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Oracle (ORCL - Free Report) reported first-quarter fiscal 2025 non-GAAP earnings of $1.39 per share, which beat the Zacks Consensus Estimate by 5.3% and increased 16.8% year over year. At constant currency (cc), earnings increased 18% year over year.
Revenues rose 6.9% (up 8% at cc) year over year to $13.3 billion and beat the Zacks Consensus Estimate by 0.68%, driven by continued momentum from its Oracle Cloud Infrastructure (“OCI”) business, including from winning cloud-computing contracts from AI-focused startups.
Shares of ORCL gained nearly 9% in extended trading after the enterprise software company posted better-than-expected fiscal first-quarter results and announced a multi-cloud partnership with Amazon (AMZN - Free Report) -owned Amazon Web Services (“AWS”).
The new offering, Oracle Database@AWS, allows customers to access Oracle Autonomous Database on dedicated infrastructure and Oracle Exadata Database Service within AWS. Oracle Database@AWS will provide customers with a unified experience between OCI and AWS, offering simplified database administration, billing and unified customer support.
In addition, customers will have the ability to seamlessly connect enterprise data in their Oracle Database to applications running on Amazon Elastic Compute Cloud, AWS Analytics services, or AWS' advanced AI and machine learning (ML) services, including Amazon Bedrock. Revenues from the Americas increased 6.8% year over year to $8.37 billion and accounted for 62.9% of total revenues. Europe/Middle East/Africa climbed 7.4% year over year to $3.22 billion and contributed 24.3% of total revenues. The remaining revenues came from Asia Pacific, which increased 6.2% year over year to $1.7 billion.
Oracle Corporation Price, Consensus and EPS Surprise
Cloud services and license support revenues increased 10% year over year (9% at cc) to $10.51 billion, driven by strategic cloud applications, autonomous database and OCI. Cloud license and on-premise license revenues gained 7% year over year (8% at cc) to $870 million.
Total cloud revenues (SaaS plus IaaS) were up 22% at $5.6 billion. Cloud Infrastructure (IaaS) revenues came in at $2.2 billion, up 45% year over year and at cc. Cloud Application (SaaS) revenues of $3.5 billion increased 10% year over year and at cc.
Fusion Cloud ERP (SaaS) revenues came in at $0.9 billion, up 16% year over year and 17% at cc. NetSuite Cloud ERP (SaaS) revenues of $0.9 billion increased 20% year over year and at cc. Hardware revenues were $655 million, down 8% year over year (down 8% in cc). Services revenues decreased 9% (down 8% at cc) to $1.26 billion.
Application subscription revenues, which include product support, were $4.8 billion, up 7% year over year. The company’s strategic back-office SaaS applications now have annualized revenues of $8.2 billion and were up 18%. Infrastructure subscription revenues, which includes license support, were $5.8 billion and up 14%. Infrastructure cloud services revenues increased 46% and were up 49%, excluding legacy hosting services.
The company’s infrastructure cloud services now have annualized revenues of $8.6 billion. OCI consumption revenues increased 56% and demand continued to outstrip supply. Cloud database services, which were up 23%, now have annualized revenues of $2.1billion. Database subscription revenues, which include database license support, were up 4%. Software license revenues were up 8% to $870 million, including Java, which saw excellent growth.
Operating Details of Oracle
The non-GAAP total operating expenses increased 3% year over year (3% at cc) to $7.59 billion.
The non-GAAP operating income was $5.7 billion, up 13% year over year (up 14% at cc). The non-GAAP operating margin was 43%, which expanded 228 basis points on a year-over-year basis.
ORCL’s Balance Sheet & Cash Flow
As of Aug. 31, 2024, Oracle had cash & cash equivalents and marketable securities of $10.9 billion compared with $10.6 billion as of May 31, 2024.
Operating cash flow and free cash flow amounted to $19.12 billion and $11.27 billion, respectively.
The company’s remaining performance obligation (RPO) is more than $99 billion, up 52% at constant currency. Cloud RPO grew more than 80% and now represents nearly three-fourths of total RPO.
Roughly 38% of total RPO is expected to be recognized as revenues over the next 12 months, which reflects the growing trend of customers wanting larger and longer contracts as they see how Oracle Cloud services are benefiting their businesses.
The company purchased 1.1 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.
Guidance
For the second quarter of fiscal 2025, total revenues are expected to grow in the band of 7-9% in constant currency and between 8% and 10% in USD at today's exchange rate. Total cloud revenues are expected to grow in the range of 23-25% at constant currency and 24-26% in USD.
Non-GAAP EPS is expected to grow between 6% and 10% at cc. Non-GAAP EPS is expected to grow between 8 cents and 12 cents. Non-GAAP EPS is projected in the range of $1.42-$1.46 at constant currency and between $1.45 and $1.49 in USD.
Zacks Rank & Other Stocks to Consider
Oracle currently carries a Zacks Rank #2 (Buy). Shares of ORCL have gained 32.7% year to date.
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Oracle Q1 Earnings Surpass Estimates, Revenues Increase Y/Y
Oracle (ORCL - Free Report) reported first-quarter fiscal 2025 non-GAAP earnings of $1.39 per share, which beat the Zacks Consensus Estimate by 5.3% and increased 16.8% year over year. At constant currency (cc), earnings increased 18% year over year.
