In a surprising turn of events, Oracle’s shares skyrocketed by as much as 9% in after-hours trading following the announcement of cloud deals with tech giants Google and OpenAI. This positive development comes on the heels of the company’s fourth-quarter financial results that failed to meet Wall Street’s expectations.
Although Oracle’s earnings per share fell short at $1.63 adjusted compared to the $1.65 expected, the company reported revenue of $14.29 billion, slightly below the anticipated $14.55 billion. Despite a 3% increase in revenue year over year, net income saw a decline to $3.14 billion, or $1.11 per share, from $3.32 billion, or $1.19 per share, in the previous year’s quarter.
Oracle’s cloud services and license support segment saw revenue of $10.23 billion, a 9% increase but slightly lower than the projected $10.29 billion. The cloud and on-premises licenses business contributed $1.84 billion in revenue, marking a 15% decrease from the expected $2.09 billion. Despite this, cloud infrastructure revenue showed significant growth at $2.0 billion, up 42% year over year.
One of the key highlights of the announcement was Oracle’s plans to bring its database to Google’s cloud platform, with availability expected in November. Additionally, OpenAI, a prominent AI research organization, chose Oracle’s cloud for additional computing capacity, having previously relied on Microsoft Azure.
In a bid to expand its market reach, Oracle revealed that its database software would be accessible in five more Azure data center regions, bringing the total to 15. The company also unveiled generative artificial intelligence features to enhance its Fusion cloud applications for supply chain and human resources.
Despite the underwhelming fourth-quarter results, Oracle’s stock has seen an impressive 18% increase year-to-date, outperforming the S&P 500 index’s 13% growth over the same period. The upcoming conference call with analysts will provide further insights into the company’s performance and guidance for the future.
While Oracle may have missed the mark on its financial targets, the strategic cloud partnerships and innovative developments underscore its commitment to staying competitive in the rapidly evolving tech landscape.
Leave a Reply