Oracle Stock Jumps on Q4 Earnings Beat, Upbeat Cloud Forecast
Oracle ORCL stock rose more than 7% in extended-hours trading after the company reported its fourth-quarter fiscal 2025 earnings, wherein both top and bottom lines beat the Zacks Consensus Estimate. Oracle also raised its annual revenue growth forecast, betting on robust demand for its cloud offerings from companies deploying artificial intelligence.
The company reported fourth-quarter fiscal 2025 non-GAAP earnings of $1.70 per share, which beat the Zacks Consensus Estimate by 3.66% and increased 5% year over year in USD and 3% in constant currency (cc).
Revenues rose 11% in USD and cc year over year to $15.9 billion, driven by continued momentum from its Oracle Cloud Infrastructure ('OCI') business, including winning cloud-computing contracts from AI-focused startups. The figure beat the Zacks Consensus Estimate by 2.31%, encouraging investors' enthusiasm for the company's ascendant cloud business.
Revenues from the Americas increased 12.2% year over year to $10.03 billion and accounted for 63.1% of total revenues. Europe/Middle East/Africa climbed 12.9% year over year to $3.99 billion and contributed 25.1% of total revenues. The remaining revenues came from Asia Pacific, which increased 3.9% year over year to $1.87 billion.
ORCL's cloud infrastructure business is racing to build out computing capacity for AI startups and other users of the cloud. The company has long tried to find its footing in the lucrative industry of renting computing power and storage, which is dominated by much larger rivals led by Amazon.com AMZN -owned Amazon Web Services, Alphabet GOOGL -owned Google and Microsoft MSFT.
Shares of Oracle have gained 5.8% so far this year, outperforming the Zacks Computer and Technology sector's growth of 2.4%. Shares of Microsoft have returned 12.1% year to date, while Amazon and Google have declined 2.8% and 6.3%, respectively.
ORCL's Q4 Top-Line Details
Cloud services and license support revenues increased 14% year over year and in cc to $11.7 billion, driven by OCI, strategic cloud applications and cloud database services. Cloud license and on-premise license revenues increased 9% year over year (up 8% at cc) to $2 billion.
The company's strategic SaaS products are seeing strong bookings and higher renewal rates, contributing to accelerated growth.
Total cloud revenues (SaaS plus IaaS) were up 27% year over year at $6.7 billion. Cloud Infrastructure (IaaS) revenues came in at $3 billion, up 52% year over year. Cloud Application (SaaS) revenues of $3.7 billion increased 12% year over year.
Fusion Cloud ERP (SaaS) revenues came in at $1 billion, up 22% year over year. NetSuite Cloud ERP (SaaS) revenues of $1 billion increased 18% year over year.
Hardware revenues were $850 million, up 1% year over year (flat in cc). Services revenues decreased 2% year over year and in cc to $1.34 billion.
Oracle is currently live in 23 cloud regions with its database in cloud services and has another 47 planned. Database subscription revenues, which include database license support, were up 7%.
Infrastructure subscription revenues in the quarter, which include license support, were $6.7 billion, up 19%. Application subscription revenues, which include product support, were $5 billion, up 8% year over year.
The company's strategic back-office SaaS applications now have annualized revenues of $9.3 billion and were up 20%. Software license revenues were up 8% to $2 billion.
Oracle Cloud Infrastructure consumption revenues were up 62% and demand continues to dramatically outstrip supply. Infrastructure cloud services now have an annualized revenues of nearly $12 billion. Cloud database services, which were up 31%, now have annualized revenues of $2.6 billion. Autonomous Database consumption revenue was up 47% on top of the 27% growth reported last year.
As on-premise databases migrate to the cloud, either on OCI directly or through the company's database at cloud services with Azure, Google or AWS, Oracle now expects that cloud database revenues collectively will be the third driver of revenue growth alongside OCI and strategic SaaS.
Operating Details of Oracle
The non-GAAP total operating expenses increased 16% year over year and in cc to $8.86 billion.
The non-GAAP operating income was $7.03 billion, up 5% year over year and 4% at cc. The non-GAAP operating margin was 44%, which contracted 244 basis points (bps) on a year-over-year basis and 266 bps in cc.
ORCL's Q4 Balance Sheet & Cash Flow
As of May 31, 2025, Oracle had cash & cash equivalents and marketable securities of $11.2 billion compared with $17.8 billion as of Feb. 28, 2025.
Operating cash flow came in at $20.8 billion while this Zacks Rank #4 (Sell) company reported a negative free cash flow of $394 million, respectively.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
ORCL's remaining performance obligations now stand at $138 billion, up $8 billion sequentially and 41% from last year.
Cloud RPO grew 56% on top of the 80% growth last year and now represents nearly 80% of total RPO. Approximately 33% of the total RPO is expected to be recognized as revenues over the next 12 months.
The company purchased more than 1 million shares for a total of $150 million. Oracle also announced that its board of directors declared a quarterly cash dividend of 50 cents per share of outstanding common stock. This increased dividend will be paid to stockholders of record as of the close of business on July 10, 2025, with a payment date of July 24, 2025.
