Oracle's stock experienced a 7% decline in after-hours trading on Monday after the company released its fiscal second-quarter earnings report, which fell short of analysts' expectations.
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Additionally, the company provided a weaker-than-anticipated forecast for the upcoming quarter. Here’s a comparison of Oracle’s results with LSEG consensus estimates:
Earnings per share: Adjusted $1.47 vs. $1.48 expected
Revenue: $14.06 billion vs. $14.1 billion expected
Despite the miss, Oracle’s second-quarter revenue showed a year-over-year increase of 9%.
The company reported a 26% rise in net income, reaching $3.15 billion, or $1.10 per share, compared to $2.5 billion, or 89 cents per share, during the same period last year. Revenue from Oracle’s cloud services division grew 12% year-over-year, totaling $10.81 billion and contributing 77% of the company’s total revenue.
Oracle’s cloud infrastructure business continues to be a significant driver of growth, competing directly with industry giants like Amazon, Microsoft, and Google as companies transition their workloads from on-premises data centers to the cloud.
The surge in demand for computing power, especially for artificial intelligence (AI) projects, has greatly benefited Oracle. Revenue from the cloud infrastructure unit skyrocketed 52% year-over-year, reaching $2.4 billion.
In a notable development, Oracle announced a partnership with Meta, enabling the social media giant to utilize Oracle’s infrastructure for projects related to its Llama family of large language models.
Oracle founder Larry Ellison emphasized the company’s competitive edge in AI, stating, “Oracle Cloud Infrastructure trains several of the world’s most important generative AI models because we are faster and less expensive than other clouds.”
Looking ahead, Oracle projects revenue growth of 7% to 9% for the current quarter. This would equate to approximately $14.3 billion at the midpoint of the range, slightly below analysts’ expectations of $14.65 billion.
The company also anticipates adjusted earnings per share of $1.50 to $1.54, compared to analysts’ estimates of $1.57 per share.
Earlier in September, Oracle raised its fiscal 2026 revenue forecast to $66 billion, surpassing analysts’ estimates by $1.5 billion. That same month, the company revealed plans for its cloud division to accept customer orders for computing clusters powered by over 131,000 Nvidia “Blackwell” graphics processing units, designed for AI model training and related tasks.
As of the market close on Monday, Oracle’s stock has risen over 80% in 2023, positioning the company for its strongest annual performance since 1999.
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