Database giant Oracle has reported strong growth in its emerging cloud platform and infrastructure businesses but failed to achieve the revenue targets in the first quarter of the financial year.
Oracle reported a fiscal first-quarter profit before certain costs, such as stock compensation of 1.03 USD per share on revenue of 9.7 billion USD, up 4 percent YoY. Wall Street analysts estimated an adjusted profit of 97 cents per share on higher revenue of 9.77 billion USD. However, the net income for the quarter was 2.9 billion USD.
Safra Catz, Chief Executive, Oracle, said the company reported excellent results, and it beat revenue guidance in constant currency terms by 100 million USD. The growth of Oracle’s new infrastructure-as-a-service (IaaS) and software-as-a-service (SaaS) businesses accounts for more than 25 percent of the company’s overall revenue and has an annual run rate of 10 billion USD.
She added IaaS and SaaS together are the company’s fastest-growing and highest-margin new business segments. As these two segments continue to grow, they will help expand its overall profit margins and push earnings per share higher.
Highlights of Oracle’s first-quarter financial reports
- Oracle Cloud Infrastructure consumption revenue surged 80 percent in constant-currency terms.
- Oracle’s cloud customer revenue increased 44 percent, and consumption is up 150 percent.
- Enterprise resource planning services rose 32 percent, with Fusion ERP cloud revenue and NetSuite ERP cloud revenue up 28 percent.
- Oracle’s most prominent business division, cloud services, and license support observed sales gain 6 percent in the quarter at 7.4 billion USD. Within that segment, applications, cloud services, and license support pulled in 3.04 billion USD, up 8 percent, while infrastructure cloud services and license support added 4.3 billion USD, up 5 percent.
- The cloud license and on-premises license unit contributed to 813 million USD in revenue, down 8 percent.
- Hardware sales decreased 6 percent, to 763 million USD, and services increased 8 percent to 781 million USD.
Oracle said its guidance for adjusted earnings between 1.09 USD and 1.13 USD per share on 3 to 5 percent revenue growth. Bank of America has partnered with Oracle to go live on Oracle Fusion ERP and consolidating ledgers from 33 countries, which is an important deal win for it.