Oracle’s stock surged by 11.92% during Tuesday morning’s trading session, with the share price climbing 12.3% as of 11:30 a.m. ET, according to S&P Global Market Intelligence.
The boost followed Oracle’s release of its fiscal Q1 results after the market closed on Monday. The company exceeded Wall Street’s projections for both sales and earnings and announced promising new cloud ventures with Amazon and Alphabet.
Cloud Momentum Drives Oracle’s Q1 Success
In the first quarter of its fiscal year, Oracle reported non-GAAP adjusted earnings per share of $1.39 with revenues reaching $13.3 billion. This performance surpassed the consensus analyst estimate by $0.06 per share, with sales coming in $60 million above the expected target.
While sales increased by 6.8% compared to the previous year, other growth indicators were even more impressive. Remaining performance obligations, which represent services contracted but not yet delivered or recorded as sales, climbed 53% year over year to $99 billion. Additionally, total cloud revenue grew 21% year over year, reaching $5.6 billion.
In the cloud sector, infrastructure as a service (IaaS) sales rose 45% year over year to $2.2 billion. Meanwhile, cloud application software-as-a-service (SaaS) experienced a 10% year-over-year growth, totaling $3.3 billion.
Oracle Provides Strong Forecast and Secures New Cloud Alliances
Looking ahead to fiscal Q2, Oracle anticipates a sales increase between 7% and 9% on a constant-currency basis. The company expects total cloud revenue to grow between 23% and 25% on a currency-adjusted basis, with adjusted earnings per share predicted to be between $1.42 and $1.46, reflecting an approximate 8% growth at the midpoint of the guidance range.
In addition to the optimistic outlook, Oracle announced new cloud integrations. In its earnings update, the company revealed a new collaboration with Amazon Web Services (AWS) and introduced a service that enables AWS users to utilize the Oracle Autonomous Database and Oracle Exadata Service. Oracle also spotlighted a similar offering for Alphabet’s Google Cloud infrastructure service.
While Oracle remains a smaller player in the cloud infrastructure sector compared to Amazon, Microsoft, and Alphabet, it is demonstrating encouraging progress. New database integrations with leading IaaS providers could help expand Oracle’s presence in the industry and play a larger role in customers’ multicloud strategies.
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