Oracle’s shares surged over 9% in extended trading on Monday after the company reported a robust first-quarter performance for fiscal year 2025 (Q1 FY25), driven by the growing demand for its cloud services and offerings.
At its after-hours price of approximately $153, Oracle is on pace to reach a new record high on Tuesday, surpassing its highest close-to date of $145.03 set in July 2024. Prior to this earnings report, Oracle’s stock had already risen about 34% this year, significantly outperforming the S&P 500’s 15% gain.
The US computer technology company reported a significant rise in its net income for the first quarter of fiscal year 2025 (Q1 FY25), reaching $2.9bn, a 21% increase compared to the corresponding period of the last fiscal year.
Revenue for the reported quarter that ended 31 August 2024 also saw a significant boost, climbing 7% to $13.3bn. This is primarily due to the surge in cloud services and licence support revenue along with cloud licence and on-premise licence revenue.
Oracle’s cloud services and licence support revenue grew by 10% to $10.52bn, while the revenue of the cloud license and on-premise licence segment increased by 7% to $870m.
In addition, the American software company’s revenue from cloud infrastructure (Iaas) in Q1 FY25 came to $2.2bn, up 45%. Its cloud application (SaaS) revenue for the reported quarter grew by 10% to $3.5bn.
The company’s Fusion Cloud enterprise resource planning (ERP) revenue also showcased a growth of 16% to $0.9bn in the first quarter of FY25. The Oracle NetSuite Cloud ERP revenue in Q1 FY25 was up by 20% at $900m.
Oracle results attributed to AI boom
Oracle’s strong results in its cloud services segments are primarily attributed to a surge in demand for training artificial intelligence (AI) large language models (LLM) in the cloud.
The company’s diluted earnings per share also rose to $1.03 in Q1 FY25 compared to $0.86 reported in Q1 FY24.
Separately, Oracle announced a strategic multi-cloud partnership with Amazon Web Services (AWS). Both parties launched a new solution, dubbed Oracle Database@AWS, that enables customers to access Oracle Autonomous Database on dedicated infrastructure and Oracle Exadata Database Service within AWS.
The new offering aims to provide a seamless experience for users by integrating Oracle Cloud Infrastructure (OCI) with AWS.
Besides, the service will allow users to easily connect enterprise data stored in Oracle Databases to applications running on Amazon Elastic Compute Cloud (Amazon EC2), AWS Analytics, and AWS’s advanced AI and machine learning (ML) services, including Amazon Bedrock.
“As Cloud Services became Oracle’s largest business, both our operating income and earnings per share growth accelerated,” said Oracle’s chief executive, Safra Catz. “But the biggest news of all was signing a MultiCloud agreement with AWS—including our latest technology Exadata hardware and Version 23ai of our database software—embedded into AWS cloud datacenters. AWS customers will get easy and convenient access to the Oracle database when we go live in December later this year.”
Currently, Oracle has 162 cloud data centres around the world under its portfolio. The company signed 42 additional cloud graphic processing unit (GPU) contracts worth $3bn in Q1 FY25.
The company also has multi-cloud agreements with Microsoft and Google. By the end of Q1, seven Oracle cloud regions were operational within Microsoft’s infrastructure, with 24 more in development, said Oracle. Similarly, four Oracle cloud regions were live with Google, with 14 additional regions being built.
Oracle’s performance and strategic moves underscore its evolving role in the competitive cloud computing landscape. The company’s emphasis on AI and cloud technologies is reducing its gap with other market giants including Amazon and Microsoft.
For the second quarter of FY25, Oracle anticipates its total revenue to showcase a growth between 8% and 10%.
Read more: Oracle database services are coming to Microsoft Azure
