrastructure to service as well. We expect that our rapidly growing cloud business will drive Oracle’s overall revenue and overall profit growth for years and years to come.

Thank you, Larry. Holly, could we please move to the Q&A portion of the call.

Absolutely. [Operator Instructions] Your first question will come from the line of Heather Bellini with Goldman Sachs.

Thank you so much. Safra, I had a question for you, just based on yours and Mark’s comments about the $1.5 billion plus in SaaS/PaaS PaaS bookings this fiscal year. Is it reasonable then to assume that in fiscal 2017 that we should see SaaS/PaaS revenue growth accelerate versus what you’re guiding too for fiscal 2016? Thank you.

Yes, Heather, in fact it will accelerate very strongly, it can’t help itself. Our bookings are so strong. We’ve had so many contracts already, and we’ll be recognizing those basically regardless of how bookings go and, of course, as you can see our bookings are also accelerating. So but, yes, we’re going to have a phenomenal as far as 2017 in the cloud business. Thank you.

Yes, you know, it has the right from the start it’s going to be strong, because you’re going to wind up with our Q4 at the revenue rate that that we just gave you some guidance on, you have the bookings on top of it. And when you start Q1 and into Q2, you can already do the math on what the comparison is going to look like. So it’s going to be a strong year and particularly strong start.

Thank you.

Next question please?

And your next question will come from the line of John DiFucci with Jefferies.

Hi. Thank you. Safra, it’s nice to see some modest progress in your gross margin goals for the cloud business 43% versus 40% last quarter. But non-GAAP operating margin was at 41% was a little bit low what we were looking for anyway. I guess, can you expand a little bit on the gross margin progress since the end of the year. I mean, this is going to be a steep ramp, and I’m just trying to – try to figure out how much of this is just based simply on this sort of top line growth you’re going to see as the sales promotions sort of and when you start to see top line grow, that’s going to happen or how much of it, if there’s any just to increase deficiencies as you move along? And then on the operating margin side, I realize, you don’t hedge the income statement, but was this due like could – like what would have been the impact on excluding foreign exchange effects?

So, okay, so let’s backup. It is all. The bulk of the SaaS and PaaS margin improvement is because we’re now recognizing revenues for which a much, much large revenues for which we have already paid for many of the cost. And so we built up an infrastructure that can handle massive amount of usage, significantly more usage, and we have not been able to recognize revenue, because we’re recognizing it ratably. As we scale, this is absolutely an area where it is inevitable that we – that – this improves. In addition, we also have efficiency gains at all times, but that is again because of our larger scale and those are simply current use of scale. But the bulk of it is, we’re starting to be able to recognize revenues for which we have already invested. As how many points, actually the impact on operating income for us was quite significant from a currency point of view. But hold on, I’m doing the math, Q3, I don’t know, I’ve got to actually do it on our margins. I have to do it while you’re talking, while other people are talking, and then I’ll give you the exact answer at that point how much of it was…

Yes, we’ll circle back to later in the call here. Why don’t we go to the next question please?

Great. Thank you.

Your next question will come from the line of Ross MacMillan with RBC Capital Markets.

Thanks for taking my question. Mark, I think by my math of cloud bookings are about $475 billion year-to-date. And so the hit to $1.5 billion for the year, $1.5 billion, you need to deliver billionish or so in the second-half. Just how confident are you in that goal? And then related to that, I’m curious on the platform or database as a service, you commented that non-metered was a higher percentage. I was just curious to get a sense of how you see customer usage trending on the database as a service product? Thanks.

Okay. Well, let me tell you confident that will be my answer to your question. Our pipeline, I think, I mentioned this at Financial Analyst Day, but I’m going to mention it again. Our pipeline, I can’t come up with a better analytical statement then just huge. And so our pipeline now is multiple billions of dollars, let me give you more color. If I look at the next six months our pipeline of things that are in the next six months funnel, you have a multi-billion dollar funnel and our conversion rate is increased. So that would tell you. And our business has become skilled enough or just to be clear that, it now is behaving like a large business begins to in terms of the scale of funnel, the pipeline, the discipline we have, the conversion rates we have et cetera. So that would be sort of my view on that on. On PaaS, we have had a change to your point of going away from metered to subscription of bookings. So the bookings are now the bulk, as I mentioned is a 75% now subscription as opposed to metered. And I would say the usage of our PaaS has increased not significantly, but sort of geometrically, meaning that it’s gone from when we originally started the usage to jumped up over the last four or six months, I’d say to where the usage is extremely hot, extremely high in terms of the increase of our usage. So it’s very exciting both in the bookings, the type of bookings, and the usage that we’re seeing of what’s booked.

