Oracle cloud revenue up 22 percent as stock soars

Oracle Corporation has released better than expected fiscal 2022 Q2 results, reporting total quarterly revenues up 6 percent year on year to $10.4bn and total cloud revenue up 22 percent to $2.7bn.

The news boosted Oracle’s share price by nearly 16 percent on Friday pushing the value of the company to more than $280bn. The rally also boosted Larry Ellison’s personal fortune by $16bn to a staggering £135bn making him the world’s fourth richest person, one spot behind Microsoft founder, Bill Gates.

The stellar results and trading marked Oracle’s second best day on the markets in more than 20 years. Ellison’s personal gains will be particularly satisfying as they push the Oracle supremo past the two Google founders (Larry Page and Sergey Brin) on the Forbes Billionaire’s list and demonstrate the market’s acknowledgment of Oracle’s significant progress in the public cloud infrastructure race.

On the recent earnings call, Ellison suggested that his cloud ERP business would push past £20bn stating that they had only moved about 1,000 of their on-prem customers to Fusion and that he expected that the rest would move soon. He also went on to say that the vast majority of their new cloud ERP customers were being poached from other vendors and they had a total of 35,000 net-new cloud ERP customers in total – 28,000 for NetSuite and 8,500 Fusion.

In addition, cloud services and license support revenues were up 6 percent to $7.6bn in the quarter, while cloud license and on-premise license revenues were up 13 percent to $1.2bn. Short-term deferred revenues were $7.9bn and operating cash flow was $10.3bn during the trailing twelve months.

Oracle’s Q2 GAAP results were adversely impacted by the payment of a judgment related to a ten-year-old dispute surrounding former CEO Mark Hurd’s employment. That payment resulted in a Q2 GAAP operating loss of $824m and a loss per share of $0.46. However, Q2 non-GAAP operating income was up 6 percent to $4.9bn.

Safra Catz, CEO at Oracle, said: “Oracle’s Q2 Non-GAAP earnings per share was up 14 percent to $1.21 — beating guidance by $0.10. Constant currency revenue beat guidance by $200m. These strong results are being driven by the 22 percent growth of our infrastructure and applications cloud businesses, which are approaching $11bn in annualised revenue. We now have 8,500 Fusion ERP customers with revenue growing 35 percent, 28,400 NetSuite ERP customers with revenue growing 29 percent, and our Gen2 infrastructure businesses are growing even faster—and accelerating.”

Oracle’s board of directors has increased the authorisation for share repurchases by $10bn and declared a quarterly cash dividend of $0.32 per share of outstanding common stock.

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