(Reuters) – Oracle on Monday reported second-quarter revenue and adjusted profit that missed Wall Street expectations. This was due to intense competition and weaker-than-expected spending on database and cloud services as business customers cut their budgets amid economic uncertainty.
The company’s shares fell more than 7% in extended trading.
Despite Oracle’s healthy growth in the cloud sector, it competes with cloud giants such as Microsoft and Amazon, which have established significant presences in the space.
Wall Street’s expectations for AI companies are high, with bets that the technology will be a powerful growth engine in the future. The company’s stock has soared more than 80% so far this year.
Oracle reported second-quarter revenue of $14.06 billion, up 9% year over year, but below expectations of $14.11 billion, according to data compiled by LSEG.
To gain market share in a competitive environment, Oracle has partnered with these so-called cloud hyperscalers by embedding its database architecture within Microsoft’s Azure and Amazon’s web clouds, allowing customers to connect data across different applications. I made it possible.
The company’s cloud services and license revenue rose 12% to $10.81 billion in the quarter ended Nov. 30.
Oracle CEO Safra Katz said Oracle’s total cloud revenue this fiscal year will exceed $25 billion as the company invests heavily in upgrading its cloud architecture and integrating AI. .
On an adjusted basis, the company earned $1.47 per share, compared to expected earnings of $1.48 per share.
Remaining performance obligations, the most common measure of recorded revenue, rose 50% to $97 billion in the second quarter.
(Reporting by Zaheer Kachwala in Bengaluru; Editing by Alan Barona)
