Oracle posts strong Q1 financials after coronavirus-induced slump

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Oracle posts strong Q1 financials after coronavirus-induced slump

Oracle shot back to growth in the first quarter after what the tech giant described as a coronavirus-induced slump, the company revealed Thursday in its quarterly financials.

After ending fiscal 2020 in decline, Oracle revenue climbed 2 percent year-over-year to $9.4 billion in Q1, powered by its Fusion and NetSuite ERP solutions, which respectively grew 33 percent and 23 percent.

As to guidance for the coming quarter that also positively surprised investors, “it’s really following the path we were on before COVID really hit in March,” CEO Safra Catz said in the earnings call for the quarter that ended August 31.

“The things that are going very well and growing and getting larger and larger is everything that’s associated with the cloud,” she told investors.

Oracle is particularly encouraged to see the trend in how revenue is breaking down across its many product lines, she said.

“Our growing businesses are growing faster and are now larger than our declining businesses,” Catz said.

Oracle Executive Chairman and CTO Larry Ellison told investors the company he founded is unique as the only one that spans both cloud application and cloud infrastructure markets—competing in Software-as-a-Service against the likes of Salesforce and Workday and Infrastructure-as-a-Service against Microsoft and Amazon.

Those unrivaled synergies position Oracle to succeed across the stack, he said.

Oracle’s massive base of on-premises database customers, its cloud-based business application customers, and “surprises like Zoom and 8x8” are all rapidly adopting Oracle Cloud Infrastructure, the company’s second-generation public cloud, Ellison said.

Zoom Communications, which “may be the fastest company ever to have its company name become a verb,” and 8x8, which is “moving entirely from AWS to Oracle Cloud,” highlight the appeal of Oracle’s cloud for videoconferencing vendors, Ellison said.

“There’s not a major videoconferencing company that isn’t talking to Oracle about moving to Oracle Cloud,” he added.

Investors want to know if Oracle can carry its lead in the database market into the cloud era, Ellison said.

Citing a recent IDC report praising its cloud infrastructure, as well as the emergence of a one-of-a-kind technology in the Oracle Autonomous Database, Ellison rhetorically asked, “where do you think the Oracle database install base is going to go?”

A lot of customers had been waiting for Oracle’s public cloud to reach maturity after trying to run Oracle databases and software on AWS with poor results, Ellison said.

“They tried. It just didn’t work very well. So they decided maybe they should wait. So they did,” he told investors. “You’d expect we’re much better at running Oracle applications than anybody else, and we are.”

Oracle is starting to see those previously on-premises customers opt for large-scale migrations to the autonomous database both running on OCI and the on-premises Cloud@Customer offering—a combination of database and infrastructure that offers superior security, reliability, performance and “dramatically lower cost than AWS,” Ellison said.

And “pretty much all medium and large Oracle application customers” will also become Oracle infrastructure customers in the not-too-distant future, Ellison said.

Oracle’s 7,000 Fusion ERP customers are beginning to build data warehouses for their ERP data, as “everyone does,” he said, and they’re building those using autonomous database and Oracle analytics on Oracle Cloud.

To meet that demand, Oracle is opening new cloud data centers around the world at record pace. There are 26 regions live, compared to 24 for AWS, Ellison noted, with 10 to be added in the next nine months.

“We’re not slowing down, we’re speeding up,” Ellison said.

Oracle’s Q1 earnings-per-share of 93 cents beat analyst expectations of 86 cents. The strong results and ambitious guidance sent Oracle stock climbing in after-hours trading, from a market close of $57.33 to $59 at the time of this publication.

This article originally appeared at crn.com

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