Oracle (ORCL) Q4 Earnings Report 2024

Oracle Corporation has announced its fourth-quarter earnings report for fiscal year 2024, revealing mixed results that have nonetheless sparked investor interest. Despite falling short of Wall Street expectations, Oracle’s shares jumped as much as 9% in extended trading, buoyed by new cloud deals with Google and OpenAI. The company’s revenue for the quarter increased by 3% year-over-year, reaching $14.29 billion, while net income stood at $3.14 billion.

Oracle’s Q4 earnings report highlighted several key financial metrics. The company’s adjusted earnings per share (EPS) came in at $1.63, slightly below the expected $1.65. Total revenue for the quarter was $14.29 billion, compared to the anticipated $14.55 billion. Despite these misses, Oracle’s cloud services and license support segment generated $10.23 billion in revenue, up 9% from the previous year.

The cloud infrastructure revenue saw a significant increase, rising by 42% to $2.0 billion. However, this was a deceleration from the 49% growth rate in the prior quarter. The cloud and on-premises licenses business contributed $1.84 billion in revenue, down 15% from the previous year. Oracle’s GAAP net income for the quarter was $3.14 billion, or $1.11 per share, down from $3.32 billion, or $1.19 per share, in the year-ago quarter.

Strategic Partnerships and Cloud Growth

One of the highlights of Oracle’s Q4 earnings report was the announcement of new strategic partnerships with Google and OpenAI. Oracle’s database software will be available in five additional Azure data center regions, bringing the total to 15. This expansion is expected to drive further growth in Oracle’s cloud business, which remains smaller than rivals Amazon Web Services and Microsoft Azure but is growing at a faster rate.

The partnership with OpenAI is particularly noteworthy, as it will provide additional computing capacity for training AI large language models in the Oracle Cloud. This move is part of Oracle’s broader strategy to enhance its cloud offerings and capitalize on the growing demand for AI-driven solutions. The company also announced generative artificial intelligence features coming to its Fusion cloud applications for supply chain and human resources.

Future Outlook and Investor Sentiment

Looking ahead, Oracle’s CEO Safra Catz expressed optimism about the company’s future prospects. She highlighted the strong demand for AI training in the Oracle Cloud and the record level sales contracts signed in Q3 and Q4. These contracts drove the total remaining performance obligations (RPO) up 44% to $98 billion. Catz expects continued strong AI demand to push Oracle sales and RPO even higher in fiscal year 2025, resulting in double-digit revenue growth.

Despite the earnings miss, investor sentiment remains positive, driven by the new cloud deals and the company’s strategic focus on AI and cloud growth. Oracle’s stock has gained 18% so far this year, outperforming the S&P 500 index, which is up about 13% over the same period. The company’s ability to secure high-profile partnerships and expand its cloud infrastructure positions it well for future growth.

In conclusion, Oracle’s Q4 earnings report for fiscal year 2024 presents a mixed picture, with some key metrics falling short of expectations. However, the company’s strategic partnerships and focus on AI and cloud growth have generated positive investor sentiment. As Oracle continues to expand its cloud offerings and capitalize on the growing demand for AI-driven solutions, it is well-positioned for future success.

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