On the strength of its surging cloud business, Oracle Corp. reported net income of $3.23 billion for the fourth quarter, blowing past analyst estimates and sending shares spiking 10.6% to a record $51.25 in after-market trading Wednesday, according to a report from Reuters. The company’s adjusted revenue, excluding items, was $10.94 billion, or 89 cents per share. The average analyst estimate, according to Reuters, was 78 cents per share.
In their post-earnings call, company executives highlighted success in their cloud business as driving the surprising numbers. “We sold more than $2 billion in cloud annually recurring revenue. This is the second year in a row that we sold more cloud ARR than Salesforce.com,” founder and chief technology officer Larry Ellison said in a statement.
“In the coming year, I expect more of our big customers to migrate their Oracle databases and database applications to the Oracle Cloud,” Ellison said in a statement.
Co-CEO Mark Hurd said two-thirds of customers buying Oracle’s cloud Enterprise Resource Planning Software in the quarter were new customers.
The company reported total cloud revenue of $1.36 billion for the quarter, up 58.4%. In May, Oracle signed a deal under which AT&T Inc. would move some of its large-scale databases to the Oracle cloud platform.
“After several years of struggling to find its footing in cloud, Oracle seems to have turned the corner and heads into its fiscal 2018 with significant momentum,” Edward Jones analyst Josh Olson said.
Oracle is considered a late entrant to the cloud market, but has doubled down on efforts to build its cloud-based services business. Oracle acquired NetSuite, its largest purchase to date, and other companies to increase its competitiveness in the business line, according to Reuters.
The company’s hardware revenue declined 13.2%, to $1.11 billion, and new licenses fell 5.1% to $2.63 billion.
Oracle shares had never before cracked the $47 line in regular trading, MarketWatch reported. If they stay around $51, the company would be worth over $200 billion.