Oracle’s stock soars as upbeat guidance, Google deal outweigh earnings miss

Oracle’s stock soars as upbeat guidance, Google deal outweigh earnings miss

CEO expects double-digit revenue growth this fiscal year

Oracle Corp. shares were shooting more than 9% higher in Tuesday’s extended session after the company delivered upbeat guidance that seemed to overshadow an earnings miss for the latest quarter.

The software company reported fiscal fourth-quarter net income of $3.14 billion, or $1.11 a share, compared with $3.32 billion, or $1.19 a share, in the year-earlier period. On an adjusted basis, Oracle ORCL, -0.50% earned $1.63 a share, whereas analysts tracked by FactSet were expecting $1.65 a share.

Revenue rose to $14.29 billion from $13.84 billion, while analysts tracked by FactSet were anticipating $14.56 billion.

Oracle reported remaining performance obligations for the fiscal fourth quarter of $98 billion, up 44%.

“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,” Chief Executive Safra Catz said in a release. “I also expect that each successive quarter should grow faster than the previous quarter — as OCI capacity begins to catch up with demand.”

The FactSet consensus implied 9% growth for fiscal 2025. OCI is the company’s Oracle Cloud Infrastructure product.

In the latest quarter, the company raked in $10.23 billion in revenue from cloud services and license support, up 9% from a year before, whereas analysts were modeling $10.30 billion. Revenue from cloud licenses and on-premise licenses fell 15% to $1.84 billion, while analysts were looking for $2.09 billion. Oracle also generated $842 million in hardware revenue, down 1%, while the FactSet consensus was for $796 million. Services revenue fell 6% to $1.37 billion.

Separately, Oracle announced that it has inked a partnership with Alphabet Inc.’s GOOG, +0.88% GOOGL, +0.92% Google through which customers will be able to combine Oracle Cloud Infrastructure with technology from Google Cloud.

“Customers want the flexibility to use multiple clouds,” Oracle Chairman Larry Ellison said in a release.

Alphabet Chief Executive Sundar Pichai said that the deal would make it so the “many” customers who pay for products from both companies will be able to “use Oracle database and applications in concert with Google Cloud’s innovative platform and AI capabilities.”

A Bernstein analyst noted last year that Oracle was beginning to take a more partnership-focused approach that served Microsoft Corp. MSFT, +1.12% well when the company embarked on a similar tactic almost a decade ago.

Oracle shares have gained more than 17% so far this year.

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