Guidance
For the first quarter of fiscal 2026, Oracle provided specific financial targets assuming current currency exchange rates. Total revenues are expected to grow 11-13% in cc and 12-14% in USD. Total cloud revenues are projected to grow 26-30% in both cc and USD. Non-GAAP earnings per share are expected to be in the range of $1.44-$1.48 in cc (representing 4-6% growth) and between $1.46 and $1.50 in USD (representing 5-7% growth). The guidance assumes a base tax rate of 19%, though management noted that one-time tax events could cause actual rates to vary. Currency is expected to have a modest 2 cents positive effect on EPS and a flat to 1% positive effect on revenues, depending on rounding.
Oracle provided robust guidance for fiscal 2026, expressing strong confidence in accelerating growth rates. The company expects total cloud revenues (applications plus infrastructure) to grow more than 40% in cc, representing a significant acceleration from the 24% growth achieved in fiscal 2025. Cloud infrastructure revenues are projected to grow even more dramatically at over 70%, up from 51% in the prior year. Total company revenues are expected to reach at least $67 billion, representing 16% growth in cc and exceeding their previous guidance by more than $1 billion. RPO is anticipated to grow more than 100% in fiscal 2026, reflecting strong contracted future business.
Oracle also indicated that capital expenditures will increase substantially to more than $25 billion in fiscal 2026, up from $21.2 billion in fiscal 2025, as they work to meet overwhelming demand from their backlog and bring more capacity online. Management expressed confidence that this increased investment will drive further revenues and profit growth acceleration.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
Oracle Corporation (ORCL): Free Stock Analysis Report
Alphabet Inc. (GOOGL): Free Stock Analysis Report
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Globe and Mail
an hour ago
- Globe and Mail
This Global REIT Is Riding Asia's AI Wave Straight to the Bank
Equinix (NASDAQ: EQIX) is a powerhouse in digital infrastructure and part of a new class of innovative real estate investment trusts (REITs) laying the groundwork to become the future of real estate investing. It has a strong history of capitalizing on international technology trends that traditional REITs can't match. With a strategic expansion in Indonesia, Equinix is positioning itself for explosive growth, and Wall Street is beginning to take notice. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » Why this digital land grab is a big deal Asia is becoming the global epicenter of digital demand, and Indonesia is leading the charge. It's attracting major investments in cloud computing, artificial intelligence (AI), and fintech. By entering the market early and scaling aggressively, Equinix is developing a strategic advantage that will be tough for competitors to match. Indonesia's data center market is projected to grow at a compound annual growth rate (CAGR) of 8% to $3.79 billion through 2030. Cloud giants like Amazon Web Services and Alphabet 's Google Cloud have already announced major investments, but their platforms need physical infrastructure to function. That's what makes Equinix's expansion into Jakarta so strategic. Its newly opened data center is no ordinary server farm. Built to support intensive computing tasks like training and running AI systems, Equinix is creating the critical backbone necessary for digital business growth in Indonesia. This could make Equinix one of tech's most valuable players. The average analyst price target sees Equinix at $1,009, 10% percent higher than it currently sits, a nod to its forward-looking strategy and savvy market expansion. What gives Equinix the edge In addition to its Indonesian assets, Equinix operates 270 data centers across five continents and 35 countries. It has a great track record with its customers, retaining 98% of them. As of Q1 2025, Equinix reported over $2.1 billion in annual adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). This strong combination of global scale, customer loyalty, and reliable earnings is exactly what sets the stage for Equinix's move into Jakarta to be a success. While it's not the highest-dividend REIT, Equinix pays investors 2% annually. But considering its growth trajectory looks more like a tech company than a traditional REIT, that's not too bad. The risks to watch Equinix does face potential pressures though. Their total capital expenditures for 2025 are projected between $3.4 billion and $3.7 billion, with non-recurring expenditures accounting for around 95% of that. This significant investment is partly due to the need to modernize legacy data centers to meet new levels of demand. While these upgrades are essential, they represent a substantial financial commitment that could impact short-term profitability. That said, Equinix ended Q1 2025 with roughly $2.95 billion in cash and cash equivalents and an ample $7.6 billion in total available liquidity. The balance sheet looks sturdy enough to fund expansion without putting shareholders at undue risk. Geopolitical tensions are also on the periphery of investor concerns. As Equinix operates globally, it must navigate regulatory, monetary, and political risks in emerging markets. But these risks appear to be well managed by the company's leadership, and its long-term leases, high renewal rates, and diversified customer base provide stability. It's time to stake your claim in the future of tech real estate Some investors still think REITs are too risky and don't deliver enough value. Those perceptions are often based on underperforming traditional sectors like retail or office space. That's where tech-powered REITs like Equinix come in. Gone are the days when investing in real estate meant buying a piece of something on the ground. Now you're buying into the cloud. Even in comparison to peers like Digital Realty, Equinix still stands out. It has a stronger international footprint, a more premium client base, and better historical uptime. If you're looking for a REIT that combines growth potential with resilience in the digital age, Equinix is arguably a top-tier pick. AI is only as powerful as the infrastructure behind it, and Equinix is building the digital backbone on which the future will run. Jakarta may just be one dot on the map, but it signals Equinix is putting itself at the forefront of the global shift. With recurring revenue, global scale, and a pioneering foothold in high-growth markets like Indonesia, this REIT could quietly become one of the most important tech stocks of the next decade. Investors looking to profit from AI's global expansion without the volatility of pure-play tech stocks may want to give Equinix a closer look. It might not be a flashy choice, but it's in a solid state and could be the smartest upgrade your portfolio makes this year. Should you invest $1,000 in Equinix right now? Before you buy stock in Equinix, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Equinix wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $664,089!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $881,731!* Now, it's worth noting Stock Advisor 's total average return is994% — a market-crushing outperformance compared to172%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 9, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Philippa Main has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Digital Realty Trust, and Equinix. The Motley Fool has a disclosure policy.
