Oracle Company (ORCL) Q2 2023 Quarterly Earnings
Safra Catz, CEO of Oracle and then one of Oracle’s two co-CEOs, smiles at Oracle’s OpenWorld conference in San Francisco on September 20, 2016.
David Paul Morris | Bloomberg | Getty Images
Oracle Shares rose as much as 4% in extended trading Monday after the software company reported results for the second fiscal quarter that topped analysts’ estimates. But he gave a lighter earnings forecast than analysts had said.
Here’s how the company did it:
- Employment: $1.21 per share, adjusted, versus $1.18 per share as analysts had expected, according to Refinitiv.
- Income: $12.28 billion, versus $12.05 billion as analysts had expected, according to Refinitiv.
In terms of guidance, Oracle CEO Safra Catz said on a conference call that she expects $1.17 to $1.21 in adjusted earnings per share and 17% to 19% revenue growth for the fiscal third quarter. Analysts polled by Refinitiv had expected $1.24 per share and $12.34 billion in revenue, which means 17.3% growth.
Oracle’s total revenue grew 18% year over year in the second fiscal quarter, which ended Nov. 30, according to a statement. Healthcare software company Cerner, which Oracle acquired for $28 billion in June, posted $1.5 billion in revenue.
Excluding the impact of foreign exchange rates, Oracle’s adjusted earnings would have been 9 cents higher, the company said. Revenue for the quarter was more than $200 million above the high end of its guidance range, Catz said in the statement. She cited strength in cloud infrastructure and cloud-based applications.
“We really have it coming from all areas,” she said on a call Monday.
Net income was $1.74 billion, compared to a net loss of $1.25 billion in the year-ago quarter. Last year’s loss resulted from paying a judgment related to Mark Hurd, who was formerly a co-head with Catz. Hurd died in 2019.
Oracle expanded its adjusted operating margin to 41% from 39% in the previous quarter.
Catz said Oracle is not done with the Cerner integration.
“We already have some savings but ultimately just so you understand, we expect to run them at Oracle’s normal margins,” she said. “So we have a long way to go. And I think over the next couple of quarters you’ll see continued improvement as we’ve done some of the operational integration and at the same time I think they continue to overperform for us. “
The company’s cloud services and license support division posted $8.6 billion in revenue, up 14% and above the $8.56 billion consensus among analysts surveyed by StreetAccount. Revenue from cloud infrastructure jumped 53% to $1 billion.
Revenue from cloud and on-premises licenses, at $1.44 billion, exceeded the $1.24 billion StreetAccount consensus.
In the fourth quarter, Oracle announced Alloy, a way for partners to run the company’s cloud services in their own data centers. Separately, the US Securities and Exchange Commission fined Oracle $23 million for alleged violations of the Foreign Corrupt Practices Act.
Oracle said it was targeting $65 billion in organic revenue, including the Cerner contribution, in fiscal year 2026, with an adjusted operating margin of 45%.
Before the after-hours shift, shares of Oracle are down about 7% for the year, while the S&P 500 index has fallen 15% over the same period.
Watch: The software will be replaced by Baird’s Will Power and SC Moatti from Mighty Capital