Oracle, Seeing Cloud Sales Rise, Beats Street on Q2 Earnings

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Oracle, Seeing Cloud Sales Rise, Beats Street on Q2 Earnings

The total revenue related to cloud-based applications went up 47% from the previous year, a metric that had great significance in the company’s wellbeing in the long term.

On December 17, 2014, Oracle received a Christmas gift in advance after its share stocks spiked following the news that its quarterly turnover and revenue earning actually exceeded Wall Street estimation thresholds.

The estimated earnings report had earlier resulted in a stark fall that saw Oracle, well known authorities in the world of data center hardware, cloud-based applications and database services, miss their Street profit and revenue predictions for three consecutive quarters. This was attributed to the highly competitive cloud-based service sector, where the company had a hard time getting a grip on the market.

For the second quarter however, the company reported revenue of $9.6 billion, which was a rise of 7% year-over-year and earned stockholders 69 cents to the share. This was a rise of $0.9 billion from the numbers predicted by Wall Street analysts. As a result, its shares on the stock market opened at $40.63 and closed at $41.16, which was an increase of 1.3%. At some point in the trading, which went until after hours, the stock nearly hit the $42 mark.

Rise in Cloud-related Revenue

On the whole, Oracles revenue from cloud related services went up by 47% year-over-year, a metric which was of great significance to the company’s wellbeing, and one that received quite an amount of airplay during Oracle’s executives’ conference calls with journalists, experts and analysts.

Cloud and software licensing revenues showed a 5% hike to $7.3 billion whereas hardware revenue, of which sale of Exadata storage machines and analytics units are principle, came

to $1.33 billion. The former numbers approached, but didn’t surpass, Wall Street projections, which proffered $7.31 and $1.25 billion respectively.

Mark Hurd, Oracle CEO, revealed that the quarter had witnessed a growth rate of over 140% in its new cloud bookings, as well as their expectations that the number will beat the 250 million mark by the end of the last quarter of 2015.

With the growth of their cloud business services, Mr. Larry Ellison explained that the entire company’s growth rate would rise. This is a stark difference from their competitors’ trends, where growth rates are decreasing with rise in their cloud businesses. Mr. Ellison is Oracles Chief Technical Officer and Chairman.

Speaking through a conference call, he continued to reveal that the company registered more than $170 million as revenue from new PaaS (Platform-as-a-Service) and SaaS (Software-as-a-Service) annual recurrent revenue. By the fourth quarter of the current fiscal year, Oracle expects to have sold more than 250 million new subscriptions to their PaaS and SaaS services.

Given that trend, at the end of the fiscal year, Oracle will likely have reached over $1 billion revenue from fresh PaaS and SaaS subscriptions, a figure that is almost close to the current market leader Safesforce.com. It looks like the race will be close this year.

Growing momentum

While these are only predictions, the fact that Oracle has finally established a footing in the cloud and software side of operations two years after its retooling process cannot be ignored. This is also reinforced by a steady gain in its stock prices at almost 22% over a 12-month period.

Sources
http://www.eweek.com/cloud/oracle-seeing-cloud-sales-rise-beats-street-on-q2-earnings.html#sthash.S7lPOQ4t.dpuf

http://recode.net/2014/12/17/oracle-shares-rise-as-q2-beats-street-estimates/

http://thenextweb.com/insider/2012/12/18/oracle-beats-estimates-with-fiscal-q2-revenues-of-9-1-billion-and-earnings-per-share-of-0-64/

Image(Pie-Chart) courtesy of Cowen and Company from www.zdnet.com
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