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The cloud division of Oracle Corp, a business software maker, reported quarterly revenue that did not reach analysts’ estimates due to increased competition from Amazon.com Inc and Microsoft Corp for cloud services due to remote work.
Oracle said it expects fourth quarter revenue to increase between 1% and 3% in constant currency, the midpoint of which implies revenue of $ 10.65 billion, according to Reuters calculations. Analysts had expected revenue for the current quarter of $ 10.84 billion, according to IBES data from Refinitiv.
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Oracle’s shares fell 6.5% to $ 67.44 on Wednesday’s extended trading session.
With the move to remote work, many companies have been forced to move operations to the cloud, resulting in an increased demand for offerings from Oracle, Microsoft Azure and Amazon Web Services.
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Oracle’s cloud service and license support unit revenue, the largest in revenue, increased 5% to $ 7.25 billion in the reported quarter, compared with analysts’ estimates of $ 7.27 billion.
“We are opening new regions as quickly as possible to support our rapidly growing billion dollar infrastructure business,” said Oracle President Larry Ellison.
To compete with the cloud services provided by Amazon and Microsoft, Oracle is installing more data centers.
| Ticker | Safety | Last | Change | Change % |
|---|---|---|---|---|
| ORCL | ORACLE CORP. | 72.19 | -0.41 | -0.56% |
“Some say that Oracle is ‘becoming a cloud giant’, but its growth is still very small. Despite some remarkable progress, Oracle’s third quarter revenue grew by only 3%. And that with some remarkable progress driven through the cloud, “said Third Bridge analyst Scott Kessler.
The company’s revenue increased 3% to $ 10.09 billion in the third quarter ended February 28, exceeding analyst estimates of $ 10.07 billion.
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On an adjusted basis, Oracle earned $ 1.16 per share, exceeding estimates of $ 1.11.
(Reporting by Chavi Mehta in Bengaluru; Editing by Shounak Dasgupta)