Oracle’s Fourth Quarter Performance Overview
Oracle’s fourth-quarter fiscal 2024 non-GAAP earnings of $1.63 per share fell short of the Zacks Consensus Estimate by 1.83% and declined 2.4% year over year. Revenues, however, showed a positive trend, rising 3.3% year over year to $14.28 billion.
Market Response and Strategic Moves
In response to the earnings report, Oracle’s stock experienced a surge of over 9% in after-hours trading. This reaction was driven by the company’s positive future guidance and the announcement of cloud partnerships with OpenAI and Alphabet-owned Google. The move to offer Oracle Database@Google Cloud, featuring top-notch performance and pricing consistency with Oracle Cloud Infrastructure, shows Oracle’s commitment to innovation and collaboration in the cloud space.
Revenue Breakdown and Business Segments
Cloud services and license support revenues saw a healthy 9% year-over-year growth, reaching $10.23 billion, fueled by strategic cloud applications and autonomous database services. On the other hand, cloud license and on-premise license revenues experienced a 15% decline year over year. Notable increases were observed in various segments such as Cloud Infrastructure (IaaS) revenues, which surged by 42% year over year, and Fusion Cloud ERP (SaaS) revenues, which jumped by 14%.
Financial Strength and Future Projections
Oracle closed the quarter with cash & cash equivalents and marketable securities amounting to $10.6 billion. The company also reported robust operating cash flow and free cash flow, standing at $18.67 billion and $11.8 billion, respectively. Looking ahead, Oracle expects continued growth in total revenues, cloud revenues, and non-GAAP EPS for the first quarter of fiscal 2025. Management anticipates that fiscal 2025 cloud infrastructure services will outpace the growth rate recorded in the previous year.
Analyst Ratings and Stock Recommendations
Despite the recent performance, Oracle currently holds a Zacks Rank #4 (Sell). Investors seeking alternatives in the tech sector may look into companies like NVIDIA (NVDA) and Amtech Systems (ASYS), both of which have received a Zacks Rank #1 (Strong Buy). Analysts have revised their earnings expectations for Nvidia upwards, while Amtech Systems’ loss per share estimation has remained stable.