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Oracle (ORCL) Down 3.4% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Oracle (ORCL - Free Report) . Shares have lost about 3.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Oracle due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Oracle reported third-quarter fiscal 2024 non-GAAP earnings of $1.41 per share, which beat the Zacks Consensus Estimate by 2.92% and increased 15.6% year over year. At constant currency (cc), earnings increased 16% year over year.
Revenues rose 7% (up 7% at cc) year over year to $13.28 billion and beat the Zacks Consensus Estimate by 0.04%.
ORCL's continued investment in cloud infrastructure and innovative solutions like the new Ambulatory Clinic Cloud Application Suite positions the company for sustained growth in the dynamic software industry.
Revenues from the Americas increased 7.8% year over year to $8.27 billion and accounted for 62.3% of total revenues. Europe/Middle East/Africa climbed 8.1% year over year to $3.31 billion and contributed 25% of total revenues. The remaining revenues came from Asia Pacific, which gained 2% year over year to $1.69 billion.
Top-Line Details
Cloud services and license support revenues increased 12% year over year (11% at cc) to $10 billion, driven by strategic cloud applications, autonomous database and Oracle Cloud Infrastructure (“OCI”).
Cloud license and on-premise license revenues declined 3% year over year (down 3% at cc) to $1.3 billion.
Cloud revenues (IaaS plus SaaS), including Cerner, came in at $5.1 billion, up 25% year over year (24% at cc).
Cloud Infrastructure (IaaS) revenues came in at $1.8 billion, up 49% year over year (49% at cc).
Cloud Application (SaaS) revenues of $3.3 billion increased 14% year over year (14% at cc).
Fusion Cloud ERP (SaaS) revenues came in at $0.8 billion, up 18% year over year (18% at cc). NetSuite Cloud ERP (SaaS) revenues of $0.8 billion increased 21% year over year (20% at cc).
Hardware revenues were $754 million, down 7% year over year (down 7% at cc). Services revenues decreased 5% (down 5% at cc) to $1.3 billion.
Application subscription revenues, which include product support, were $4.6 billion, up 10% year over year. The company’s strategic back-office SaaS applications now have annualized revenues of $7.4 billion and were up 18%.
Infrastructure subscription revenues, which include license support, were $5.4 billion, up 13%. Infrastructure cloud services revenues were up 49%. Excluding legacy hosting services, Gen 2 infrastructure cloud services revenues soared 52%, with annualized revenues of $6.7 billion. OCI consumption revenues surged 63%.
Operating Details
The non-GAAP total operating expenses increased 3.8% year over year (3% at cc) to $7.48 billion.
The non-GAAP operating income was $5.79 billion, up 15% year over year (up 12% at cc). The non-GAAP operating margin was 43.6%, which expanded 180 basis points on a year-over-year basis.
Balance Sheet & Cash Flow
As of Feb 29, 2024, Oracle had cash & cash equivalents and marketable securities of $9.9 billion compared with $8.69 billion as of Nov 30, 2023.
Operating cash flow and free cash flow amounted to $18.23 billion and $12.25 billion, respectively.
The company’s remaining performance obligation (RPO) is more than $8 billion, with the portion excluding Cerner, which increased 41% at cc. Roughly 43% of total RPO is expected to be recognized as revenues over the next 12 months.
The company repurchased four million shares for a total of $450 million and paid out dividends of $4.4 billion over the last 12 months.
Guidance
For the fourth quarter of fiscal 2024, total revenues, including Cerner, are expected to grow from 4% to 6%. Total revenues, excluding Cerner, are expected to grow in the range of 6-8%. The total cloud revenues, excluding Cerner, are anticipated to grow in the 22-24% band.
