Oracle says AI-powered cloud to assist in double-digit sales growth

Oracle has indicated that demand from customers for its AI-powered cloud services will assist in growing its revenue in double digits during fiscal 2025.
Safra Catz at Oracle World
In fiscal 2024, Oracle reported 6 percent increase in its revenue to $53 billion. Cloud services and license support revenues rose 12 percent to $39.4 billion. Cloud license and on-premise license revenues fell 12 percent to $5.1 billion.

Oracle is aiming for double digit growth as it started working with customers such as Nvidia, Microsoft, Google, xAI, OpenAI, Cohere, among others.

In Q4 alone, Oracle signed over 30 AI sales contracts totaling more than $12.5 billion, including one with OpenAI to train ChatGPT in Oracle Cloud.

Oracle says it signed the largest sales contracts in its history, led by demand for training large language models, as well as record levels of sales for OCI, Autonomous, Fusion, and NetSuite. RPO was $98 billion, up $18 billion from Q3 and up 44 percent year over year from $68 billion last year.

Oracle says approximately 39 percent of total RPO is expected to be recognized as revenue over the next 12 months. Oracle says this reflects the growing trend of customers wanting larger contracts as they see firsthand how Oracle Cloud Services are benefiting their business.

The company also announced a partnership with ChatGPT-maker OpenAI and Google Cloud to extend its own cloud infrastructure to customers.

OCI and Google Cloud network interconnect is available immediately in 10 regions, and it will be live with Oracle Database at Google Cloud in September, where customers can get direct access to Oracle Database services running on OCI deployed in Google Cloud data centers.

Oracle says a very large enterprise tech company signed a contract in Q4 for over $600 million where it will be helping them transform their operations with Fusion to enable them to become more agile, faster-growing, and more profitable.

“I expect that each successive quarter should grow faster than the previous quarter — as OCI (Oracle Cloud Infrastructure) capacity begins to catch up with demand,” CEO Safra Catz said.

Q4

Oracle’s quarterly revenues rose 3 percent to $14.3 billion. Cloud services and license support revenues grew 9 percent to $10.2 billion. Cloud license and on-premise license revenues fell 15 percent to $1.8 billion.

Oracle’s total cloud revenue, that is SaaS plus IaaS, excluding Cerner, was $4.7 billion (up 23 percent). Including Cerner, total cloud revenue was $5.3 billion (up 20 percent); and SaaS revenue of $3.3 billion (up 10 percent); and IaaS revenue of 2 billion (up 42 percent).

Oracle’s cloud services and license support for the quarter was 10.2 billion (up 10 percent), driven by strategic cloud applications, autonomous database, and OCI. Application subscription revenues, which include product support, were $4.6 billion (6 percent).

Oracle’s back-office SaaS applications have annualized revenue of 7.7 billion (up 16 percent). Oracle’s infrastructure subscription revenues were $5.6 billion (up 13 percent).

Oracle’s capital expenditure was $6.866 billion.

Oracle has 76 customer-facing cloud regions live, with 47 public cloud regions around the world and another 19 being built.

Oracle has 11 Database at Azure sites live and more locations with Microsoft coming online soon. Oracle will have 12 Oracle Database at Google Cloud sites live this year. Oracle also have 13 dedicated regions live and 15 more planned.

“Our multicloud cooperation with Microsoft expanded significantly in Q4, as we agreed to work together to support Open AI and ChatGPT — and 11 of the 23 OCI datacenters we are building inside Azure went live,” said Oracle Chairman and CTO, Larry Ellison.

Baburajan Kizhakedath

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