Rising Oracle revenues signal end to turbulent cloud transition
The company rises on strong quarterly forecast driven by cloud services
Oracle delivered better than expected earnings for its fiscal fourth quarter, topping Wall Street estimates and marking a return to growth following a difficult period of restructuring and job losses.
The California tech firm's revenue rose 1% year on year, with its largest business segment, Cloud Services and License Support, delivering $6.80 billion in revenue.
Oracle executives pointed to growth in cloud applications such as NetSuite and Fusion, in a recent earnings statement. Its Fusion cloud application suites saw 32% revenue growth in the fiscal year, with NetSuite cloud apps revenues also up by 32%.
"Our high-margin Fusion and NetSuite cloud applications businesses are growing rapidly, while we downsize our low-margin legacy hardware business," said Oracle co-CEO, Safra Catz. "The net result of this shift away from commodity hardware to cloud applications was a Q4 non-GAAP operating margin of 47%, the highest we've seen in five years."
The results end a difficult quarter for the company, one that saw a major restructuring to focus more on cloud services. It was reported that 352 jobs would disappear as of 21 May, including 255 at its headquarters in California and 97 jobs from its Santa Clara campus.
More recently, the company announced a partnership with cloud rival Microsoft to deliver multi-cloud services such as Azure analytics and AI. This gave customers the ability to seamlessly use multiple clouds with much greater effectiveness. However, it was largely seen as somewhat of a concession by Oracle that it would be unable to keep pace with the likes of AWS and Google without help.
"As our cloud business grows, we will continually balance our resources and restructure our development group to help ensure we have the right people delivering the best cloud products to our customers around the world," an Oracle spokesperson said, speaking to Bloomberg.