Oracle (NYSE:ORCL) has announced its first-quarter fiscal 2024 non-GAAP earnings, revealing earnings of $1.19 per share. This figure not only exceeded the Zacks Consensus Estimate by 4.39% but also marked a substantial 15.5% year-over-year increase. In constant currency (cc) terms, earnings grew by an impressive 14% year over year.
The company also reported robust revenue growth, with revenues surging 8.8% (or 8% at cc) year over year to reach $12.45 billion
Breaking down the regional performance, revenues from the Americas showed a significant increase of 9% year over year, totaling $7.84 billion and contributing 63% to the overall revenue. The Europe/Middle East/Africa region recorded a noteworthy climb of 11.7% year over year, amounting to $3.005 billion, which represented 24.1% of total revenues. The remaining revenues were derived from Asia Pacific, which posted a 2.9% year-over-year increase, reaching $1.6 billion.
- Cloud services and license support revenues witnessed a substantial boost of 13% year over year (12% at cc), reaching $9.5 billion. This growth was driven by a strong demand for cloud applications, autonomous databases, and Gen 2 cloud infrastructure services.
- In contrast, cloud license and on-premise license revenues declined by 10% year over year (11% at cc), totaling $0.8 billion.
However, it’s worth noting that Oracle reported a slowdown in cloud sales growth during the first quarter of fiscal 2024, which dampened enthusiasm about the company’s expansion efforts in the competitive market. Consequently, the company’s shares experienced a decline of approximately 9.2% during extended trading.
Cloud revenues (including Infrastructure as a Service (IaaS) and Software as a Service (SaaS)), incorporating Cerner, reached $4.6 billion, marking a 30% year-over-year increase (or 29% at cc), although this was notably lower than the 54% surge seen in the previous quarter.
- Cloud Infrastructure (IaaS) revenues surged by 66% year over year (or 64% in cc) to reach $1.5 billion.
- Cloud Application (SaaS) revenues totaled $3.1 billion, reflecting a 17% year-over-year increase (or 17% at cc).
- Fusion Cloud ERP (SaaS) revenues amounted to $0.8 billion, up 21% year over year (or 20% at cc).
- NetSuite Cloud ERP (SaaS) revenues reached $0.7 billion, marking a 21% year-over-year increase (or 21% at cc).
- Hardware revenues, however, experienced a decline of 6% year over year (or 8% at cc), amounting to $714 million.
- Services revenues showed a 2% increase (or 1% at cc), reaching $1.38 billion.
Oracle’s Gen 2 Cloud has secured a significant contract worth $4 billion from generative AI customers, driven by its exceptional performance and cost-efficiency in running generative AI workloads. The company also announced the launch of a generative AI cloud service for enterprise customers and an extension of its collaboration with VMware, Inc. (NYSE:VMW) to support workload modernization through Oracle Cloud Infrastructure (OCI).
Oracle’s strong financial position is reflected in its balance sheet, boasting cash and cash equivalents of $12.08 billion as of August 31, 2023, compared to $10.19 billion in May 2023. Operating cash flow and free cash flow stood at $17.74 billion and $9.45 billion, respectively.
Guidance for the second quarter of fiscal 2024 indicates anticipated revenue growth between 3% and 5% at cc (5% and 7% in U.S. dollars), with total cloud growth (excluding Cerner) expected to range from 27% to 29% at cc (29% to 31% in U.S. dollars). Non-GAAP earnings are projected to grow between 7% and 11%, resulting in an expected earnings range of $1.30 to $1.34 per share in U.S. dollars.
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