“As we continue to benefit from economies of scale in the cloud and drive Cerner profitability to Oracle standards, we will not only continue to grow operating income, but we will also expand the operating margin.”

In context

“e quarter were $12.9 billion, up 4% including Cerner, actually up 6% excluding Cerner. Now shifting to margins, the gross margin for cloud services and license support was 78%. This is because of the mix between support and cloud in which cloud is growing much faster than support. Support and SaaS margins are consistent with last year, while IaaS gross margins improved substantially. While we continue to build data center capacity, gross margins go higher as these new cloud regions fill up. We monitor these expenses carefully to ensure gross margin percentages expand as we scale. To this point, the gross profit dollars of cloud services and license support grew 10% in Q2. Non-GAAP operating income was $5.5 billion, up 7% from last year. The operating margin was 43%, up from 41% last year. As we continue to benefit from economies of scale in the cloud and drive Cerner profitability to Oracle standards, we will not only continue to grow operating income, but we will also expand the operating margin. The non-GAAP tax rate for the quarter was 19% and non-GAAP EPS was $1.34 in USD, up 11% in USD, and up 9% in constant currency. GAAP EPS was $0.89 in USD. At quarter-end, we had nearly $8.7 billion in cash and marketable securities and the short-term deferred revenue balance was $8.9 billion, up 1%. Over the last four quarters, operating cash flow was $17 billion, up 13%. And free cash flow was $10.1 billion, up 20%. Capital expenditures were $6.9 billion over the same period as we continue to seek cash flow benefit from our cloud transformation. Our remaining performance obligation, or RPO, is now over $65 billion, with the portion excluding Cerner up 11% in constant currency. We continue to sign large deals with many in the pipeline. Approximately 48% of total RPO is expected to be reco”