This summary is based on the first quarter fiscal 2009 earnings call conducted by Oracle Corp. (ORCL: chart) on September 18, 2008.

Management:

- Co-President, Chief Financial Officer, Director: Safra A. Catz
- Chief Executive Officer, Director: Lawrence J. Ellison
- Co-President, Director: Charles E. Phillips
- Investor Relations: Roy Lobo

Key Investors Issues

- Earnings rose 28% to $1.1 billion or 21 cents a share from $840 million or 16 cents in the prior year.
- Revenues were up 18% to $5.3 billion.
- The firm bought back approximately 22.7 million shares.

First Quarter Highlights

Earnings were up 28% to $1.1 billion or 21 cents a share from $840 million or 16 cents in the prior year due to revenue growth.

- Revenues were up 18% to $5.3 billion from $4.5 billion in fiscal 2008 as software revenues were up 20% to $4.2 billion with new software license revenues up 14% to $1.2 billion.
- Software license updates and product support revenues were up 23% to $2.9 billion, while Services revenues were up 9% to $1.2 billion.
- Operating margins were up 170 basis points to 29%.
- BEA contributed $84 million in the quarter but is now a merged product with Fusion Middleware in most cases and so the allocations are not precise.

The applications license revenue contributed $331 million and that is down by 12% in the quarter, primarily due to the 65% applications growth in the prior year.

- Operating cash flows for the trailing 12 months increased by $1.3 billion to $7.9 billion, while free cash flow increased 20%.
- The firm bought back approximately 22.7 million shares at an average price of $21.97.
- The firm’s exposure to banking customers globally is in the low-single-digits and exposure to U.S. banks is even lower.
- In addition, it has reviewed its exposure to financial institutions who are reported to be facing significant asset impairment and liquidity risk and have concluded that the exposure is de minimis and immaterial.

Operational Highlights:

- The license renewal business, sometimes called maintenance, software maintenance, is now approximately half of the business and that’s an extremely high margin business.
- It continues to grow in a very healthy fashion, so that’s a reshaping of the business, where the highest margin portion of the business is now also the largest portion of the business.
– The firm’s database business according to Gartner’s latest report, which covers the year 2007, lists the Oracle database with a 49% market share, which is larger than the next four competitors combined.
- The fastest growing business is the middleware business, which grew 35%.

Major Product Area:

- The firm is seeing significant adoption of 11g on pace with the 10g adoption curve and expects that momentum to continue.
- Over 200 ISVs have certified and once a customer has upgraded, they are eligible for additional options, such as active data guard, advanced compression, total recall, and a very important one, real application testing.
- The firm has now back-ported that to 10g and 9IR2, so more customers can upgrade as they test their applications and get to 11g.

The Linux platform continues to do well, with some name brand customers standardizing on it this quarter, i.e State University of New York, Corning, Payless Shoe Stores, and Quantum Corp.

In the middleware area, on the product side, as part of the 100-day release plan for BEA products, the firm announced products it will be shipping, including Web Logic Server 10g R3, [JRock] Admission Control, Web Logic Network Gatekeeper and several others.
- There will be an additional 19 products certified on the Web Logic Server 10g R3 platform within the Oracle product line this quarter. –
- Key customer wins include ESPN, Capital One, City of New York, Nissan and big Oracle business intelligence wins at American Red Cross, Marsh & McLennan; content management with Abu Dhabi and the State of Kansas.
- In the application area, some key ERP wins with Daimler, Avon Products and Illinois State University.

Some very key strategic wins in core banking platform include Deutsche Bank for the FLEXCUBE Private Banking; Société Générale for FLEXCUBE Universal Banking; and JPMorganChase for for credit and operational risk management.

- In telecommunications, wins included Telecom Italia and Samsung Networks for billing and revenue management, and then some interesting go-lives i.e. Facebook went live on EBS R12.
- International went live on Demantra and Land of Lakes, live on JD Edwards 8.12 and Hyperion.

Second Quarter Outlook:

- New software license revenues are expected to be up 5% to 15% year over year in constant currency and then 2% to 12%, assuming that rates stay where they are at negative 3.
- Total revenue is expected to be up 12% to 15% year over year and 9% to 12%, assuming today’s rate.
- EPS is expected to be 26 cents to 27 cents.

Key questions and answers from the first quarter earnings call conducted by Oracle Corp. (ORCL: chart) on September 18, 2008.

Sarah Friar (Goldman Sachs): Could we really think about fiscal 2009 being yet another margin expansion year for you?

Safra A. Catz: No, I actually expect us to continue to improve margins as the operating leverage in the business really continues. At our size we have enormous economies of scale, both because of our back office and our distribution capability but most importantly, we have an enormous maintenance space.