Oracle Earns 53 Cents per Share

After the closing bell, Oracle (ORCL) reported fiscal Q1 earnings of 53 cents per share which was one penny ahead of expectations. Once again, the strong dollar was a big factor. Total revenues fell 2% to $8.4 billion but rose by 7% in constant currency. Oracle earned 62 cents per share in last year’s Q1.

“Our traditional on-premise software business plus our new cloud business grew at a combined rate of 6% in constant currency,” said Oracle CEO, Safra Catz. “This growth is being driven by new SaaS and PaaS annual recurring cloud subscription contracts which almost tripled in the quarter. As our cloud business scales-up, we plan to double our SaaS and PaaS cloud margins over the next two years — starting from 40% this just completed Q1, to approximately 60% this coming Q4, and then on up to 80% two years from now. Rapidly growing cloud revenue combined with a doubling of cloud margins will have a huge impact on EPS growth going forward.”

“In Q1 SaaS and PaaS revenue was up 38% in constant currency — in Q4 that revenue growth rate will be over 60%,” said Oracle CEO, Mark Hurd. “That cloud revenue growth rate is being driven by a year-over-year bookings growth rate of over 150% in Q1. Our increasing revenue growth rate is in sharp contrast to our primary cloud competitor’s revenue growth rates which are on their way down.”

“We are still on target to book between $1.5 and $2.0 billion of new SaaS and PaaS business this fiscal year,” said Oracle Executive Chairman and CTO Larry Ellison. “That means Oracle would sell between 50% more and double the amount of new cloud business than salesforce.com plans to sell in their current fiscal year. Oracle is the world’s second largest SaaS and PaaS company, but we are rapidly closing in on number one.”

Posted by on September 16th, 2015 at 4:39 pm


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