Oracle (ORCL) Tops Q1 EPS by 1c, Revenue Falls Short

September 16, 2015 4:00 PM EDT

(Updated - September 16, 2015 4:04 PM EDT)

Oracle (NYSE: ORCL) reported Q1 EPS of $0.53, $0.01 better than the analyst estimate of $0.52. Revenue for the quarter came in at $8.45 billion versus the consensus estimate of $8.53 billion.

The strengthening of the U.S. dollar compared to foreign currencies had a significant impact on results in the quarter. Total Revenues were$8.4 billion, down 2% in U.S. dollars but up 7% in constant currency. Cloud plus On-Premise Software Revenues were $6.5 billion, down 2% in U.S. dollars and up 6% in constant currency. Total Cloud Revenues were $611 million, up 29% in U.S. dollars and up 34% in constant currency. Cloud software as a service (SaaS) and platform as a service (PaaS) revenues were $451 million, up 34% in U.S. dollars and up 38% in constant currency. Cloud infrastructure as a service (IaaS) revenues were $160 million, up 16% in U.S. dollars and up 23% in constant currency. Total On-Premise Software Revenues were $5.8 billion, down 4% in U.S. dollars but up 4% in constant currency. Total Hardware Revenues were $1.1 billion, down 3% in U.S. dollars but up 6% in constant currency. Total Services Revenues were $862 million, up 1% in U.S. dollars and up 10% in constant currency.

"Our traditional on-premise software business plus our new cloud business grew at a combined rate of 6% in constant currency," saidOracle CEO, Safra Catz. "This growth is being driven by new SaaS and PaaS annual recurring cloud subscription contracts which almost tripled in the quarter. As our cloud business scales-up, we plan to double our SaaS and PaaS cloud margins over the next two years -- starting from 40% this just completed Q1, to approximately 60% this coming Q4, and then on up to 80% two years from now. Rapidly growing cloud revenue combined with a doubling of cloud margins will have a huge impact on EPS growth going forward."

"In Q1 SaaS and PaaS revenue was up 38% in constant currency -- in Q4 that revenue growth rate will be over 60%," said Oracle CEO,Mark Hurd. "That cloud revenue growth rate is being driven by a year-over-year bookings growth rate of over 150% in Q1. Our increasing revenue growth rate is in sharp contrast to our primary cloud competitor's revenue growth rates which are on their way down."

"We are still on target to book between $1.5 and $2.0 billion of new SaaS and PaaS business this fiscal year," said Oracle Executive Chairman and CTO Larry Ellison. "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, but we are rapidly closing in on number one."

For earnings history and earnings-related data on Oracle (ORCL) click here.



Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

Earnings, Hot Earnings, Management Comments

Related Entities

Mark Hurd, Larry Ellison, Earnings