Oracle revenue grew 2% to $9.8 bn in second quarter

Oracle revenue grew nearly 2 percent year over year to $9.8 billion in the fiscal second-quarter, which ended Nov. 30.
Oracle NetSuite for ERPIn the prior quarter, Oracle revenue increased by almost 2 percent, CNBC reported.

The company pointed to growth from cloud services, which are more in demand this year because the coronavirus has forced many corporate workers to telecommute. At the same time, it continues to offer more traditional services to businesses, some of which have been hit hard by the pandemic.

“We would have had more revenue growth if we had not been capacity constrained in OCI during Q2,” Larry Ellison, Oracle’s co-founder and chairman, told analysts on a conference call. He was referring to Oracle’s cloud infrastructure, which competes with the likes of Amazon Web Services (AWS), Google and Microsoft Azure.

“Our highly profitable multi-billion dollar Fusion and NetSuite Cloud ERP applications businesses grew revenue 33 percent and 21 percent respectively in Q2,” said Oracle CEO, Safra Catz.

Both Gartner and IDC rank Oracle’s ERP suite number one in the cloud.

“Oracle’s Gen2 Cloud Infrastructure is adding customers and growing revenue at a rate well in excess of 100 percent per year,” said Oracle Chairman and CTO, Larry Ellison.

Oracle opened 13 additional regional datacenters in 2020 to bring its total to 29 regional datacenters worldwide, more than AWS.

Oracle increased its already aggressive expansion plan, and now expects to have 38 Cloud regions live by mid-2021 with the recent opening of three new commercial cloud regions, one in Dubai, one in the United Kingdom, and one in Chile.

Oracle has opened 13 Cloud regions so far in 2020 and currently operates 29 regions globally – the fastest expansion by any major cloud provider.

Oracle announced Exadata Cloud Service, which helps customers accelerate their most challenging transaction processing and data analytics projects in 29 global cloud regions and Dedicated Region Cloud@Customer.

Oracle’s largest business segment, cloud services and license support, generated $7.11 billion in revenue, up 4 percent. Oracle’s second-generation cloud-infrastructure revenue grew 139 percent in the quarter, Oracle CEO Safra Catz said on the call.

But smaller parts of Oracle’s business declined. The company’s cloud license and on-premises license segment contributed $1.09 billion in revenue, down 3 percent.

Oracle’s hardware revenue totaled $844 million, down 3 percent although just above the $838 million FactSet analyst consensus. The company’s $752 million in services revenue, while slightly more than the $750 million consensus, was off by 7 percent.

“So the pandemic affects us in some ways negatively, in some ways positively, simply because of our size and breadth of customer base, it affects them differently,” Catz said. “And so obviously our hospitality customers have had a very difficult time of it in the main. Some of our retail customers have done horribly, some have done very, very well.”

Oracle announced the availability of a cloud service that organizations can use to monitor the health of different parts of applications running in clouds and on-premises centers.

Catz said she expects the company to generate $1.09 to $1.13 in adjusted earnings per share in the fiscal third quarter alongside 2 percent to 4 percent annualized revenue growth.