Cloud powers Oracle revenue to grow 3 percent to $11.3 billion in Q4

Oracle OpenWorld 2017Oracle announced its revenues rose 3 percent to $11.3 billion in Q4, and 6 percent to $39.8 billion in fiscal 2018.

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Q4

Cloud Services and License Support revenues rose 8 percent to $6.8 billion. Cloud License and On-Premise License revenues fell 5 percent to $2.5 billion.

Oracle reported operating income of 8 percent to $4.4 billion with operating margin of 39 percent. Oracle posted net income of $4.1 billion.

Oracle executives noted that SaaS, PaaS and IaaS together generated $1.7 billion in the fourth quarter.

Fiscal year 2018

Oracle said Cloud Services and License Support revenues grew 10 percent to $26.3 billion. Cloud License and On-Premise License revenues dropped 4 percent to $6.2 billion.

Oracle’s operating income was $13.7 billion with operating margin of 34 percent. Oracle’s net income was $3.8 billion.

Oracle, which makes most of its revenue in the Americas, has reported about 28 percent of its revenue in the latest period came from Europe, Middle East and Africa and about 16 percent from the Asia Pacific region, including Japan.

The Redwood City, Calif., company said in February it planned to quadruple the number of data-center complexes over the next two years.

Oracle CEO, Mark Hurd said: “Our strategic Fusion ERP and HCM SaaS cloud applications suite revenues grew over 50 percent in the fourth quarter, and we expect continued strong growth from our Fusion SaaS suites throughout FY19.”

The US-based business software company did not give a break up of revenue from its cloud segments during the quarter.

“Oracle’s move to change its reporting structure, which masks the performance of its cloud infrastructure and applications segments, overshadowed the Q4 result,” Daniel Morgan Senior Portfolio Manager Synovus Trust Company said.

Oracle, which has cloud deals with AT&T and Bank of America, is a late entrant to the cloud business and has been trying to catch up with rivals such as Amazon.com, Microsoft and Salesforce.com.

Oracle Chairman Larry Ellison said some of the company’s largest customers have now begun the process of moving their on-premise Oracle databases to the Oracle Cloud.
AT&T is moving thousands of databases and tens of thousands of terabytes of data into the Oracle Cloud, Ellison said.

Technology Business Review said Oracle’s earnings release brought less transparency through the aggregation of SaaS, PaaS & IaaS, and license support revenues into a single revenue item, under the guise of BYOL success and to more accurately attribute the BYOL-related support to measured cloud success.

It should be noted that the reorganization brings no additional insight into the BYOL-related success. “TBR instead sees the change as though Oracle has reduced its cloud and software revenue to line items that only distinguish between one-time license sales and recurring revenue, without consideration for deployment mode,” TBR senior analyst Meaghan McGrath said.

TBR said the ambiguity created by aggregating these different businesses leaves room for uncertainty about the performance of the segments that were previously so important to Oracle that the company pegged executive compensation directly to each SaaS and PaaS & IaaS revenue and margin performance.