Safra A. Catz
Chief Executive Officer at Oracle
Thanks, Ken and good afternoon, everyone. As you can see, Q4 was another fantastic quarter and the end of a great year. But before I get to the numbers, I'd like to go over our journey to get here. Three years ago, I shared with you that our own business transformation had reached a crossover point as our fast-growing businesses had eclipsed the size of our declining businesses. And as a result, this would inevitably drive revenue growth acceleration going forward. Now, I don't blame you for not believing me at the time. Fiscal year 2020 growth was zero. Well, as you can see this has played out with organic revenue growth accelerating significantly and that's despite the closure of our nearly $0.5 billion Russia business.
Since fiscal year 2020, our strategic back-office SaaS business has more than doubled in size and consumption of our Gen 2 cloud infrastructure service is now seven times larger and while competitors have seen their growth rates drop precipitously over the last year, our cloud infrastructure growth rate has essentially doubled from last year to 77% this quarter and with Gen 2 OCI growth even higher. And we are far from done. In fact, I just told my team I think we're at about the middle of the beginning. Looking ahead, I see even more growth opportunities that should help power future growth acceleration in the future. We remain committed to the fiscal year 2026 target that we shared with you last fall at our Financial Analyst Meeting and our exploding AI demand leaves us significant upside.
Our momentum has been driven by two fundamental differences from our competition. One, highly differentiated technology and two a much better customer experience. Firstly, our cloud applications are very popular with a growing base of customers in part because we are the most modern, comprehensive and innovative set of apps across back-office CX and industry application. We implemented AI machine-learning capabilities years before anyone was talking about it and it helps our customers run their businesses every day. To complete the picture, we can serve customers of any size around the world from small businesses on NetSuite to global enterprise on Fusion in all industries. Having the best cloud application technologies has helped us grow the business to $11 billion in SaaS revenue, while expanding gross margins.
On the infrastructure side, we're seeing more and more media articles reporting on the unique capabilities of OCI and our database technologies. Larry will explain our unique differentiation in a moment, but the result is the customers are choosing to run on Oracle infrastructure for all their requirements, they be the new services like AI training or services we're known for like database and Java. To complement the technology, we've changed our culture such that we are totally focused on our customers' success.
That partnership spirit starts with engineering as we work hand-in-hand with companies as they try out our technology and continues all the way through their success with us. There's no question that this close partnership with our customers has led to our success. As part of that, we've also created an organization called Customer Success Services or CSS. This group ensures the customers get the most value from their Oracle purchases from planning to activation to implementation to support to anything else, they need to succeed. We think this unique approach, which customers already tell us they love ultimately drives overall customer satisfaction and that results in higher renewal rates, expansion rates and referencing.
Now, I will turn to Q4. As always, I'll discuss financials used using constant-currency growth rates and also provide a full picture. I am going to share with you results, including and some excluding Cerner, so that you have at all. Total cloud revenues, SaaS plus IaaS was $0.4 billion, up 55% with IaaS revenue of $1.4 billion, up 77% and SaaS revenue of $3 billion, up 47%. Excluding Cerner, total cloud revenue, SaaS plus IaaS was up more than 33% at $3.8 billion. Total cloud services and license support revenue for the quarter was $9.4 billion, up 25% driven again by our strategic cloud applications, autonomous database and our Gen 2 OCI.
Application subscription revenues, which include product support were $4.4 billion, up 37%. Application-specific revenues including support, but excluding Cerner were $3.4 billion, up 11%. SaaS cloud revenue, again excluding Cerner was $2.4 billion was up 17%. Our strategic back-office SaaS applications now have an annual realized revenue of $6.6 billion and grew 24%, including Fusion ERP up 28% and NetSuite ERP up 24%. Together our strategic back-office businesses are now larger and have grown faster than our local competitor for four straight years.
Infrastructure subscription revenues, which also include support were $5 billion, up 15%. As mentioned already, infrastructure cloud services revenue was up 77%. Excluding legacy hosting services, infrastructure cloud services revenue grew 89% with an annualized revenue of $5.2 billion, including OCI consumption revenue which was up 112%, cloud at customer consumption revenue was up 60% and autonomous database was up 47%.
Database subscription revenues, which include database support were up 6%, highlighted by cloud database services, which were up 41%. As on-premise databases migrate to the cloud and cloud at customer, we expect these cloud database services would be a third leg of revenue growth and revenue growth acceleration alongside back-office SaaS and Gen 2 OCI cloud services. Software license revenues were $2.2 billion, down 14% following the 25% growth we saw a year ago in Q4. So all-in, total revenues for the quarter, including Cerner's revenue contribution of $1.5 billion were $13.8 billion, up 18%.
Shifting to margin, the gross margin percentage for cloud services and license support was 78% as a result of the mix between support and cloud. Last year, Oracle license support revenues with its mid-90s gross margins represented about 62% of cloud services and license support revenue and now it's down to 53%. But this is happening because our cloud services are growing much, much faster than license support even as license support continues to grow. Most importantly, gross profit dollars of cloud services and license support grew 19% with Cerner, 10% excluding Cerner in Q4. Additionally, I would note that IaaS gross margins improved substantially from last year and I expect IaaS gross margins will continue to improve. While we have continued to build data center capacity, we've also seen our margins go higher as these new cloud regions fill-up.
Non-GAAP operating income was $6.2 billion, up 12% from last year. The operating margin was 44%, as we continue to integrate Cerner. As we drive Cerner profitability to Oracle standards and continue to benefit from economies of scale in the cloud, we will not only continue to grow operating income, but we will also grow the operating margin percentages. The non-GAAP tax rate for the quarter was 9.2% and the non-GAAP EPS was $1.47 in US dollars, up 8% in USD, 10% in constant-currency. The GAAP EPS was $1.90.
