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Oracle Falls Short on Q1 Earnings Expectations

Oracle (NYSE: ORCL) shares tumbled 3% on Monday in after-hours trading after it reported first-quarter earnings, with revenue below analysts’ expectations.

The database software company reported earnings of USD1.03 per share, compared to the expected USD0.97 a share. Revenue amounted to USD9.73 Billion, lower than analysts anticipated USD9.77 Billion.

Nevertheless, cloud services and license support revenues have risen 6% to USD7.4 Billion, meeting previous expectations. Cloud license and on-premise license revenues fell 8% to USD813 Million, below the estimated USD861 Million.

According to Oracle CEO Safra Catz, she anticipates that second-quarter earnings will amount to USD1.09 to USD1.13 per share on 3% to 5% revenue growth. Meanwhile analysts’ surveyed by Refinitiv predict second-quarter earnings of USD1.08 per share and about 5% revenue growth to USD10.25 Billion.

“Cloud is fundamentally a more profitable business compared to on-premise, and as we look ahead to next year, we expect company operating margins will be the same or better than pre-pandemic levels,” Catz said.

Throughout the last few years, the company has evolved from an on-premises database software licensing and maintenance model to a subscription-based software business that utilizes cloud computing.

Oracle shares have shot up 37% since the beginning of the year and has a current market cap of USD239.86 Billion.