(Bloomberg) — Oracle Corp. soared after reporting strong sales, signaling that the growth of its closely-watched cloud computing business is starting to stabilize.
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Cloud revenue jumped 25% to $5.1 billion in the period that ended in February, the company said Monday in a statement, surpassing Wall Street’s $5.06 billion estimate. Of that, $1.8 billion came from renting out computing power and storage over the internet and $3.3 billion from applications.
The Austin-based company, known for its database software, is focused on expanding its cloud infrastructure business to more forcefully compete with Amazon.com Inc., Microsoft Corp. and Alphabet Inc.’s Google. That effort has faced headwinds in recent quarters with growth rates falling — but showed evidence of stabilizing in the third quarter with sales gaining at nearly the same pace as the quarter before it.
“We expect to continue receiving large contracts reserving cloud infrastructure capacity,” Chief Executive Officer Safra Catz said in the company’s statement, adding that Oracle is “very rapidly” opening new cloud data centers to meet demand.
Oracle shares were up 6.5% in extended trading. The stock was down about 10% over the past six months through Monday’s close, lagging the iShares software ETF, which gained 16%.
Total sales in the fiscal third quarter increased 7.1% to $13.3 billion, roughly in line with analysts’ estimates, according to data compiled by Bloomberg. Profit, excluding some items, was $1.41 a share, compared with the average estimate of $1.38.
Sales of Fusion software for managing corporate finance increased 18% in the quarter from a year earlier. Revenue from NetSuite, enterprise planning tools aimed at small- and mid-sized companies, was up 21%. Revenue from both businesses were up 21% in the previous period.
(Updates headline, adds CEO comment in fourth paragraph and adds software-specific sales in seventh paragraph)
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Jessica Roberts is a seasoned business writer who deciphers the intricacies of the corporate world. With a focus on finance and entrepreneurship, she provides readers with valuable insights into market trends, startup innovations, and economic developments.
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