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Important points
- Oracle shares rose after the bell on Monday as the company reported financial results that beat analysts’ expectations and underscored its position in the artificial intelligence (AI) boom.
- In the fiscal third quarter, the company had revenue of $13.3 billion, and net income and earnings per share (EPS) of $4.0 billion and $1.41, respectively, exceeding analyst expectations and showing growth from the previous quarter and year-ago period. Indicated.
- Oracle reported a record $80 billion in total remaining performance obligations from new cloud infrastructure contracts, 43% of which will be realized as revenue in the next four quarters, CEO Safra Katz said.
- Nvidia, McDonald’s, Walmart, Uber and more use Oracle’s cloud products.
- Oracle plans to deliver new products focused on healthcare in the next quarter, which Chief Technology Officer Larry Ellison said could be a “high-growth business for years to come.” ” he said.
Oracle (ORCL) stock soared more than 12% in after-hours trading on Monday. The company reported earnings that beat analysts’ expectations and demonstrated the position it stands to gain as enterprise cloud customers integrate artificial intelligence (AI) technology.
The company reported third-quarter fiscal 2024 revenue of $13.3 billion, slightly above analyst expectations compiled by Visible Alpha and representing a 7% year-over-year increase.
Oracle’s net income for the quarter was $4 billion, beating analysts’ expectations and increasing from the previous quarter and year-ago period. Earnings per share (EPS) of $1.41 exceeded analyst expectations and increased 16% year over year.
The company’s total remaining performance obligations, or the total amount of ordered products not yet delivered to customers, hit a record $80 billion due to “new large cloud infrastructure agreements signed in the third quarter.” Reached.
Oracle is “hoping”[s] Demand for our second-generation AI infrastructure significantly exceeds supply, and we must continue to receive large contracts to secure capacity for our cloud infrastructure. “This is despite the fact that we are opening new cloud data centers and expanding existing cloud data centers very rapidly,” said CEO Safra Catz.
Catz said the company expects 43% of its $80 billion backlog to be “recognized as revenue in the next four quarters,” adding that Oracle’s “Gen2 cloud infrastructure business will remain in the third quarter for some time.” “We are in a hyper-growth phase with a 53% increase in the quarter,” he added. . ”
Nvidia (NVDA), McDonald’s (MCD), Walmart (WMT), and Uber (UBER) are some of the customers using Oracle’s cloud technology.
After migrating most customers from the healthcare information technology company Cerner, which it acquired in 2021, to Oracle’s Gen2 Cloud infrastructure in the third quarter, the company said it was “offering an entirely new suite of ambulatory care cloud applications to these same customers.” We are planning to start. CTO Larry Ellison said:
Ellison added, “This innovative new healthcare technology offering will enable rapid modernization of our customers’ health systems over the next year, transforming Cerner and Oracle Health into high-growth businesses for years to come. Probably,” he added.
Oracle shares rose more than 12% to $128.10 in after-hours trading Monday. The stock price has increased more than 34% in the past year.
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