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Oracle Misses Q4 Expectations, But Stock Soars on Google and OpenAI Partnerships
Oracle's Q4 results highlighted growth in its cloud business and significant AI-related contracts despite missing some analyst expectations.
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Oracle Corporation (NYSE: ORCL) reported its fiscal 2024 fourth quarter and full-year financial results on Monday after market close, highlighting the firm’s growth in its cloud business and significant AI-related contracts. Despite missing some analyst expectations, the company’s stock surged in after-hours trading after announcing key partnerships with Google and OpenAI.
Oracle Earnings and Expectations
For the fourth quarter, Oracle reported a GAAP earnings per share (EPS) of $1.11 and a non-GAAP EPS of $1.63. Total revenue for the quarter reached $14.3 billion, up 3% in USD and 4% in constant currency.
The company’s cloud revenue, which includes Infrastructure as a Service (IaaS) and Software as a Service (SaaS), grew 20% to $5.3 billion. IaaS revenue saw a significant 42% increase, reaching $2.0 billion, while SaaS revenue rose 10% to $3.3 billion. For the full fiscal year 2024, Oracle’s total revenue increased 6% to $53.0 billion.
However, Oracle’s results fell short of some Wall Street expectations. Analysts had predicted an adjusted EPS of $1.65 and revenue of $14.55 billion. The company’s cloud services and license support segment revenue of $10.23 billion was slightly below the StreetAccount consensus of $10.29 billion. Additionally, cloud and on-premises licenses revenue of $1.84 billion was lower than the expected $2.09 billion.
AI Highlights and Partnerships
During the earnings call, Oracle emphasized its strong position in the rapidly growing AI market. In Q4 alone, the company signed over 30 AI sales contracts, totaling more than $12.5 billion. Oracle expects continued strong AI demand to drive sales and remaining performance obligations (RPO) higher in fiscal year 2025.
Oracle also announced significant partnerships with Microsoft and OpenAI. The company will be partnering with Microsoft to deliver supplemental computing capacity to OpenAI, which will draw on Oracle’s cloud infrastructure to train its AI models.
Furthermore, Oracle revealed upcoming generative AI features for its Fusion cloud applications, targeting supply chain management and human resources.
Following the earnings release and partnership announcements, Oracle’s stock price jumped as much as 11% in after-hours trading. The company’s shares closed at $123.88 on Monday, and as of 6:47 am EDT in pre-market trading, the stock was trading at $134.62, up $10.74 or 8.67%. Oracle’s 52-week range is $86.87 – $146.14, and its intraday market capitalization stands at $340.485 billion.
Do you think Oracle can continue to gain on the strength of its AI business? Let us know in the comments below.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
