Oracle’s shares dropped in after-marketing trading on Thursday, after Q3 cloud revenues failed to meet Wall Street expectations.
Shares dropped by around 4% after Oracle said expected growth would be between 21% and 25%, falling short of the expected 30% forecast by analysts.
Despite Oracle’s shares dropping the company’s overall Q2 revenues increased, with cloud revenues bringing in $1.52bn, up 44% from $1.1bn reported in last year’s corresponding quarter.
Cloud revenues were boosted from Oracle’s Cloud Software as a Service (SaaS) after it increased by 55% to $1.1bn, while Infrastructure as a Service (IaaS) revenues increased to $396m by 21%. On-Premise software revenues also increased by 9% to $7.8bn from $7.2bn in the previous year.
The cloud revenue increase boosted Oracle’s overall growth by 6%, with revenues of $9.6bn that were slightly over expected revenues of $9.52bn.
“Overall cloud revenue growth of 44% drove our quarterly revenue and earnings higher. Our success in the quarter was based on the increasing scale and the gathering momentum in our cloud business. I expect the business to continue to grow and strengthen over the coming quarters,” said Oracle CEO Safra Catz.
Despite shares falling, overall revenue has increased.
The largest increase for Oracle was its Cloud Software as a Service revenues increasing by 55% and putting Oracle in a somewhat leading position in the market, with the increase of customers and services.
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Mark Hurd, CEO at Oracle, said: “We are now the clear market leader in enterprise back-office SaaS applications with over 5,000 Fusion customers. And we expect to extend our lead by selling around $2 billion in new enterprise SaaS application cloud subscriptions over the coming four quarters. That’s more new SaaS sales than any of our competitors.”
In order to compete against the likes of Amazon Web Services (AWS) and Microsoft Azure, Oracle launched a machine learning cloud database to take up more of the market and advance the cloud services the company already offers.
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“Oracle will soon deliver the world’s first autonomous “self-driving” database,” said Oracle CTO, Larry Ellison. “The new artificially intelligent Oracle database is fully automated and requires no human labor for administration. If a security vulnerability is detected, the database immediately patches itself while running. No other system can do anything like this. Best of all, we guarantee the price of running the Oracle Autonomous Database in the Oracle Cloud is less than half the cost of running a database in the Amazon Cloud.”
Oracles competitors flourished as Amazon revealed at 42% rise in cloud sales to $4.58bn across the quarter to September, as Microsoft Azure services boomed up 90% during the same time.
