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ORCL Stock Down 1%, Oracle Q1 2022 Revenue Fails to Meet Expectations

UTC by Daria Rud · 3 min read
ORCL Stock Down 1%, Oracle Q1 2022 Revenue Fails to Meet Expectations
Photo: Håkan Dahlström / Flickr

Oracle’s largest business unit of cloud services and licensing support generated revenue of $7.37 billion. It is up 6% compared to the same period last year and below the StreetAccount consensus estimate of $7.41 billion.

The largest supplier of database software Oracle Corporation (NYSE: ORCL) has reported its fiscal Q1 2022 earnings, with its revenue falling short of Wall Street expectations. As a result of missing the target, Oracle stock tanked.

Yesterday, Oracle shares ended at $88.89, or 0.88% down, and further declined by 1.90% to $87.20. Its market cap is $250.39 billion.

Oracle Fiscal Q1 2022 Results

In the fiscal Q1 2021, Oracle generated $9.73 billion in revenue in comparison with $9.77 billion analysts expected. Further, its adjusted earnings totaled $1.03 per share, which is up from the predicted 97 cents per share. According to Oracle, its revenue increased by 4% year over year in the quarter that ended on August 31. Oracle’s net income for the quarter totaled $2.9 billion.

Meanwhile, Oracle’s largest business unit of cloud services and licensing support generated revenue of $7.37 billion. It is up 6% compared to the same period last year and below the StreetAccount consensus estimate of $7.41 billion.

Holger Mueller from Constellation Research Inc commented:

“In its traditionally weak first quarter, Oracle did relatively well, growing at a low rate. The fact it showed growth on the application side as well as the technology side is a testament to the competitive features and capabilities of Oracle’s products.”

According to Oracle CEO Safra Catz, Oracle’s new infrastructure-as-a-service and software-as-a-service businesses have seen significant growth. Currently, these units account for more than 25% of the company’s overall revenue and have an annual run rate of $10 billion.

Safra Catz stated:

“Taken together, IaaS and SaaS are Oracle’s fastest-growing and highest-margin new businesses. As these two cloud businesses continue to grow, they will help expand our overall profit margins and push earnings per share higher.”

As for other Oracle’s businesses, its cloud license and on-premises license unit brought $813 million in revenue, which is down 8%. Further, hardware sales fell by 6% to $763 million, while services rose by 8% to $781 million.

Speaking of expenses, Oracle increased its capital expenditures by more than $1 billion. In contrast, this figure was $436 million in the year-ago quarter.

Looking Ahead

When talking about the next quarter outlook, Oracle CEO Safra Catz is predicting fiscal second-quarter earnings of $1.09 to $1.13 in earnings per share on 3% to 5% revenue growth.

“Cloud is fundamentally a more profitable business compared to on-premise, and as we look ahead to next year, we expect company operating margins will be the same or better than pre-pandemic levels,” stated she.

Meanwhile, Refinitiv analysts are expecting fiscal Q2 adjusted earnings to total $1.08 per share and revenue to make up $10.25 billion, which would mark a 5% growth.

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Daria Rud
Author Daria Rud

Daria is an economic student interested in the development of modern technologies. She is eager to know as much as possible about cryptos as she believes they can change our view on finance and the world in general.

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