Revenues rose 6.9% (up 8% at cc) year over year to $13.3 billion and beat the Zacks Consensus Estimate by 0.68%, driven by continued momentum from its Oracle Cloud Infrastructure (“OCI”) business, including from winning cloud-computing contracts from AI-focused startups.
Shares of ORCL gained nearly 9% in extended trading after the enterprise software company posted better-than-expected fiscal first-quarter results and announced a multi-cloud partnership with Amazon (AMZN - Free Report) -owned Amazon Web Services (“AWS”).
The new offering, Oracle Database@AWS, allows customers to access Oracle Autonomous Database on dedicated infrastructure and Oracle Exadata Database Service within AWS. Oracle Database@AWS will provide customers with a unified experience between OCI and AWS, offering simplified database administration, billing and unified customer support.
In addition, customers will have the ability to seamlessly connect enterprise data in their Oracle Database to applications running on Amazon Elastic Compute Cloud, AWS Analytics services, or AWS' advanced AI and machine learning (ML) services, including Amazon Bedrock. Revenues from the Americas increased 6.8% year over year to $8.37 billion and accounted for 62.9% of total revenues. Europe/Middle East/Africa climbed 7.4% year over year to $3.22 billion and contributed 24.3% of total revenues. The remaining revenues came from Asia Pacific, which increased 6.2% year over year to $1.7 billion.
Oracle Corporation Price, Consensus and EPS Surprise
Oracle Corporation price-consensus-eps-surprise-chart | Oracle Corporation Quote
Top-Line Details
Cloud services and license support revenues increased 10% year over year (9% at cc) to $10.51 billion, driven by strategic cloud applications, autonomous database and OCI. Cloud license and on-premise license revenues gained 7% year over year (8% at cc) to $870 million.
Total cloud revenues (SaaS plus IaaS) were up 22% at $5.6 billion. Cloud Infrastructure (IaaS) revenues came in at $2.2 billion, up 45% year over year and at cc. Cloud Application (SaaS) revenues of $3.5 billion increased 10% year over year and at cc.
Fusion Cloud ERP (SaaS) revenues came in at $0.9 billion, up 16% year over year and 17% at cc. NetSuite Cloud ERP (SaaS) revenues of $0.9 billion increased 20% year over year and at cc. Hardware revenues were $655 million, down 8% year over year (down 8% in cc). Services revenues decreased 9% (down 8% at cc) to $1.26 billion.
Application subscription revenues, which include product support, were $4.8 billion, up 7% year over year. The company’s strategic back-office SaaS applications now have annualized revenues of $8.2 billion and were up 18%. Infrastructure subscription revenues, which includes license support, were $5.8 billion and up 14%. Infrastructure cloud services revenues increased 46% and were up 49%, excluding legacy hosting services.
The company’s infrastructure cloud services now have annualized revenues of $8.6 billion. OCI consumption revenues increased 56% and demand continued to outstrip supply. Cloud database services, which were up 23%, now have annualized revenues of $2.1billion. Database subscription revenues, which include database license support, were up 4%. Software license revenues were up 8% to $870 million, including Java, which saw excellent growth.
Operating Details of Oracle
The non-GAAP total operating expenses increased 3% year over year (3% at cc) to $7.59 billion.
The non-GAAP operating income was $5.7 billion, up 13% year over year (up 14% at cc). The non-GAAP operating margin was 43%, which expanded 228 basis points on a year-over-year basis.
ORCL’s Balance Sheet & Cash Flow
As of Aug. 31, 2024, Oracle had cash & cash equivalents and marketable securities of $10.9 billion compared with $10.6 billion as of May 31, 2024.
Operating cash flow and free cash flow amounted to $19.12 billion and $11.27 billion, respectively.
The company’s remaining performance obligation (RPO) is more than $99 billion, up 52% at constant currency. Cloud RPO grew more than 80% and now represents nearly three-fourths of total RPO.
Roughly 38% of total RPO is expected to be recognized as revenues over the next 12 months, which reflects the growing trend of customers wanting larger and longer contracts as they see how Oracle Cloud services are benefiting their businesses.
The company purchased 1.1 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.
Guidance
For the second quarter of fiscal 2025, total revenues are expected to grow in the band of 7-9% in constant currency and between 8% and 10% in USD at today's exchange rate. Total cloud revenues are expected to grow in the range of 23-25% at constant currency and 24-26% in USD.
Non-GAAP EPS is expected to grow between 6% and 10% at cc. Non-GAAP EPS is expected to grow between 8 cents and 12 cents. Non-GAAP EPS is projected in the range of $1.42-$1.46 at constant currency and between $1.45 and $1.49 in USD.
Zacks Rank & Other Stocks to Consider
Oracle currently carries a Zacks Rank #2 (Buy). Shares of ORCL have gained 32.7% year to date.
Some other top-ranked stocks from the broader Computer and Technology sector are Nova Ltd. (NVMI - Free Report) and Manhattan Associates (MANH - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here. Shares of Nova and Manhattan Associates have gained 42.7% and 18.5% year to date, respectively.