Key takeaways
- Oracle shares rose after the bell on Monday as the company reported results that beat analysts' expectations and highlighted its position amid the artificial intelligence (AI) boom.
- The company's revenue for the fiscal third quarter amounted to $13.3 billion, while net income and earnings per share (EPS) were $4 billion and $1.41, respectively, beating analyst estimates. and showing growth compared to the previous quarter and the same period of the previous year.
- Oracle reported a record total remaining performance obligations of $80 billion driven by new cloud infrastructure contracts, 43% of which CEO Safra Catz said will be converted to revenue over the next four quarters.
- Nvidia, McDonald's, Walmart and Uber are among those using Oracle's cloud offerings.
- Oracle is set to deliver new healthcare-focused offerings in the next quarter, which Chief Technology Officer Larry Ellison said could be “a high-growth business for years to come.”
Oracle (ORCL) stock rose more than 12% in after-hours trading Monday as the company reported results that beat analysts' expectations and showed it is poised to win as enterprise cloud customers integrate cloud technology. artificial intelligence (AI).
The company reported third-quarter fiscal 2024 revenue of $13.3 billion, slightly above analyst estimates compiled by Visible Alpha and showing a 7% year-over-year gain.
Oracle's net income for the quarter was $4 billion, beating analyst estimates and over the prior quarter and year-ago period. Earnings per share (EPS) of $1.41 beat analyst expectations and was up 16% year-over-year.
The company's total remaining performance obligations, or the total value of ordered products not yet delivered to customers, hit an all-time high of $80 billion driven by “large new cloud infrastructure contracts signed in the third quarter”.
Oracle “wait[s] “continue to receive large contracts that reserve cloud infrastructure capacity because demand for our Gen2 AI infrastructure substantially exceeds supply, even though we are opening new cloud data centers and expanding existing ones very, very quickly,” said the director executive Safra Catz.
Catz said the company expects 43% of the cumulative $80 billion to be “recognized as revenue over the next four quarters,” adding that Oracle's “Gen2 cloud infrastructure business will remain in a hypergrowth phase ( up to 53% in the third quarter) for the foreseeable future. “.
Nvidia (NVDA), McDonald's (MCD), Walmart (WMT), and Uber (UBER) are some of Oracle's customers using its cloud technology.
After moving most of Cerner's customers, a healthcare information technology company it acquired in 2021, to Oracle's Gen2 Cloud infrastructure in the third quarter, the company is set to “begin delivering its application suite in the completely new outpatient clinic cloud to these same customers. Chief Technology Officer Larry Ellison said.
Ellison added that “the delivery of this revolutionary new healthcare technology will enable the rapid modernization of our customers' healthcare systems over the next year and will transform Cerner and Oracle Health into a high-growth business for years to come.”
Oracle shares rose more than 12% to $128.10 in after-hours trading on Monday. The stock has gained more than 34% in value over the past year.