The company’s non-GAAP earnings per share are expected between a 2% decline and flat to $1.62-$1.66.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
Currently, Oracle has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions has been net zero. Notably, Oracle has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Oracle (ORCL) Down 3.4% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Oracle (ORCL - Free Report) . Shares have lost about 3.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Oracle due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Oracle Q3 Earnings Beat Estimates, Revenues Rise Y/Y
Oracle reported third-quarter fiscal 2024 non-GAAP earnings of $1.41 per share, which beat the Zacks Consensus Estimate by 2.92% and increased 15.6% year over year. At constant currency (cc), earnings increased 16% year over year.
Revenues rose 7% (up 7% at cc) year over year to $13.28 billion and beat the Zacks Consensus Estimate by 0.04%.
ORCL's continued investment in cloud infrastructure and innovative solutions like the new Ambulatory Clinic Cloud Application Suite positions the company for sustained growth in the dynamic software industry.
Revenues from the Americas increased 7.8% year over year to $8.27 billion and accounted for 62.3% of total revenues. Europe/Middle East/Africa climbed 8.1% year over year to $3.31 billion and contributed 25% of total revenues. The remaining revenues came from Asia Pacific, which gained 2% year over year to $1.69 billion.
Top-Line Details
Cloud services and license support revenues increased 12% year over year (11% at cc) to $10 billion, driven by strategic cloud applications, autonomous database and Oracle Cloud Infrastructure (“OCI”).
Cloud license and on-premise license revenues declined 3% year over year (down 3% at cc) to $1.3 billion.
Cloud revenues (IaaS plus SaaS), including Cerner, came in at $5.1 billion, up 25% year over year (24% at cc).
Cloud Infrastructure (IaaS) revenues came in at $1.8 billion, up 49% year over year (49% at cc).
Cloud Application (SaaS) revenues of $3.3 billion increased 14% year over year (14% at cc).
Fusion Cloud ERP (SaaS) revenues came in at $0.8 billion, up 18% year over year (18% at cc). NetSuite Cloud ERP (SaaS) revenues of $0.8 billion increased 21% year over year (20% at cc).
Hardware revenues were $754 million, down 7% year over year (down 7% at cc). Services revenues decreased 5% (down 5% at cc) to $1.3 billion.
Application subscription revenues, which include product support, were $4.6 billion, up 10% year over year. The company’s strategic back-office SaaS applications now have annualized revenues of $7.4 billion and were up 18%.
Infrastructure subscription revenues, which include license support, were $5.4 billion, up 13%. Infrastructure cloud services revenues were up 49%. Excluding legacy hosting services, Gen 2 infrastructure cloud services revenues soared 52%, with annualized revenues of $6.7 billion. OCI consumption revenues surged 63%.
Operating Details
The non-GAAP total operating expenses increased 3.8% year over year (3% at cc) to $7.48 billion.
The non-GAAP operating income was $5.79 billion, up 15% year over year (up 12% at cc). The non-GAAP operating margin was 43.6%, which expanded 180 basis points on a year-over-year basis.
Balance Sheet & Cash Flow
As of Feb 29, 2024, Oracle had cash & cash equivalents and marketable securities of $9.9 billion compared with $8.69 billion as of Nov 30, 2023.
Operating cash flow and free cash flow amounted to $18.23 billion and $12.25 billion, respectively.
The company’s remaining performance obligation (RPO) is more than $8 billion, with the portion excluding Cerner, which increased 41% at cc. Roughly 43% of total RPO is expected to be recognized as revenues over the next 12 months.
The company repurchased four million shares for a total of $450 million and paid out dividends of $4.4 billion over the last 12 months.
Guidance
For the fourth quarter of fiscal 2024, total revenues, including Cerner, are expected to grow from 4% to 6%. Total revenues, excluding Cerner, are expected to grow in the range of 6-8%. The total cloud revenues, excluding Cerner, are anticipated to grow in the 22-24% band.
The company’s non-GAAP earnings per share are expected between a 2% decline and flat to $1.62-$1.66.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
Currently, Oracle has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions has been net zero. Notably, Oracle has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.