Oracle reported better-than-expected quarterly results as its key cloud applications businesses continued to benefit from the shift to remote work.
For the second quarter, the software giant’s revenue rose nearly 2% to $9.80 billion while net income increased 5.7% to $2.44 billion. On an adjusted basis, it earned $1.06 per share.
Analysts had expected earnings of $1.00 per share on revenue of $9.79 billion.
“Our highly profitable multibillion-dollar Fusion and NetSuite Cloud ERP applications businesses grew revenue 33% and 21%, respectively, in Q2,” Oracle CEO Safra Catz said in a news release. “These two strategic cloud applications businesses are major contributors to Oracle’s increased operating earnings and consistent earnings per share growth.”
As CNBC reports, cloud services “are more in demand this year because the coronavirus has forced many corporate workers to telecommute.”
Cloud services and license support, Oracle’s largest business segment, generated $7.11 billion in second-quarter revenue, up 4% year over year and above the $7.04 billion consensus estimate among analysts. Second-generation cloud-infrastructure revenue grew 139% in the quarter, according to Catz.
Smaller parts of Oracle’s business declined, with revenue from cloud licenses and on-premises licenses down 3%, hardware revenue down 3%, and services revenue off by 7%.
“The pandemic affects us in some ways negatively, in some ways positively, simply because of our size and breadth of customer base, it affects them differently,” Catz said in an earnings call.
“And so obviously our hospitality customers have had a very difficult time of it in the main. Some of our retail customers have done horribly, some have done very, very well,” she added.
Looking ahead, the CEO expects earnings of $1.09 to $1.13 in the third quarter and 2% to 4% annualized revenue growth. Analysts had been expecting $1.04 in earnings and $9.95 billion in revenue, which translates to 1.5% growth.
For the cloud apps, “We expect [the] rapid share and revenue growth trend to continue as both Gartner and IDC rank Oracle’s ERP suite number one in the cloud.”