Oracle shares surged by 9% in after-hours trading following the announcement of cloud partnerships with Google and OpenAI. However, the software maker fell short of Wall Street expectations for the fourth quarter. The earnings per share came in at $1.63 adjusted, missing the expected $1.65. Revenue also fell below expectations at $14.29 billion, compared to the anticipated $14.55 billion.
Despite missing the target set by Wall Street, Oracle saw a 3% increase in revenue year over year. The company reported a net income of $3.14 billion, or $1.11 per share, down from $3.32 billion, or $1.19 per share, in the same period last year. The cloud services and license support segment brought in $10.23 billion in revenue, showing a 9% increase. However, this figure was slightly below the StreetAccount consensus of $10.29 billion.
Oracle’s cloud and on-premises licenses business generated $1.84 billion in revenue, a 15% decrease from the previous year and lower than the anticipated $2.09 billion. Cloud infrastructure revenue reached $2.0 billion, marking a 42% increase. While this growth rate was slightly lower than the previous quarter’s 49%, Oracle’s cloud business is still growing at a faster pace compared to its competitors like Amazon Web Services and Microsoft Azure.
Oracle announced that it would be bringing its database to Google’s cloud, with availability scheduled for November. OpenAI, a long-time user of Azure, has now selected Oracle’s cloud for additional computing capacity. Moreover, Oracle revealed plans to expand its database software to five more Azure data center regions, bringing the total to 15. The company also introduced generative artificial intelligence features to its Fusion cloud applications for supply chain and human resources.
Despite the disappointing financial results, 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. Executives are set to discuss the results and provide guidance on a conference call scheduled for 5 p.m. ET. Investors are eagerly awaiting updates on Oracle’s strategic direction and future growth prospects in the competitive cloud market.