ORACLE missed Wall Street expectations for second-quarter revenue and adjusted profit on Monday (Dec 9), hit by stiff competition and softer-than-expected spending on its database and cloud services as enterprise clients slash budgets amid an uncertain economy.
Shares of the company were down over 7 per cent in extended trading.
Despite seeing healthy growth in its cloud segment, Oracle competes with cloud heavyweights such as Microsoft and Amazon, which have established a large presence in the field.
Wall Street expectations for artificial intelligence-linked firms have been high as they bet on the technology to be a strong growth driver in the future. The company’s shares have soared over 80 per cent so far this year.
Oracle reported revenue of US$14.06 billion in the second quarter, up 9 per cent from a year ago, but below estimates of US$14.11 billion, as per data compiled by LSEG.
To gain market share in the competitive environment, Oracle has partnered with these so-called cloud hyperscalers by embedding its database architecture within Microsoft’s Azure and Amazon’s web clouds, allowing customers to connect data across various applications.
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The company’s cloud services and license revenue jumped 12 per cent to US$10.8 billion in the quarter ended Nov 30.
Oracle’s chief executive Safra Catz said total Oracle cloud revenue should top US$25 billion in this fiscal year, as it makes hefty investments into upgrading its cloud architecture and integrating AI into it.
On an adjusted basis, the company earned US$1.47 per share, compared with estimates of a profit of US$1.48 per share.
Remaining performance obligations, the most popular measure of booked revenue, rose 50 per cent to US$97 billion in the second quarter. REUTERS
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