Oracle Corporation revealed its fiscal 2024 Q2 results today, showcasing robust growth in various segments despite market challenges. The tech giant reported a 5 percent year-over-year increase in total quarterly revenues in USD, amounting to $12.9 billion.
Notably, Cloud services and license support revenues surged, marking a 12 percent increase, reaching $9.6 billion. However, Cloud license and on-premise license revenues experienced an 18 percent decline, totaling $1.2 billion.
For the current quarter, Oracle forecast revenue growth, including Cerner, to be in the range of 6-8 percent, as an uncertain economy and competition in the cloud computing market weighed on demand for its cloud offerings.
In October, Google-parent Alphabet also reported the slowest growth in its cloud division in at least 11 quarters, raising concerns over demand.
Oracle has been working to bolster its AI infrastructure as firms look to adopt generative AI. However, frontrunners Amazon and Microsoft continue to dominate the market.
Larger players have made deep inroads in the AI ecosystem, limiting opportunities for Oracle to gain a sizeable market share by adding more Cloud customers, Reuters news report said.
The Q2 operating income stood at $3.6 billion, reflecting a 9 percent increase. The operating margin settled at 28 percent. Oracle’s net income landed at $2.5 billion, marking a 14 percent surge.
Oracle’s short-term deferred revenues reached $8.9 billion, signaling promising future growth. Over the past twelve months, the company generated an operating cash flow of $17.0 billion and a free cash flow of $10.1 billion.
CEO Safra Catz expressed enthusiasm about the escalating demand for Oracle’s Cloud Infrastructure and Generative AI services. “Oracle’s total Remaining Performance Obligations climbed to over $65 billion, surpassing annual revenue,” she stated. Catz also highlighted that the company’s cloud businesses are on the verge of a $20 billion annual revenue run rate, with an unprecedented surge in cloud services demand.
Chairman and CTO Larry Ellison elaborated on the company’s expansion plans, revealing the expansion of existing cloud data centers by 66 and the construction of 100 new ones to cater to the soaring demand.
Larry Ellison emphasized the rapid and cost-effective deployment of these data centers, attributing it to high automation and uniformity in services and networks. Additionally, Oracle plans to activate 20 new cloud data centers in collaboration with Microsoft Azure, alongside the development of numerous data centers globally to meet overwhelming demand.
