Oracle (ORCL) Q4 2024 Earnings Report

oracle Shares rose as much as 11% in prolonged trading on Tuesday after the software maker announced cloud deals with Google and OpenAI, at the same time as fourth-quarter results fell in need of Wall Street expectations.

Here’s how the corporate performed in comparison with the LSEG consensus:

  • Earnings per share: USD 1.63 adjusted versus USD 1.65 expected
  • Revenue: $14.29 billion in comparison with expected $14.55 billion

Oracle’s revenue rose 3% year-on-year within the quarter ended May 31, in accordance with a opinionNet income was $3.14 billion, or $1.11 per share, down from the prior-year quarter ($3.32 billion, or $1.19 per share).

The Cloud Services and License Support segment generated revenue of $10.23 billion, up 9% and barely below the Street Account consensus of $10.29 billion.

The company's cloud and on-premises licensing business contributed $1.84 billion to revenue, down 15% and below the Street Account consensus of $2.09 billion.

Cloud infrastructure revenue was $2.0 billion, up 42%, slowing from the 49% growth rate within the previous quarter. Cloud business stays smaller than competitors Amazon Web Services and Microsoft But Azure is growing faster.

In terms of guidance, Oracle expects first-quarter earnings of $1.31 to $1.35 per share and revenue growth of 5 to 7 percent. Analysts surveyed by LSEG expected adjusted earnings of $1.32 per share and revenue of $13.39 billion, representing growth of seven.6 percent.

Oracle said in a opinion on Tuesday that it might bring its database to Google's Cloud, which shall be available starting in November. Companies can deploy workloads in Google and Oracle Cloud data center regions without incurring data transfer charges, Oracle said.

Last September, Microsoft announced that its customers could use Oracle databases from the Azure cloud.

“Acceptance has actually been really, really strong,” said Clay Magouyrk, Oracle's executive vp of cloud infrastructure, in an interview with CNBC on Tuesday.

The idea is to further increase the provision of Oracle's leading database software.

“We would like to do the same with AWS,” said Larry Ellison, co-founder, chairman and chief technology officer of Oracle, during Oracle's quarterly earnings call on Tuesday. AWS stands for Amazon Web Services is the world's leading public cloud.

Many e-commerce corporations that depend on Oracle's database would love to make use of AI to offer a greater shopping experience and conversational commerce, Thomas Kurian, CEO of Google Cloud and himself a former top executive at Oracle, told CNBC. “It used to be quite complicated for them. Now it's going to be quite simple for them.”

In a separate statement, Oracle said: said It is a partnership with Microsoft and OpenAI to offer additional computing capability.

“Microsoft remains OpenAI's exclusive cloud provider and has partnered with them to complete this deal with Oracle and expand Azure AI capacity,” a Microsoft spokesperson said.

Ellison said on the conference call that OpenAI will leverage Oracle’s cloud infrastructure, including NVIDIA Graphics processors to coach AI models, but in a X-Post Hours later, OpenAI stated that this was not the case.

“The partnership with OCI enables OpenAI to leverage the Azure AI platform on OCI's infrastructure for inference and other purposes,” OpenAI wrote. “All pre-training of our pioneering models continues to occur on supercomputers built in partnership with Microsoft.”

OpenAI added that there have been no changes to its strategic cloud relationship with Microsoft.

Still, Oracle needs to establish servers and other devices that may handle OpenAI's recent work.

“Given the enormous size of our backlog and pipeline, we are working as quickly as possible to expand cloud capabilities,” Oracle CEO Safra Catz said throughout the conference call.

Ellison said the corporate is constructing among the largest data centers on this planet.

“Some are approaching, if I may say so, a gigawatt, which is the equivalent of a fairly large city or a huge AI cloud training data center,” Ellison said.

During the quarter, Oracle said Database software could be available in five additional Azure regions, bringing the overall to fifteen. Oracle also announced generative AI capabilities that shall be integrated into its Fusion Cloud Applications for supply chain and human resources.

Also this quarter, Oracle exited the promoting business, whose revenue had fallen to about $300 million over the course of the fiscal 12 months, Catz said. The database provider had spent billions lately acquiring marketing corporations comparable to BlueKai and Moat, but updates on momentum were rare. In March 2020, Catz told analysts that the Data Cloud unit was reporting low-single-digit revenue growth.

Despite the after-hours move, Oracle shares have gained 18% up to now this 12 months, while the S&P 500 index has gained about 13% over the identical period.

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