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Oracle Despite fourth-quarter results missing Wall Street expectations, shares rose as much as 11% in after-hours trading on Tuesday after the company announced cloud deals with Google and OpenAI.
Here’s how the company performed compared to the LSEG consensus:
- Earnings per share: Adjusted: $1.63 (expected: $1.65)
- Revenue: $14.29 billion (forecast: $14.55 billion)
Oracle’s revenue increased 3% year over year in the quarter ended May 31. statementNet income was $3.14 billion, or $1.11 per share, down from $3.32 billion, or $1.19 per share, a year earlier.
Revenue from the Cloud Services and License Support segment was $10.23 billion, up 9% and slightly below the StreetAccount consensus estimate of $10.29 billion.
Revenue from the company’s cloud and on-premise licensing business was $1.84 billion, down 15% and below the Street accounts’ consensus estimate of $2.09 billion.
Cloud infrastructure revenue was $2 billion, up 42%, but slowing from 49% growth in the previous quarter, and the cloud business remains smaller than its competitors. Amazon Web Services and Microsoft Azure, however, is growing fast.
In terms of guidance, Oracle expects first-quarter earnings per share of $1.31 to $1.35, with revenue up 5 to 7 percent. On an adjusted basis, analysts surveyed by LSEG expect earnings of $1.32 per share and revenue of $13.39 billion, which would imply a 7.6 percent increase.
Oracle is statement Database on Tuesday Google The cloud is expected to be available in November, and Oracle said it will allow businesses to deploy workloads across Google and Oracle cloud data center regions without paying data transfer fees.
Microsoft announced last September that it would enable customers to run Oracle databases from the Azure cloud.
“The reality is, adoption is very strong,” Clay McGuire, executive vice president of cloud infrastructure at Oracle, said in an interview with CNBC on Tuesday.
The aim is to further broaden the availability of Oracle’s flagship database software.
“We want to do the same thing with AWS,” Oracle co-founder, chairman and chief technology officer Larry Ellison said during Oracle’s earnings call on Tuesday. Amazon Web Services is the world’s leading public cloud.
Many e-commerce companies that rely on Oracle’s database want to adopt AI to provide better shopping experiences and conversational commerce, former Oracle executive and Google Cloud CEO Thomas Kurian told CNBC. “Before, it was very complicated for them to do that. Now it’s going to be easy for them.”
In a separate statement, Oracle said: Said Partnering with Microsoft and OpenAI will provide complementary computing power.
“Microsoft remains OpenAI’s exclusive cloud provider and has partnered with Oracle on this agreement to extend the capabilities of Azure AI,” a Microsoft spokesperson said.
However, OpenAI also leverages Oracle’s cloud infrastructure, NVIDIA During the earnings call, Ellison said the company will use graphics processing units to train its AI models.
“We are working as quickly as we can to build out cloud capacity given our significant backlog and pipeline,” Oracle CEO Safra Catz said on a conference call.
Ellison said the company is building some of the largest data centers in the world.
“Some of them are approaching, dare I say it, a gigawatt, which is the equivalent of a sizeable city or a huge AI cloud training data center,” Ellison said.
This quarter, Oracle Database software It will now be available in five more Azure regions, bringing the total to 15. Oracle also announced that generative AI capabilities are coming to Azure. Fusion Cloud Applications For supply chain and human resources.
Additionally, Oracle exited its advertising business during the quarter, whose revenue fell to about $300 million during the fiscal year, Catz said. The database vendor has spent billions of dollars acquiring marketing companies such as BlueKai and Moat over the past few years, but has rarely issued updates on its momentum. Catz told analysts in March 2020 that revenue from its data cloud division is expected to grow in the low single digits.
Even in after-hours trading, Oracle shares are up 18% so far this year, while the S&P 500 index is up about 13% in the same period.
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