Globe and Mail
2 hours ago
- Globe and Mail
Meta Platforms (META) Reportedly Held Acquisition Talks with Perplexity AI
Meta Platforms (META) reportedly held acquisition talks with Perplexity AI, an artificial intelligence search startup, before ultimately deciding to invest heavily in another AI company, Scale AI. According to Bloomberg, the discussions between Meta and Perplexity did not result in a deal, and both companies walked away without pursuing the acquisition. Neither Meta nor Perplexity have commented publicly on the matter. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter Instead, Meta announced earlier this month that it would invest $14.3 billion in Scale AI, which allowed it to acquire a 49% stake in the company and value it at over $29 billion. As part of the deal, Scale's CEO Alexandr Wang will join Meta to lead its new 'superintelligence' division, which focuses on developing artificial general intelligence (AGI). For context, AGI refers to AI systems that can understand, learn, and apply knowledge across a wide range of tasks at a human-like level of intelligence. This move highlights Meta's shift toward building more advanced AI systems that go beyond narrow task-based models. Founded in 2016, Scale AI helps train generative AI models by connecting them with a large network of human experts. Meta's significant investment in the company shows that CEO Mark Zuckerberg is determined to strengthen the company's position in the AI market. And Zuckerberg is not the only one, as many other tech giants have invested heavily in AI startups ever since Microsoft's blockbuster deal with OpenAI in 2023. Is Meta a Buy, Sell, or Hold? Turning to Wall Street, analysts have a Strong Buy consensus rating on META stock based on 42 Buys, three Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average META price target of $707.16 per share implies that shares are almost fairly valued. See more META analyst ratings
Globe and Mail
4 hours ago
- Globe and Mail
'Only Lean Teams Remaining': Intel Stock (NASDAQ:INTC) Slips as Intel Outsources Marketing
Imagine my surprise to discover that, last year, almost to the day, I made the joke that I was about to make here today. There, I pointed out a Dilbert strip that noted that cutting 'marcom', or marketing / communications, is part of a 'death spiral' for businesses. Chip stock Intel (INTC) decided to let history repeat itself nearly 11 months later by outsourcing its marketing department altogether. Intel shares dropped similarly to what happened the last time they cut marketing, and lost modestly in Friday afternoon's trading. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter Back in August 2024, Intel was planning to cut its marketing department as part of a move to cut costs, a move that has only expanded with the arrival of CEO Lip-Bu Tan. And now, the cuts continue, as Intel moves its marketing operations to Accenture (ACN). As it turns out, Intel will be turning to a combination of Accenture and artificial intelligence (AI) to do the job. Worse, Intel believes that Accenture will '…do a better job connecting with customers than Intel's own marketing organization has,' reports suggest, which is absolutely not a phrase you want on your resume. The result? 'The transition of our marketing and operations functions will result in significant changes to team structures, including potential headcount reductions, with only lean teams remaining,' noted a statement from Intel. There is also a possibility that some elements of Intel's marketing will be obliged to train their replacements. Another Price Cut As bad as the news was for Intel's marketing operations, it did get better for Intel's customer base. Reports noted that Intel had once again cut prices on the Core Ultra 7 265KF processor. This is the second such cut in as many months, reports note. The processor is now not only priced at its lowest level ever, but is now 40% cheaper than it was when it first hit shelves. The downside, for those considering a processor buy, is that the F variants—of which this is one—does not include a graphics processing unit (GPU) included. Thus, those using this processor will need a separate graphics card to go with it. Still, with that kind of price cut, a better graphics card could be added to the list for about the same price, and potentially, some savings as well. Is Intel a Buy, Hold or Sell? Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on one Buy, 26 Holds and four Sells assigned in the past three months, as indicated by the graphic below. After a 30.88% loss in its share price over the past year, the average INTC price target of $21.30 per share implies 0.35% upside potential. See more INTC analyst ratings Disclosure Disclaimer & Disclosure Report an Issue
