Oracle Corp. Pricing Spine-o-meter: 3 of 5 Vertebrae

甲骨文 , a global database, enterprise software, and IT infrastructure provider, had a strong Q2 2023 ending 30 November 2022.?Revenue increased 18.5% over the same quarter last year to $12 billion while operating income swung from a loss to a profit of $3 billion.

In their earnings call held on December 12, ‘22, both CEO Safra Catz and Chairman and CTO Larry Ellison attributed the positive performance of Oracle to winning customers with superior technology and solutions, especially with respect to SaaS and IaaS solutions.?

The hard financial evidence supports the claim that Oracle is gaining in sales revenue yet does not reveal if these gains are achieved in relation to prices and selling quantities.?Management statements indicate that Oracle is selling more offerings, but we cannot identify how Oracle is managing prices.

That is, Oracle management statements and financial results indicate a continued improvement to Oracle’s customer value proposition, thus putting more money on the table, but do not indicate neither up nor down how Oracle is doing in capturing its fair share.?

News surrounding Oracle indicates some dissatisfaction with Oracle pricing, yet vocal complaints are not the same as action. Repeatedly, we have observed customers complain about pricing and high prices in various industries but respond to price changes by purchasing more of the company’s offerings.?Hence, the few news stories regarding Oracle prices and customer responses are not indicative of corporate behavior.

Research into the quality of Oracle’s pricing team indicated a mixed but positive state of affairs.?We found pricing professionals at the analyst, manager, director, and senior vice president levels.?We found pricing professionals working on new offering pricing, pricing analytics, and pricing operations, and priding deal desk. ?Yet, considering the size of Oracle and the complexity of its business, we expected to find several more pricing professionals than those identified.?

Given the importance and capability of pricing at Oracle as indicated in financial reports, management comments, and our pricing team research, and given their performance, we have come to the following conclusion as of February ‘23.

Oracle Pricing Spine-o-meter:?3 out of 5 vertebrae.

ORCL (Oracle Corp.) rose from 79.9 on the day prior to their earnings call to 88.6 one month later. 2022 revenue of $42.4 B with a 26% operating margin and P/E ratio near 28.

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