An overview of Oracle
Oracle Corp. (ORCL) is an enterprise software company that develops, manufactures, markets, distributes, and services database, middleware software, and applications software. It provides complete, open, and integrated business software, services, and hardware systems to customers that encompass all sizes and industries.
To learn more about middleware and applications software, please click here.
The enterprise software market grew to $407.3 billion in 2013, an increase of 4.8% year-over-year. Microsoft (MSFT) leads the market with a 16% market share. It’s followed by Oracle. IBM (IBM), SAP AG (SAP), and Symantec (SYMC) are other leading players that made it to the top five rankings.
The above chart shows the contribution of various operating segments towards Oracle’s consolidated revenues. Software and Cloud Revenue is the major operating segment that contributes 76% to total revenues. It’s followed by Hardware Systems Revenues and services revenues, which contribute 14% and 10%, respectively.
1Q15 earnings review
On September 18, 2014, Oracle announced its 1Q15 earnings. Its revenues and non-GAAP earnings per share (or EPS) of $8.6 billion and 62 cents per share didn’t meet analysts’ expectation of $8.72 billion and 64 cents per share, respectively. GAAP EPS were 48 cents, an increase of 2% on a year-over-year basis. The company reported non-GAAP operating income and operating cash flow (or OCF) of $3.8 billion and $6.7 billion, respectively. Oracle declared a quarterly dividend of 12 cents per share.
Software and Cloud revenue rose 6% to $6.6 billion. Software as a service (or SaaS) and platform as a service (or PaaS) cloud revenue increased 32% to $337 million. Infrastructure as a service (or IaaS) cloud revenue rose 26% to $138 million. Hardware systems revenue fell 8% to $1.2 billion. Management reported a 30% growth rate in their total cloud services business and a ~200% growth rate in their Fusion cloud applications business.
Change in management
Larry Ellison stepped down from his position as Oracle’s CEO to take the position of chief technology officer or CTO. Safra Catz and Mark Hurd, who currently holds Oracle’s president designation, will jointly hold the company’s CEO position.