[NEW YORK] Oracle shares surged to a record in extended trading after the company posted a significant increase in bookings and gave an aggressive outlook for its cloud infrastructure business.
Known for its database software, Oracle has recently found success in the competitive cloud computing market. Earlier this summer, it inked an unprecedented commitment with OpenAI for 4.5 gigawatts worth of data centre capacity – enough energy to power millions of American homes. It also counts companies such as ByteDance’s TikTok and Nvidia as major cloud customers.
Such deals helped boost remaining performance obligations, a measure of bookings, to US$455 billion at the end of the fiscal first quarter, up from about US$138 billion at the end of the prior quarter, Oracle said on Tuesday (Sep 9).
Recent and some upcoming bookings will translate into a rapidly expanding cloud infrastructure business over the coming years, chief executive officer Safra Catz said. That unit will expand 77 per cent to US$18 billion this fiscal year, and continue to grow at an aggressive clip, reaching US$144 billion in annual revenue by the fiscal year ending in May 2030, she said. That outlook exceeded Wall Street estimates.
The shares soared 22 per cent in extended trading after closing at US$241.51. If those gains hold during regular market hours, it will surpass the last record high of US$256.43 set on Aug 6. Oracle’s stock was up 45 per cent this year to Tuesday’s close, four times the gain seen in the S&P 500.
“It was an astonishing quarter, and demand for Oracle Cloud Infrastructure continues to build,” Catz said. The company signed four multi-billion dollar contracts with three different customers in the quarter, and expects to sign up several additional customers in the coming months, she added, pushing remaining performance obligations to over US$500 billion.
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Cloud infrastructure revenue increased 55 per cent to US$3.3 billion, while analysts anticipated a 53 per cent expansion. Profit, excluding some items, was US$1.47 per share compared with the US$1.48 average estimate. BLOOMBERG