A month has gone by since the last earnings report for Oracle (ORCL Quick QuoteORCL - Free Report) . Shares have added about 1.2% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Oracle due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Oracle Q4 Earnings Miss Estimates, Revenues Rise Y/Y

Oracle reported fourth-quarter fiscal 2024 non-GAAP earnings of $1.63 per share, which missed the Zacks Consensus Estimate by 1.83% and declined 2.4% year over year. At constant currency (cc), earnings decreased 1% year over year.

Revenues rose 3.3% (up 4% at cc) year over year to $14.28 billion but missed the Zacks Consensus Estimate by 0.61%.

The new offering, Oracle Database@Google Cloud, will be available later this year with the highest level of Oracle database and network performance, along with feature and pricing parity with Oracle Cloud Infrastructure (“OCI”).

Revenues from the Americas increased 4.3% year over year to $8.94 billion and accounted for 62.6% of total revenues. Europe/Middle East/Africa climbed 2.4% year over year to $3.53 billion and contributed 24.8% of total revenues. The remaining revenues came from Asia Pacific, which remained flat year over year at $1.8 billion.

Top-Line Details

Cloud services and license support revenues increased 9% year over year (10% at cc) to $10.23 billion, driven by strategic cloud applications, autonomous database and OCI.

Cloud license and on-premise license revenues declined 15% year over year (down 14% at cc) to $1.83 billion.

Cloud revenues (IaaS plus SaaS), including Cerner, came in at $5.3 billion, up 20% year over year and in cc.

Cloud Infrastructure (IaaS) revenues came in at $2 billion, up 42% year over year and in cc.

Cloud Application (SaaS) revenues of $3.3 billion increased 10% year over year and in cc.

Fusion Cloud ERP (SaaS) revenues came in at $0.8 billion, up 14% year over year and in cc. NetSuite Cloud ERP (SaaS) revenues of $0.8 billion increased 19% year over year and in cc.

Hardware revenues were $842 million, down 1% year over year (flat in cc). Services revenues decreased 6% (down 6% at cc) to $1.37 billion.

Application subscription revenues, which include product support, were $4.6 billion, up 6% year over year. The company’s strategic back-office SaaS applications now have annualized revenues of $7.7 billion and were up 16%.

Infrastructure subscription revenues, which include license support, were $5.6 billion, up 13%. Infrastructure cloud services revenues were up 42%. Excluding legacy hosting, OCI Gen2 infrastructure cloud services grew 44%, with annualized revenues of $7.4 billion.

Database subscription revenues, which include database license support, were up 6% and now have annualized revenues of $2 billion, driven by cloud database services, which were up 26%.

Operating Details

The non-GAAP total operating expenses decreased 1% year over year (down 1% at cc) to $7.61 billion.

The non-GAAP operating income was $6.66 billion, up 8% year over year (up 9% at cc). The non-GAAP operating margin was 47%, which expanded 235 basis points on a year-over-year basis.

Balance Sheet & Cash Flow

As of May 31, 2024, Oracle had cash & cash equivalents and marketable securities of $10.6 billion compared with $9.9 billion as of Feb 29, 2024.

Operating cash flow and free cash flow amounted to $18.67 billion and $11.8 billion, respectively.

The company’s remaining performance obligation (RPO) is more than $98 billion, up 44% in constant currency, and the portion excluding Cerner, was up 60%.

Roughly 39% of total RPO is expected to be recognized as revenues over the next 12 months.

The company purchased 1.25 million shares for a total of $150 million. The board of directors declared a quarterly cash dividend of 40 cents per share of outstanding common stock. This dividend will be paid to stockholders of record as of the close of business on Jul 11, 2024, with a payment date of Jul 25, 2024.

Guidance

For the first quarter of fiscal 2025, total revenues are expected to grow from 6% to 8% in cc and using the currency situation as it is now, they are expected to grow from 5% to 7% in USD. If currency exchange rates remain the same as they are now, the currency is expected to have a negative 1% effect on revenues and either 1 cent or 2 cents negative on EPS in the fiscal first quarter.

Total cloud revenues are expected to grow from 21% to 23% in cc and 20% to 22% in USD. Non-GAAP EPS is expected to grow between 11% and 15% and in the band of $1.33-$1.37 in cc. Non-GAAP EPS is expected to grow between 10% and 14% and in the range of $1.31-$1.35 in USD.

The company expects fiscal 2025 cloud infrastructure services to grow faster than the 50% reported in 2024. Capital expenditure is expected to be double compared with the figure in fiscal 2024.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month.

VGM Scores

At this time, Oracle has an average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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.