Thank you.

The next question will come from the line of Phil Winslow with Credit Suisse.

Hi, thanks, guys, and congrats on a great quarter, particularly in the cloud. Mark, you gave some pretty impressive metrics both on the customer account side, obviously in addition to the numbers that we talked about in terms of just cloud billings. But if I focus on the SaaS side in particular here, really just a competitive question here, obviously, you put up some numbers that are sort of multiple times the size of your competitors. When you kind of look application by application, because none of us see every segments are same. Where do you think you’re kind of pulling away from the competition? Where do you – have you seen sort of the biggest change you think in that position over the past quarter, one, two years, that would be great? Thanks.

Well, it’s hard to get, I’m going to make this. This is going to be like the fifth time I’ve said this. But I’m going to try it again that in SaaS overall, we’re just better overall. We have more people. We’re well trained. Our products are matured, and we have a lot of references. Our position in ERP is just unique. We don’t have a competitor per se. I use these metrics to against Workday just to describe to you how expedientially far ahead of our sort of only person I can think of that’s built the product. Just to be clear in ERP SaaS, I don’t ever – I’m not trying to say it or might have somebody she knows or Larry might know. So I mean, don’t see SAP. I now in the market a lot. I don’t see him. So I don’t know what they’re working on, but it’s not ERP SaaS. In HCM, I think, we are continue to just get better and better and better. I mentioned, because I had a blizzard of names that I may have done myself with this service by mentioning so many names. But in the companies we actually replaced Workday. So imagine in a period of time Workday so – sorry, in HCM, we replaced Workday. So we continue to get better and better and better at HCM, and now we’re beginning to see a lot of deals better where you’re selling ERP and HCM is attached to the ERP sale. So because of ERP being a – in many ways a very strategic, very sticky sale, we now see our attach rates moving up and up and up where somebody buys ERP and they buy HCM at the same time. The scale of our Fusion products and the reason I gave you that metric for the first time is it is now a very high, it’s not beginning to become a reasonable percent of our total portfolio versus everything that we’ve got, including marketing, which is having a great run as you know. But I add to it the fact that now the Fusion products, which are extremely sticky, almost 50% of our total bookings. So, I mean, I could feel like you keep going down these metrics for you. But I think we’re unique in ERP and getting further ahead, I mean, we’re at a point now we have over 1,500 customers, and we’ll give you a prognostication where we end the year. But I – it’s going to be well over 2,000, I guess, it did. It’s going to be well over 2,000. We’re getting better and better at HCM. We’re in a leadership position in marketing. I feel good about where we sit.

Got it. Perfect. Thanks. Congrats, guys.

Thanks, Phil.

And your next question will come from the line of Raimo Lenschow with Barclays Capital.

Hey, thanks for taking my question. We talked a lot about cloud. But can I talk – ask about the database business? So 12C is in beta since OpenWorld. Can you talk a little bit about what are you seeing becoming closer to release two now hopefully. What are you seeing out in the market? Thank you.

Well, we see our customers with a much higher uptake of 12.2 simply because they have two key features that are very important to our customers. One is the In-Memory aspect of the database, where now have the PaaS’ In-Memory database. And the way you take advantage of that, you take any existing Oracle application and you run it without change on 12.2, and it runs much, much fast – it runs in memory without changing. So other people say, we’ll use market in-memory database. We have to rewrite the application. In this case, you don’t have to rewrite the application, you press the button. We run much faster and by the way we went faster in the competition. So we have a lot of our customers wanted to take advantage of in-memory acceleration, that’s one of the reasons they buy the new version of the database. The other thing is multi-tenancy. They’d like to do a lot of consolidation there, but a lot of small databases. They’d like to run on one machine and you can do that much more efficiently by running the Oracle database with multiple tenants. You consume less hardware resources that’s easier to manage. You can backup a whole suite of databases as a group of databases is one, it’s thoroughly automated. So that’s the other major reason we see a very rapid uptake. And finally, we’re seeing our customers, as our PaaS business begins to increase in adoption. The customer wants to run the latest version of the database in the cloud and they want to match that up with the latest version of the database in their data center. They want to run this basically the same technology, both in our cloud in our – and their data center. And that’s one of the unique value propositions that we offer our cloud customers the same exact technology on-premise and in the cloud. And those things will then co-exist for years and years to come. Then the customers are seeking up their version. We have a latest version in the cloud. They want the latest version on-premise. That’s also accelerating the adoption of the database on-premise.

Thank you.

Next question please.

And your next question will come from the line of Brad Reback with Stifel Nicolaus.

