Oracle beats quarterly estimates as demand for its cloud services rises
FILE PHOTO: A screen displays the logo and trading information for Oracle Corporation on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., March 30, 2023. REUTERS/Brendan McDermid/File Photo
:Oracle beat estimates for quarterly results and forecast second-quarter revenue growth above estimates on Monday, boosted by growing demand for its cloud offerings, sending its shares up over 9 per cent in trading after the bell.
The Texas-based company's push into the cloud computing market is showing promising results and it has started narrowing the gap with market leaders Microsoft and Amazon Web Services.
Oracle Cloud Infrastructure remains strong and sustained demand for cloud compute is expected, particularly in AI applications.
"Oracle reported a good quarter with 8 per cent constant currency growth and slightly better than expected earnings. The company continues to benefit from a strong cloud business and is investing in that business further," said Gil Luria, senior software analyst at D.A. Davidson.
The company also announced a partnership with AWS, Oracle Database@AWS, that allows customers to access Oracle Autonomous Database and Oracle Exadata Database Service within AWS and the general availability of Oracle Database@Google Cloud.
With the partnership, Oracle is "growing its big database opportunity across Microsoft Azure, Google Cloud, and AWS by making it simpler for customers to connect data across clouds and applications – and driving new revenue opportunities," said Rebecca Wettemann, CEO of research firm Valoir.
Oracle's cloud services revenue rose 21 per cent to $5.6 billion in the first quarter.
Revenue for the quarter ended Aug. 31 stood at $13.31 billion, compared with analysts' estimates of $13.23 billion, according to LSEG data.
Excluding items, the company earned $1.39 per share, above estimates of $1.32 apiece.
Remaining Performance Obligations (RPO), the most popular measure of booked revenue, was up 53 per cent to $99 billion in the quarter.
For the second quarter, Oracle expects revenue to grow between 8 per cent and 10 per cent, the midpoint of which is above analysts' estimate of 8.72 per cent.
