You know what? Occasionally, you have to appreciate hubris. Occasionally, you have to appreciate confidence. Today Oracle's (ORCL) stock will appreciate precisely because management last night exuded a level of hubris and confidence that was off the charts.
I found it to be pure joy.
Obviously, the market did, too, as the stock levitated throughout the conference call and finished at its high in after-hours trading when the call was completed.
I often tell you how important the conference calls are because they are when you find out how much better or worse than expectations a company may have done, and you get the true forecast, warts and all.
Oracle's a huge company. So to see a stock go up as much as it did in after-hours stands for one thing: an on-the-fly re-rating of a company from value status to growth status. The metamorphosis is totally deserving, giving how the earnings, revenues and forecasts vastly exceeded expectations. Frankly, it was like if the company were simply a different company from the last one that reported, the numbers were that stark.
That's why I say that I didn't mind that co-CEOs Safra Catz and Mark Hurd and chairman Larry Ellison were over the top in their effusiveness of this quarter and the transition. They deserve to celebrate, they deserve the end-zone dance and I, for one, am not throwing any flags, because I think occasionally it's right to crow when you get the transition to the cloud from on-premises computing as smoothly and as fabulously as this company has done.
I can give you all sorts of the hyperbole they dished out. Safra was at her best talking about how this wasn't the culmination of the transition but the beginning of both expanding margins and faster growth, the combination that defines what money managers are looking for.
Mark was on Clouds nine, 10 and 11 when he kept reeling off big brand name new clients and saying that things are terrific. I loved this in-your-face answer to a question about whether the new client queue is still growing: "Our pipeline is big. How confident am I in more cloud bookings than this year? Extremely. Put quotes around extremely. Underline it."
And I loved when Larry did some trash talking about taking on both Salesforce.com (CRM) and Amazon Web (AMZN) services for growth and for better economics for clients respectively. It does help that Oracle has many more cloud verticals, and I don't expect Oracle to pass Amazon as a place to store data but it sure seems like it can keep its clients from migrating there.
The quarter is also a lesson for IBM (IBM) . When I spoke to Ginni Rometty earlier this week about trying to grow its strategic imperatives business while stemming declines in its incumbent business, it's clear that IBM's just not there yet. The transition is taking too long for many. But I could have said the same thing was the case for Oracle.
Nevertheless, when they got it right, after some good acquisitions and excellent selling, you can see what happens. If IBM had this kind of Oracle quarter, it would be at $180, up from $154 in a heartbeat.
After listening to thousands of conference calls in my career I have my own way of judging a quarter: the congratulations-to-question ratio. Nine analysts asked questions about the quarter, eight of them gave some form of congratulations. Only Goldman Sachs' Heather Bellini, one of my absolute favorite analysts, resisted the siren call, or it would have been a perfect game. Normally I would like that impartial, diffident kind of question. Nah, not this time. Come on Heather, join in on the fun!