Oracle’s quarterly earnings report for the fiscal third quarter ending Feb. 29 surpassed Wall Street’s expectations, leading to a 13% increase in shares during extended trading. The company reported earnings per share of $1.41 adjusted, exceeding the expected $1.38, and revenue of $13.28 billion compared to the $13.3 billion estimate. For the upcoming fiscal fourth quarter, Oracle anticipates earnings of $1.62 to $1.66 per share, slightly lower than the anticipated $1.64 in adjusted earnings. Revenue growth is projected to fall between 4% and 6% over sales of $13.8 billion from last year. Despite this, Oracle CEO Safra Catz declared the company’s commitment to achieving $65 billion in sales by fiscal 2026, expressing confidence in surpassing these goals.
Oracle’s cloud services and license support segment experienced a notable 12% sales increase, reaching $9.96 billion, slightly surpassing StreetAccount consensus projections of $9.94 billion. The company attributed this growth to the high demand for its artificial intelligence servers. Moreover, Oracle’s cloud revenue, part of the cloud services unit, saw a substantial 25% year-over-year increase to $5.1 billion. Catz highlighted the addition of significant new cloud infrastructure deals during the quarter, signaling a promising future for Oracle’s cloud services.
Challenges in Other Business Units
While Oracle’s cloud services thrived, its cloud license and on-premise sales decreased by 3% to $1.26 billion, narrowly surpassing StreetAccount forecasts. Additionally, hardware revenue dropped by 7% to $754 million, and sales in the services division declined by 5% to $1.31 billion, both falling short of expectations. Despite these setbacks, Oracle’s overall performance remained strong, with a 7% revenue rise from $12.4 billion the previous year, and a 27% increase in net income to $2.4 billion, or 85 cents per share.
Looking ahead, Oracle anticipates continued revenue growth in the fiscal fourth quarter and beyond. Catz expressed confidence in the company’s momentum, hinting that previously set goals may prove to be too conservative based on their performance. The company’s commitment to innovation, as seen in the robust demand for cloud services and AI servers, positions Oracle for further success in the competitive tech landscape. With a strong leadership team and a clear vision for future growth, Oracle appears well-positioned to exceed expectations and deliver sustained value to its shareholders.
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