Oracle Corporation (NASDAQ:ORCL) reported that its financial results for its fiscal 2016 first quarter showing that its earnings exceeded the expectations of Wall Street analysts. However, its revenue missed estimates.
The stock price of Oracle declined more than 1% to $37.68 per share during the extended-hours trading following the release of its quarterly financial results on Wednesday.
Oracle financial results
Oracle said its non-GAAP earnings were $0.53 per share on $8.4 billion in revenue. Wall Street analysts expected the company to deliver earnings of $0.52 per share on $8.53 billion in revenue. According to the company, its total revenue should have been 7% higher if the currency rates remained constant.
According to the company, its revenue from Cloud plus On-Premise Software declined 2% to $6.5 billion. Oracle’s revenue from Cloud Software as a service (Saas and platform as a Service (PaaS) increased 34% to $51 million. Its revenue from Cloud Infrastructure as a service (IaaS) climbed 16% to $160 million.
Oracle said its total revenues from On-Premise Software declined 4% to $5.8 million, hardware revenues dropped 3% to $1.1 billion and service revenues rose 1% to $862 million.
Oracle aims to double revenue from SaaS and PaaS
In a statement, Oracle CEO Safra Catz said, “Our traditional on-premise software business plus our new cloud business grew at a combined rate of 6% in constant currency. This growth is being driven by new SaaS and PaaS annual recurring cloud subscription contracts which almost tripled in the quarter.”
She also stated that Oracle plans to double the company’s SaaS and PaaS margins over the next two years from 40% to 80%. “Rapidly growing cloud revenue combined with a doubling of cloud margins will have a huge impact on EPS growth going forward,” said Catz.
On the other hand, Oracle Chairman and CTO Larry Ellison said,
“We are still on target to book between $1.5 and $2.0 billion of new SaaS and PaaS business this fiscal year. That means Oracle would sell between 50% more and double the amount of new cloud business than salesforce.com plans to sell in their current fiscal year. Oracle is the world’s second largest SaaS and PaaS company, and rapidly closing in on number one.”
