One of the world’s largest independent enterprise software companies, Oracle (ORCL, Financial) maintains a sticky business with high retention rates among its customer base of multinational blue-chip compa-nies. A significant portion of its profits come from maintenance fees, creating an annuity-like stream of recurring cash flows. Like many companies not born in the cloud, Oracle has faced doubts about its ability to successfully make the transition to a business based on cloud and software as a service (SaaS). Oracle reported Cloud Infrastructure revenue growth of more than 100% for its most recent quarter, helping drive the company’s biggest top-line growth increase in a decade.5 Oracle is still early in its business model transition compared to the larger players in the market, like Microsoft.
From First Eagle Investment (Trades, Portfolio) Fund of America's third-quarter 2021 commentary.
