Towards the end of the earnings season, American software and cloud services provider Oracle has today announced its second quarterly earnings. Most of the growth figures (mind you, most!) were in line with Wall Street estimates but the highlight of this earnings call is that the company now claims to have surpassed its arch-rival Salesforce in terms of cloud computing revenue. This, if true, could be a huge deal for the leading cloud company in the long run.
According to the official earnings report, Oracle’s total revenues for the three months ended in November stand at $9 billion coupled with an earning of 61 cents per share. The company marginally beat the earnings by one cent per share but the analysts were also expecting more revenue inflow — somewhere in the ballpark of $9.11 billion. However, if you compare the earnings to the same period previous year then it is almost flat as Oracle reported revenues of $9 billion on the back of earnings of 63 cents per share.
Talking about the same, Safra catz, CEO at Oracle, says,
For four consecutive quarters our Cloud SaaS & PaaS revenue growth rate has increased. As we get bigger in the cloud, we grow faster in the cloud. Our non-GAAP constant currency SaaS and PaaS growth rate is now up to 89%. This growth rate acceleration has driven our quarterly cloud revenue over the $1 billion mark.
In addition, the non-GAAP operating income of the company amounted to $3.8 billion with an operating margin of 42 percent. Oracle says that the revenues would’ve been up 1 percent if the falling global currencies and Brexit hadn’t impacted their returns this quarter. It declared a quarterly cash dividend of 15 cents per share as well.
The total software revenue for the company saw an uptick of 2 percent to amount to $7.18 billion while the cloud computing revenue stood at $878 million post a 81 percent increment. This includes software as a service (SaaS) and platform as a service (PaaS). The other major cloud platform infrastructure as a service (IaaS) rose 6% to $175 million.
The company has started laying immense focus on the expansion of their cloud stack and has recently unveiled its second-generation cloud infrastructure, as Chairman Larry Ellison mentions, will end Amazon Web Services’ monopoly in the market. The company also added that primary CRM service provider Salesforce has been beaten by them at their own game. Talking about the same, Oracle co-CEO Mark Hurd, says,
Oracle has now passed salesforce.com and become number one in SaaS cloud applications sales to customers with over 1,000 employees according to the latest IDC report. In other words, this year we are selling more enterprise SaaS than any cloud services provider in the world.
We expect to book over $2 billion in new annually recurring cloud business this year alone. And, with the acquisition of NetSuite, we plan on being the #1 cloud applications service provider for companies with less than 1,000 employees as well.
Also, on the conference call after the release of the earnings report, Oracle shared the forecast revenue for the next quarter i.e the one ended in March to be up 3 to 5 percent from a year earlier. This means it could be somewhere in the ballpark of $9.28 to $9.46 billion, better than the analyst estimates. The earnings per share is also expected to soar back and reach 64 cents as compared to 61 cents in the last quarter. It will also start working on the integration of its major acquisition of the enterprise cloud service provider NetSuite to its own service.
The company is banking on the sucess of its pivot to cloud technologies to create an exclusive category for itself in the market. Oracle has recently also unveiled its chatbot platform to further ease the creation of virtual assistant in this mobile-focused ecosystem.
