Oracle’s results boosted by jump in cloud revenue, and stock gains after hours

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Shares of Oracle Corp. rose after hours Monday after the IT and cloud infrastructure provider reported fiscal fourth-quarter results that topped expectations, helped by a jump in cloud revenue that executives said positioned the company well for an increasingly AI-dominant future.

The company didn’t shy away from name-dropping its AI collaborators during the company’s earnings conference call with Wall Street analysts, either, as AI plans dominate the discourse within the tech industry.

Executives brought up chip maker Nvidia Corp., which is using Oracle’s
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cloud platform for AI development and working with Oracle to build a massive AI computer that uses thousands of graphics processing units. And co-founder and Chief Technology Officer Larry Ellison, after rattling off more than a dozen AI-development companies that he said were Oracle’s customers, said its AI customers overall “have recently signed contracts to purchase more than $2 billion” in cloud capacity.

Oracle has put out AI-backed products intended to help human resources professionals and manufacturers, and it has tried to broaden its software’s machine-learning abilities. An array of companies use Oracle’s cloud technology more broadly, from JPMorgan Chase & Co.
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to Uber Technologies Inc.
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to Skechers USA Inc.
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-1.88%
.

Oracle reported fourth-quarter net income of $3.32 billion, or $1.19 a share, compared with $3.19 billion, or $1.16 a share, in the same quarter last year. Revenue rose 17% to $13.84 billion, compared with $11.84 billion in the prior-year quarter.

Excluding stock-based compensation, amortization and other charges, Oracle
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earned $1.67 a share, compared with $1.54 a year ago.

Analysts polled by FactSet expected Oracle to report adjusted earnings per share of $1.58, on revenue of $13.74 billion.

Oracle also declared a quarterly cash dividend of 40 cents a share. Revenue from Oracle’s cloud software and infrastructure services rose 54% during the quarter.

“So, both of our two strategic cloud businesses are getting bigger — and growing faster,” Chief Executive Safra Catz said in a statement. “That bodes well for another strong year in FY24.”

The company, during the call, said it expects first-quarter sales growth of 8% to 10%, and first-quarter adjusted earnings per share of between $1.12 and $1.16, compared with FactSet estimates for $1.15.

Oracle shares
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+5.99%

rose 3.5% after hours on Monday. The stock closed regular trading up 5.8% to $116.43, putting it at a record high.

Prior to the results, analysts were focused on Oracle’s cloud business — which has faced concerns about tighter tech budgets in IT departments as inflation raises concerns about the economy — as well as its AI potential, which has catapulted shares of other tech companies higher. More executives inside and outside of tech, hoping for a similar pop from investors, have been talking about AI on earnings calls more this year.

Earlier on Monday, Wolfe Research upgraded Oracle, saying its cloud business could double its market share by 2025 “on the backs of architectural advantages, partnerships” and generative AI.

Shares of Oracle have marched 81.7% higher over the past 12 months. The S&P 500 Index
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+0.93%

has risen 15.7% over that period.

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