The Oracle Corp (NYSE: ORCL) stock price plunged 10.3% after announcing the financial results for the first quarter of its 2024 financial year. The company generated total revenues of $12.5 billion, up 9% in US dollars and 8% in constant currency.
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The firm also reported that its cloud business revenues were $4.6 billion, up 30% in US dollars and 29% in constant currency. The cloud business comprises the Cloud Infrastructure (IaaS), which generated $1.5 billion in revenues and Cloud Application (SaaS), which generated sales worth $3.1 billion.
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Oracle also has the Fusion Cloud ERP (SaaS) system, which garnered sales worth $0.8 billion, up 21% in USD and 20% in constant currency. Lastly, the firm has its NetSuite Cloud ERP (SaaS) division, which generated $0.7 billion in revenue, up 21% in USD and 21% in constant currency.
The company expects its total revenues to grow from 5%-7% in today’s currency rates, dropping to 3-5% in constant currency terms. The firm expects its cloud revenue to grow at 28% in constant currency, below the 29% reported for Q1, which could have triggered a negative response from investors.
Oracle’s management attributed the soft cloud outlook to the accelerated transition of Cerner (NASDAQ: CERN) to the cloud.
The Oracle CEO, Safra Catz, said: “Oracle Cloud Infrastructure revenue grew 66% in Q1, much faster than our hyperscale cloud infrastructure competitors. Total cloud services revenue, Infrastructure plus Applications, grew 30% to $4.6 billion in the quarter. Oracle Cloud Services plus License Support revenue now accounts for 77% of Oracle’s total revenue. This highly predictable, highly profitable recurring revenue stream—combined with continued expense discipline—drove 16% growth in non-GAAP earnings per share, 21% growth in free cash flow, and $7.0 billion in operating cash flow in the Q1.”
Larry Ellison, Oracle Chairman and CTO, said: “Is Generative AI the most important new computer technology ever? Maybe! Self-driving cars, molecular drug design, voice user interfaces—billions of dollars are being invested in AI. As of today, AI development companies have signed contracts to purchase more than $4 billion of capacity in Oracle’s Gen2 Cloud. That’s twice as much as we had booked at the end of Q4.”
Oracle share price.
The Oracle stock price plunged 10.27% to trade at $113.70 from its Monday closing price of $126.71.
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