Oracle Although fourth-quarter results fell short of Wall Street expectations, the software maker’s shares rose 11% in after-hours trading on Tuesday after the software maker announced cloud deals with Google and OpenAI.
Here’s how the company compares to the LSEG consensus:
- Earnings per share: Adjusted $1.63, expected $1.65
- income: US$14.29 billion, expected US$14.55 billion
Oracle’s revenue rose 3% annually in the quarter ended May 31, according to the company. statement. Net income was $3.14 billion, or $1.11 a share, down from $3.32 billion, or $1.19 a share, a year earlier.
The cloud services and licensing support segment generated $10.23 billion in revenue, up 9% and slightly below StreetAccount’s forecast of $10.29 billion.
The company’s cloud and on-premises licensing businesses contributed $1.84 billion in revenue. The figure fell 15% and was below StreetAccount’s consensus forecast of $2.09 billion.
Cloud infrastructure revenue reached $2 billion, growing 42%, slower than the 49% growth in the previous quarter. Cloud business still smaller than rivals Amazon Internet services and Microsoft Azure but is growing faster.
In terms of guidance, Oracle expects fiscal first-quarter earnings of $1.31 to $1.35 per share and revenue growth of 5% to 7%. Analysts polled by London Stock Exchange Group (LSEG) expected adjusted earnings of $1.32 per share on revenue of $13.39 billion, which would imply growth of 7.6%.
Oracle said in an article statement On Tuesday, it will bring its database to Google’s Cloud, will be launched in November. Oracle said organizations will be able to deploy workloads in Google and Oracle Cloud data center regions without paying data transfer fees.
Last September, Microsoft said customers would be able to use Oracle databases in the Azure cloud.
“The adoption rate is actually very, very high,” Clay Magouyrk, Oracle’s executive vice president of cloud infrastructure, told CNBC on Tuesday.
The idea is to further expand the usability of Oracle’s flagship database software.
“We want to do the same thing with AWS,” Oracle co-founder, chairman and technology chief Larry Ellison said on Oracle’s Tuesday earnings call. AWS, for Amazon Web Services is the world’s leading public cloud.
Thomas Kurian, CEO of Google Cloud and a former senior executive at Oracle, told CNBC that many e-commerce companies that rely on Oracle databases hope to use artificial intelligence to provide better shopping experiences and conversational commerce. “It used to be quite complicated for them to do that. Now it’s going to be trivial for them to do it.”
Oracle said in a separate statement explain it is working with Microsoft and OpenAI provide complementary computing power.
A Microsoft spokesperson said: “Microsoft remains the exclusive cloud provider for OpenAI and has worked with them to reach this agreement with Oracle to expand Azure AI capabilities.”
But now OpenAI will also leverage Oracle Cloud Infrastructure, including Nvidia Ellison said on the earnings call that graphics processing units can train artificial intelligence models.
“Given the size of our backlog and pipeline, we are building cloud capacity as quickly as possible,” Oracle CEO Safra Catz said on the call.
Ellison said the company is building some of the largest data centers in the world.
“I would say some are closer to a gigawatt, which is a sizable city or a giant artificial intelligence cloud training data center,” Allison said.
Oracle said this quarter Database software Will be available in 5 additional Azure regions, bringing the total to 15. Integrated cloud applications For supply chain and human resources.
Additionally, Oracle dropped its advertising business this quarter, which has seen its revenue drop to about $300 million this fiscal year, Katz said. The database provider has spent billions in the past few years acquiring marketing companies like BlueKai and Moat, but has provided few updates on its momentum. In March 2020, Catz told analysts that the data cloud unit’s revenue growth was only in the low single digits.
Despite the after-hours moves, Oracle shares are up 18% year to date, while the S&P 500 is up about 13% over the same period.
watch: Trade Tracker: Jim Lebenthal buys more Oracle, Bill Baruch buys some SPY put spreads and sells AMD
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