Great. Thanks very much. If I look at the results geographically Asia and Europe look to be pretty solid especially given what’s going on in Asia. North America seem to lag a bit. Were there any specific items that led to that underperformance?

No.

No, you are also looking at the Americas, no. So, for example, hardware revenues particularly problematic for us in Latin America seems like that. So while you look at the Americas, you are actually seeing Latin America, which has issues, of course…

With Brazil.

Brazil and North America, Canada, altogether.

Yes, U.S. was fine. I think to your point, Asia was strong. We’ve been doing our team as we talked about this before. We’ve been doing a lot of rebuilding in Asia and then has really shown promise for us and the results reflect that in the quarter. Europe had a solid quarter overall excellent results from the cloud and U.S. was fine, we would be able to describe it. In the Americas, as Safra’s point, you have the inclusion of Latin America, which is a great organization. It’s done a great job. They’re gaining share. In fact, if I look at every sort of metric we have in Latin America, we gain share in virtually every category we compete in the Latin America. But within the context of the quarter, the situation in Brazil is tough, which is reflected in these overall Americas results that you’re describing.

Great. Thanks very much.

And your next question will come from the line of Kirk Materne with Evercore ISI.

Thanks very much. Mark, I just want to double click on the strength in Fusion ERP, I guess, if we could. Just given how far in front you seem to be in that area. Are there any specific verticals or geographies that are sort of outsized in terms of how you guys are doing? And I was also curious about how much of the strength is sort of you guys going into the mid-market in a bigger way or the mid, upper, mid market in a bigger way? Are you actually starting to see some broader G 2,000 deals as well in terms of the ERP product? Thanks very much.

Well, my inclination to answer to your question, yes. But let me try to describe sort of what’s happening. We talked a bit this a little bit at financial Analyst Day. The good news about ERP or ERP suite is it’s still not available, it’s just going into other geographies. So with the last release we had, we now brought on manufacturing and supply chain. We’re now releasing the product for sale in some like, for example, in Brazil and some European countries. So we actually get some geographic expansion with the last release we had. So this is actually good news. The strong in this case actually get stronger. We actually now have material number of references. I think I mentioned, but I’m going to try again. We have over now 450 customers wide. This is a big, big metric. Our market also expands in a couple of ways with ERP, which makes it so important. We get two increases on our total available market, one is what you mentioned, the fact that we actually get to go down market now. And, yes, we do have broad market expansion. We get to compete for companies that otherwise would never have had 90 staff couldn’t have assembled in ERP system, we now get to compete. We also now remember when were in an ERP system, we were in the hardware we win everything, we win the whole stack. So our TAM really goes up on total available market on two dimensions, the total stack in addition to our ability to compete down market. Now that’s broad based, I – that’s why I specifically used the names I did. Our success is not unique to mid-market or up-market, it’s really both I mentioned the name of the biggest tele – I didn’t mention the name very, very big telephone company in France very big industrial company, these are huge companies at the same time as we have $50 million company that are moving to our cloud ERP. So it is broad-based success across geographies. But the good news, I believe, I think we’re just really getting started.

Great. Thanks. Happy holidays.

Thank you. Same to you.

We do have time for one follow-up question. And final question will come from the line of Joel Fishbein with BTIG.

Hi, Larry. At Analyst Day you talked about building second-generation data center architecture that should improve Oracle’s overall competitive positioning. Can you give us a little more color on what changes you’re making and when this will be rolled out?

Well, again, I said we’d – in my short remark before we start the Q&A I said that we will be delivering innovations and infrastructure as a service. And we have a next-generation data center that we’ve been architecting and building, in fact, with actually put out the data centers actually kind of up and running. There are actually three data centers what we call on availability zone, they’re all connected by a fiber-optic ring. And the thing we’ve really that we focused on a number of things, obviously availability, performance, but security are all things you would expect us to focus on. The big surprise – the big surprise, as we think, we would be by far the lowest cost provider of infrastructure as a service. We think we’ve been in this business a very long time. We’re very focused. This is our data – this is data center version two. We’ve been doing this for a while now. And we think that our cost of delivering infrastructure as a service in the cloud much, much, much lower than anyone else’s cost with this new architecture. And with these new data centers, we’ll be passing that on to our customers.

Great. Thank you.

Okay. I just needed to answer, I think the question is quite similar. I think it’s about from here about 3.5 to 4 point, something like that, okay?

Thank you, 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, and we look forward to speaking with you. With that, I’ll turn the call back to the operator for closing.

Thank you. This concludes today’s conference call. You may now disconnect, and we thank you for your participation.