For the full fiscal year, total company revenue was $50 billion, up 22% and excluding revenue, total revenue grew 7%. Total application subscriptions grew 35% and 7% excluding Cerner, compared to 8% last year and total infrastructure grew 10% compared with 5% growth last year. Clearly, our revenue growth continued to accelerate again this year as investments into our cloud businesses are paying-off. Total cloud services and license support revenue was $35.3 billion, up 21%. Total cloud services by itself were up 50% to $15.9 billion and excluding Cerner, total cloud services were up 29% to $13.6 billion and with revenue growth acceleration in both strategic back-office cloud applications, which were up 27% for the year and cloud infrastructure services, which were up 63% for the year.
Non-GAAP EPS was $5.12 in USD, up 4% in USD and up 10% in constant-currency. The full-year operating margin percentage was 42%. At quarter-end, we had nearly $10.2 billion in cash and marketable securities. In the short-term deferred revenue balance was $9 billion, up 9%. Operating cash flow for the quarter was up 42% at $5.6 billion while free cash flow was up 46% at $3.7 billion. Now, over the last four quarters, operating cash flow was $17.2 billion, up 80% from last year as we're now seeing cash flow benefit from our cloud transformation.
With capital expenditures of $8.7 billion this year, free cash flow was $8.5 billion, up from $5 billion last year and I expect that we will see very good results in our fiscal '24 free cash flow. The remaining performance obligation or RPO balance is $67.9 billion, up 47% in constant-currency, due to strong cloud bookings as well as Cerner. I would also note that organic RPO was 15% in constant-currency as a result of our customers burning through their commitments at a heightened rate. I expect that you will see this number run up as customers reload and new customer sign-up. Approximately 49% of total RPO is expected to be recognized as revenue over the next 12 months.
Capex was $1.9 billion in Q4 and $8.7 billion for fiscal year 2023, as we continue to build capacity for existing bookings and our customers' growing needs. Our investment strategy for adding capacity remains to build many, many identical cloud regions. Our starting point is smaller, which allows us to go where competitors cannot and this continues to be an advantage for us. Given the demand we have and see in our pipeline, I've increased our capex projection and I now expect that fiscal 2024 will be similar to this year's capex.
I also expect our Gen 2 OCI business will have another excellent year of revenue growth as existing centers fill up and new centers come online. As always, we remain careful to pace our investments appropriately and in line with booking trends, which is why our gross margins are up in our cloud. We now have 42 public cloud regions around the world with another seven being built. 12 of these public regions interconnect with Microsoft Azure, giving customers true multi-cloud capabilities. We have many, many cloud customer implementations, 10 dedicated regions and nine more planned. And lastly, we have nine national security regions live with immense demand for more.
As we've said before, we're committed to returning value to our shareholders through technical innovation, strategic acquisitions, stock repurchases, prudent use of debt and the dividend. This year, this fiscal year, we repurchased 17 million shares for a total of $1.3 billion. In addition, we paid out dividends of $3.7 billion over the last 12 months as the Board of Directors declared a quarterly dividend of $0.40 per share.
Now to guidance. And as I've said before, our fundamental principle is to grow EPS, while substantially increasing cloud revenue growth. Let me turn to my guidance for Q1, which I'll review on a non-GAAP basis like everything else. If currency exchange rates remain as they are now, currency should have a 0% to 1% positive effect on total revenue and a $0.01 positive effect on EPS in Q1. However, actual currency impact maybe different. Total revenues for Q1, including Cerner are expected to grow from 7% to 9% in constant-currency and are expected to grow from 8% to 10% in USD at today's exchange rate. Additional upside depends on how fast we can put out even more capacity to our customers.
Total cloud revenue, again excluding Cerner is expected to grow from 28% to 30% in constant-currency and 29% to 31% in USD. Non-GAAP EPS is expected to grow between 8% to 12% and be between $1.11 and $1.15 in constant-currency. Non-GAAP EPS is expected to grow between 9% to 13% and be between $1.12 and $1.16 in USD. My EPS guidance assumes a base tax rate of 19.5%. However, as you see nearly every quarter one-time tax events could cause actual tax rates to vary.
Now, before I finish, let me also give you some initial thoughts on fiscal year 2024. As I described and Larry will elaborate in depth, we are seeing unprecedented demand for our cloud services and especially, RAI [Phonetic] services. As a result, I expect cloud revenue excluding Cerner will continue growing at least similar rates to what we experienced in fiscal 2023, even though our base is much bigger and maybe higher. As our high growth cloud revenues are becoming larger, larger portion of total revenue, we are seeing an acceleration of our total revenue growth. I expect this trend will continue in fiscal 2024 and of course, we also expect to deliver a higher non-GAAP operating margin percentage this coming year as well.
Okay. Before I hand off to Larry, I want to take a moment to thank our customers for making fiscal year 2023 such an enormous success. You've been wonderful partners and we thank you for your trust in us. And I want to thank our employees for being focused on advancing our customers' missions so spectacularly, some of you are new and many of view have been with us for years in fact even decades and I think you all see that our best days are in fact ahead of us.
Thank you for your loyalty and for your incredibly hard work and thank you, Larry, our CTO, our Chairman and our founder for leading with brilliance determination and vision and allowing us to all be part of this incredible journey, which is just getting started. So, thanks, Larry.
And with that, I'll turn it over to you for your comments.
