TLDR:
- Oracle beat quarterly estimates with revenue of $13.31 billion, up 8% year-over-year
- Cloud services revenue rose 21% to $5.6 billion
- Oracle announced partnerships to offer database services on AWS and Google Cloud
- Cloud infrastructure revenue grew 45% to $2.2 billion
- Oracle expects 8-10% revenue growth next quarter
Oracle Corporation reported better-than-expected financial results for its fiscal first quarter, driven by robust growth in its cloud services.
The Texas-based tech giant saw its revenue increase by 8% year-over-year to $13.31 billion, surpassing analyst estimates of $13.23 billion. This performance sent Oracle’s shares up over 9% in after-hours trading.
The company’s cloud services and license support business, which includes its flagship database offerings, generated $10.52 billion in revenue, marking a 10% increase from the previous year.
This segment outperformed market expectations, highlighting Oracle’s successful push into the cloud computing market.
Oracle’s cloud infrastructure revenue showed particularly impressive growth, surging 45% to reach $2.2 billion. This acceleration from the 42% growth seen in the prior quarter indicates Oracle’s strengthening position in the competitive cloud market. CEO Safra Catz noted that demand for cloud services continues to outstrip supply, a positive indicator for future growth.
The company’s overall cloud services revenue rose 21% to $5.6 billion, demonstrating the increasing adoption of Oracle’s cloud offerings. This growth is partly attributed to rising demand for cloud compute, especially in AI applications.
Oracle announced new partnerships with major cloud providers. The company will now offer its database services on Amazon Web Services (AWS) and Google Cloud.
These collaborations allow Oracle to tap into a broader customer base and create new revenue streams by making it easier for customers to connect data across different cloud platforms.
Looking ahead, Oracle provided an optimistic outlook for the current quarter. The company expects revenue growth between 8% and 10%, with the midpoint surpassing analyst estimates of 8.72%. This forecast suggests continued momentum in Oracle’s cloud business.
Oracle’s co-founder and CTO, Larry Ellison, shared ambitious plans for the company’s data center expansion. He revealed that Oracle is designing a data center that will use over a gigawatt of power, relying on three modular nuclear reactors. Ellison also mentioned plans to potentially increase the number of data centers from the current 162 to as many as 2,000 in the future, with sizes ranging from 50 kilowatts to over a gigawatt.
The company’s Remaining Performance Obligations (RPO), a measure of booked revenue, grew by 53% to $99 billion in the quarter. This metric indicates strong future revenue potential for Oracle.
Oracle’s successful quarter and positive outlook reflect its growing strength in the cloud computing market.
The company’s strategic partnerships and investments in infrastructure position it to compete more effectively with market leaders like Microsoft and Amazon Web Services.
