Oracle Shares Tank 11% After-Hours as Cloud Revenue Misses Estimates
$Oracle(ORCL)$
Cloud revenue rose 34% to $8 billion, falling short of the $8.035 billion expected by analysts, according to estimates compiled by Bloomberg. Total revenue jumped 14% to $16.06 billion, compared with the average estimate of $16.205 billion.
Those misses outweighed a 15% increase in the company's remaining performance obligations, a measure of bookings, to $523 billion. That's better than the average of estimates that called for $519.4 billion. Investors also shrugged off a 38% beat in adjusted earnings, the biggest since at least 2015.
Adjusted earnings rose to $2.26 a share, from $1.47 a year earlier. That also exceeded consensus that called for $1.64 a share, according to estimates compiled by Bloomberg.
“MultiCloud database revenue from Amazon, Google and Microsoft grew at the incredible rate of 1,529% in Q1,” Oracle Chairman and CTO Larry Ellison said in the earnings release. “We expect MultiCloud revenue to grow substantially every quarter for several years as we deliver another 37 datacenters to our three Hyperscaler partners, for a total of 71."
That heavy concentration of revenue from hyperscalers has caused jitters among investors amid a growing debate over a potential bubble in artificial intelligence spending. Any pullback in capital spending later could magnify the risk for Oracle.
Before the financial results were released, Oracle's options market were pricing in a 10% move in the share price up or down a day later.
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