Oracle Corporation (NYSE: ORCL) reported lower-than-anticipated fiscal 2024 fourth-quarter earnings and revenues. The tech giant, however, issued a robust FY25 revenue growth outlook, surpassing the market’s expectations. The company also revealed an impressive partnership with Google Cloud and OpenAI (a developer of ChatGPT). The stock of Oracle ended Thursday’s trading session at $139.85, down $0.53, or 0.38%, from the prior close.
The Austin, Texas-based company reported fourth-quarter revenues of $14.29 billion, up 3.30% from $13.84 billion in the similar quarter of fiscal 2023.
For the recent quarter, which ended on May 31, 2024, Oracle posted net income of $3.14 billion, or $1.11 per share, compared with $3.32 billion, or $1.19 per share, in the quarter that ended on May 31, 2023.
Excluding stock-based compensation, amortization of intangible assets, acquisition-related and other, and restructuring costs, among others, Oracle recorded 4Q 2024 non-GAAP net income of $4.61 billion, or $1.63 per share, down from $4.655 billion, or $1.67 per share, in 4Q 2023.
Analysts polled by LSEG had expected Oracle to announce earnings of $1.65 per share, with revenues reaching $14.55 billion.
Oracle CEO Safra Catz stated, “Throughout fiscal year 2025, I expect continued strong AI demand to push Oracle sales and RPO even higher—and result in double-digit revenue growth this fiscal year. I also expect that each successive quarter should grow faster than the previous quarter—as OCI capacity begins to catch up with demand.”
Segment wise:
- Cloud services and license support revenues grew by 9% y-o-y to $10.23 billion but missed StreetAccount estimates of $10.29 billion. Specifically, cloud infrastructure revenues were $2 billion, an increase of 42% from last year.
- Cloud license and on-premise license revenues were $1.84 billion, a decrease of 15% from last year and missing the StreetAccount consensus of $2.09 billion.
- Hardware revenues fell by 1% y-o-y to $842 million.
- Services revenues were $1.84 billion, a decrease of 6% from last year.
Moving forward, Oracle anticipates revenue growth between 5% and 7% for the first quarter of 2025. Additionally, the company predicts earnings per share for Q1 to fall within the range of $1.31 to $1.35. Analysts surveyed by LSEG anticipate the company to post earnings of $1.32 per share on revenues of $13.39 billion, which translates to an annual growth rate of 7.60%.
In fiscal year 2025, Oracle expects double-digit revenue growth, fueled by strong demand for the company’s AI-powered cloud services. Wall Street analysts expect the company to post revenue growth of 9%.
Remaining performance obligations, the most widely recognized measure of booked revenue, amounted to $98 billion in Q4 2024, reflecting a 44% increase compared to the previous year.
Oracle and Google have disclosed a fresh multi-cloud offering to bridge the differences between the Google Cloud and Oracle Cloud frameworks. Additionally, Oracle has joined hands with OpenAI, the creator of ChatGPT.
Enterprise clients who are currently using both Google Cloud and Oracle technology solutions will benefit from improved inter-operational capabilities and integration, allowing them to deploy applications spanning both public cloud environments.
Thanks to Google Cloud’s Cross-Cloud Interconnect, customers will be able to employ versatile workloads without incurring inter-cloud data-sharing fees. This service will preliminarily be offered for client onboarding in 11 international regions.
Furthermore, Oracle is collaborating with Microsoft and OpenAI to stretch out the Microsoft Azure AI platform to Oracle Cloud Infrastructure (OCI), providing supplementary capacity for OpenAI. OpenAI, known for developing ChatGPT, delivers generative AI-related services to over 100 million users each month.
The company’s board has approved a quarterly dividend of $0.40 per share, payable on July 25.
The quarterly earnings miss, solid FY 2025 revenue outlook, and OpenAI and Google Cloud partnership are expected to keep Oracle’s stock range-bound with a slight bullish bias in the near term.
The price chart from history shows that Oracle’s stock has breached the ascending triangle pattern. The base of the ascending triangle is now expected to act as a major support. Furthermore, the stock is currently trading higher than its 50-day moving average, with the MACD indicator displaying a positive reading. Therefore, we anticipate Oracle’s stock to remain in an uptrend for the next few trading sessions.
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