Oracle Q4 earnings beat on revenue but miss on cloud sales

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Oracle Q4 earnings beat on revenue but miss on cloud sales.

companies :: 7hrs ago :: source - yahoo finance

By Daniel Howley

Oracle (ORCL) reported its fourth quarter earnings after the bell on Wednesday, beating analysts' expectations on the top and bottom lines but missing on cloud revenue.

Oracle also announced it will raise roughly $40 billion to pay for its data center build-out via a mixture of debt and equity sales. Shares fell

For the fourth quarter, Oracle saw earnings per share (EPS) of $2.11 on revenue of $19.18 billion. That's better than the EPS of $1.97 and $19.09 billion in revenue analysts were expecting, according to a Bloomberg analyst consensus.

Oracle stock took a stinging hit after announcing its second quarter earnings in December on a weak outlook and concerns related to its spending plans.

The company reported EPS of $1.70 and revenue of $15.9 billion in the same period a year ago.

Oracle's Cloud business revenue, which includes Cloud Applications and Cloud Infrastructure, came in at $9.91 billion. Wall Street was looking for $9.99 billion.

Cloud Applications revenue came in at $4.13 billion, below expectations of $4.17 billion. Cloud Infrastructure hit $5.79 billion. Analysts were projecting $5.72 billion.

Despite the miss on cloud revenue, Oracle reaffirmed its 2027 revenue guidance of $90 billion.

Remaining performance obligations (RPOs), a measure of contracts the company has signed, but has yet to deliver on, topped out at $638 billion, ahead of expectations of $589.5 billion.

RPOs provide investors with an understanding of overall demand for a company's cloud services and have become increasingly important amid the global AI build-out.

Oracle reports financial results Wednesday. (AP Photo/Paul Sakuma, File). ASSOCIATED PRESS

Oracle's earnings come days after OpenAI (OPAI.PVT) revealed it filed confidential paperwork for its initial public offering.

The cloud services and infrastructure provider counts OpenAI among its most important customers.

The Sam Altman-helmed AI startup signed a $300 billion, five-year deal with Oracle in 2025, which serves as the linchpin of its AI efforts.

But the stock had been on the upswing, after beating Q3 expectations in March and raising 2027 revenue guidance to $90 billion.

Year to date, Oracle was up just 5.6%, as of Tuesday's close. But the stock has climbed more than 16% over the last 12 months.

That's slightly better than Amazon (AMZN), which is up roughly 13% in the last 12 months, and far ahead of Microsoft (MSFT), which is down more than 14% in the last year.

Google (GOOG, GOOGL), however, has easily outperformed its peers thanks to improvements to its Gemini models and Google Cloud Platform growth, which have helped propel the stock nearly 104% over the past year.

Editor's note: Oracle will raise $40 billion via debt and equity sales in 2027. It did not increase capital expenditures to $90 billion, as a prior version of this article indicated, citing Bloomberg.

Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.

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