Oracle Q2 2016-17 results: cloud growth but overall revenue flat

Oracle’s Q2 results for fiscal year 2017 indicate 70% growth in cloud revenue from $649m in same year ago quarter to $1.1bn, 12% of overall revenue, flat at $9bn

Oracle’s second quarter results for 2016-17 indicate growth in cloud revenue, which makes up 12% of overall revenue. This marks an increase of 5% of cloud as a proportion of overall revenue compared with the same quarter last year.

Total revenue for the quarter was flat compared with 2015 at $9bn. Cloud software as a service (SaaS) and platform as a service (PaaS) revenues were $878m.

At the company’s 2016 Oracle Open World conference, in San Francisco, its chairman and CTO Larry Ellison staked a novel claim for infrastructure as a service (IaaS), core territories for companies such as Amazon Web Services (AWS), Google, Microsoft and Rackspace. He singled out AWS as a supplier with a weak, in his view, cloud database offering.

Oracle’s IaaS revenue for the quarter was $222m.

“Our database as a service cloud revenue was $100m for the quarter, driving growth in our overall database business. We expect our database as a service and IaaS businesses will grow even faster than our skyrocketing SaaS business,” said Ellison.

“A lot of people were taken by surprise when IDC ranked Oracle number one in enterprise SaaS, surpassing and overcoming its 15-year head-start. Stay tuned. More surprises coming. I think we’re going to do even better with IaaS and the Oracle database in the cloud.”

The company declared an operating profit of $3bn, and net profit of $2bn for the quarter. It said had it not been for the US dollar strengthening against other currencies and an unforeseen Egyptian currency exchange loss, its reported earnings per share would have been two cents higher – 48 cents rather than 46 cents.

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“For four consecutive quarters our cloud SaaS and PaaS revenue growth rate has increased. This growth rate acceleration has driven our quarterly cloud revenue over the $1bn mark. When crossed the $1bn milestone, its SaaS and PaaS subscription growth rate had slowed down to 36%,” said Oracle co-CEO Safra Catz.

“We expect to book over $2bn in new annually recurring cloud business this year alone,” said fellow co-CEO Mark Hurd. “And, with the acquisition of NetSuite, we plan on being the number one cloud applications service provider for companies with fewer than 1,000 employees.”

Oracle’s $9.3bn acquisition of cloud applications company NetSuite – in which Ellison has always held a significant stake – completed in November 2016.  

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