Oracle reported adjusted earnings of 69 cents a share, a penny above consensus expectations and at the high end of the company's guidance. Revenue rose 3% to $9.6 billion for the quarter, above forecasts.
Software and cloud revenue rose 5% to $7.3 billion. Cloud software-as-a-service (SaaS), platform-as-a-service (PaaS) and infrastructure-as-a-service (IaaS) revenue rose 45% to $516 million. Hardware systems revenue rose 1% to $1.3 billion, Oracle said.
Shares were trading 8.3% higher to $44.58. Here's what analysts said.
Joel Fishbein, BMO Capital Markets (Outperform; $49 PT)
After three mixed quarters, Oracle posted a solid report. Software license was flat y/y CC, which continues to be below trend but didn't miss expectations while commentary suggested that the 12C cycle is starting to kick in. Cloud revenue continues to accelerate nicely (+41% y/y CC) although was slightly shy of expectations. Lower margins here could suggest that bookings-revenue conversion is taking longer than expected, but overall leading indicators such as bookings growth (140%+ y/y vs 54% in F1Q), bookings guidance ($1B+ new bookings in FY16), and customer additions support our bullish stance on Oracle's cloud business. Margins were in line. While clearly trends are improving and we continue to be positive on database cycle and strong cloud growth, there's probably not enough here to provide conviction-changing evidence to bulls or bears and expect contention around some divergence between management commentary and reported results to persist.
EPS numbers come in slightly due to currency but would have been essentially unchanged without the headwind. We still think revenue growth can accelerate, which in combination with below-trend valuation keeps us positive on ORCL as the best name in megacap software.