reported flat revenue for its latest quarter, a result better than what Wall Street had been expecting, as the software giant made progress in a piece of its struggling cloud business.
Analysts have been looking for signs of whether Oracle could energize its cloud-computing business after revenue growth stalled in the first quarter and Thomas Kurian, the top cloud-computing executive, left for rival Alphabet Inc.’s Google.
Revenue in Oracle’s largest segment—its cloud services and license support—rose to a stronger-than-projected $6.64 billion in the quarter ended Nov. 30. Overall, Oracle generated $9.56 billion revenue, compared with $9.59 billion a year earlier.
Oracle changed how it reports its quarterly financial results this year, mixing its cloud-computing business, which had been growing more slowly than that of competitors, with its licensing-support business. The change makes it harder to track performance of the cloud business.
Shares, which closed Monday down 2% at $45.73, rose 6% to $48.55 in post-market trading, though company officials gave a tepid financial forecast for the current quarter.
The software giant expects revenue in the third quarter to increase 2% to 4%, excluding currency fluctuations. That would translate to another quarter of, at best, flat revenue when factoring in Oracle’s projected 4% impact from currency conversion.
Oracle officials sought to reassure investors about the cloud business during a Monday conference call with analysts, highlighting strong software-as-a-service bookings in the latest period and Oracle’s competitive edge from its autonomous database.
“We need more than just a great database,” said Larry Ellison, the company’s co-founder, chairman and chief technology officer. “We also need first-class infrastructure to run the database on, and we know finally have that.”
Overall, Oracle reported second-quarter profit rose 5% to $2.33 billion, or 61 cents a share. Excluding stock-based compensation and other items, profit rose to 80 cents a share from 69 cents a share.
Analysts surveyed by FactSet expected an adjusted profit of 78 cents a share on $9.52 billion in revenue.
Oracle made its business selling software that companies run in their own databases, but has spent years trying to find its footing in the fast-growing cloud, where companies are increasingly renting computing power and storage.
To catch up with the likes of
Corp. and Google, Oracle pledged to quadruple the number of its giant data-center complexes over a two-year period.
The Redwood City, Calif., company has used its cash pile to raise stock buybacks, which has helped offset the pressure of disappointing financial results. Oracle has spent $19.92 billion to buy back stock for the first half of the year, including about $10 billion on 203 million shares in the quarter that ended in November.
Write to Maria Armental at email@example.com
Appeared in the December 18, 2018, print edition as ‘Oracle Advances In Cloud Business.’