Overview
The financial results for Oracle Corporation (NYSE: ORCL) for the fiscal year 2024 were recently released, showcasing the company's growth in the cloud sector and significant AI-related contracts. Despite not meeting some analyst predictions, Oracle's stock experienced a surge in after-hours trading following key collaborations with Google and OpenAI.
Oracle's Performance
In the fourth quarter, Oracle reported a GAAP earnings per share (EPS) of $1.11 and a non-GAAP EPS of $1.63. Total revenue for the quarter amounted to $14.3 billion, reflecting a 3% increase in USD and a 4% rise in constant currency.
The company's cloud revenue, which encompasses Infrastructure as a Service (IaaS) and Software as a Service (SaaS), witnessed a 20% growth, reaching $5.3 billion. Notably, IaaS revenue surged by 42% to $2.0 billion, while SaaS revenue saw a 10% increase, totaling $3.3 billion. For the entire fiscal year 2024, Oracle's total revenue climbed by 6% to $53.0 billion.
However, Oracle's results failed to meet certain Wall Street projections. Analysts had anticipated an adjusted EPS of $1.65 and revenue of $14.55 billion. The company's cloud services and license support segment revenue of $10.23 billion slightly missed the StreetAccount consensus of $10.29 billion. Additionally, cloud and on-premises licenses revenue of $1.84 billion fell short of the expected $2.09 billion.
AI Endeavors and Collaborations
During the earnings call, Oracle highlighted its strong foothold in the rapidly expanding AI market. In Q4 alone, Oracle secured more than 30 AI sales contracts, totaling over $12.5 billion. The company foresees robust AI demand driving sales and increasing remaining performance obligations (RPO) in fiscal year 2025.
Oracle also unveiled significant partnerships with Microsoft and OpenAI. The collaboration with Microsoft aims to provide additional computing capacity to OpenAI, leveraging Oracle's cloud infrastructure for training AI models. Moreover, Oracle introduced upcoming generative AI functionalities for its Fusion cloud applications, targeting areas like supply chain management and human resources.
Stock Performance and Outlook
Following the financial results and partnership disclosures, Oracle's stock price surged by up to 11% in after-hours trading. The stock closed at $123.88 on Monday and during pre-market trading at 6:47 am EDT, it was trading at $134.62, marking an 8.67% increase. The company's 52-week range stands at $86.87 – $146.14, with an intraday market capitalization of $340.485 billion.
Can Oracle sustain its growth momentum based on its AI business strength? Share your thoughts below.
Disclaimer: The author does not hold any positions in the mentioned securities.
