Oracle Misses Quarterly Results Estimates on Stiff Cloud Competition

Reuters12-10

(Reuters) - Oracle missed Wall Street expectations for second-quarter revenue and adjusted profit on Monday, hit by stiff competition and softer-than expected spending on its database and cloud services as enterprise clients slash budgets amid an uncertain economy.

Shares of the company were down over 7% in extended trading.

Despite seeing healthy growth in its cloud segment, Oracle competes with cloud heavyweights such as Microsoft and Amazon, which have established a large presence in the field.

Wall Street expectations for AI-linked firms have been high as they bet on the technology to be a strong growth driver in the future. The company's shares have soared over 80% so far this year.

Oracle reported revenue of $14.06 billion in the second quarter, up 9% from a year ago, but below estimates of $14.11 billion, as per data compiled by LSEG.

To gain market share in the competitive environment, Oracle has partnered with these so-called cloud hyperscalers by embedding its database architecture within Microsoft's Azure and Amazon's web clouds, allowing customers to connect data across various applications.

The company's cloud services and license revenue jumped 12% to $10.81 billion in the quarter ended Nov. 30.

Oracle's chief executive Safra Catz said total Oracle cloud revenue should top $25 billion in this fiscal year, as it makes hefty investments into upgrading its cloud architecture and integrating AI into it.

On an adjusted basis, the company earned $1.47 per share, compared with estimates of a profit of $1.48 per share.

Remaining performance obligations, the most popular measure of booked revenue, rose 50% to $97 billion in the second quarter.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

  • neo26000
    12-10
    neo26000
    Using the cloud is like playing blackjack without knowing the optimal strategy or using card counting. Without understanding how to efficiently manage your resources, you will constantly face escalating costs. Even if you learn to optimize your usage, the uncertainty of your bills will still keep you on edge, requiring constant monitoring. Much like a blackjack player who isn't playing smartly, you might end up paying more than necessary if you're not careful. Proper knowledge and optimization are crucial to avoid overpaying and ensure your cloud usage remains cost-effective in the long run.
Leave a comment
1
1