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Key Takeaways from Oracle’s Fiscal 3Q15 Earnings

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Apr. 3 2015, Published 1:07 p.m. ET

Oracle’s 3Q15 earnings

On March 17, 2015, Oracle (ORCL) announced its fiscal 3Q15 quarterly earnings. In 3Q15, Oracle reported revenue and non-GAAP (generally accepted accounting principles) EPS (earnings per share) of $9.327 billion and $0.68 per share, respectively.

Oracle’s EPS beat analysts’ estimates. However, on the revenue front it fell short of analysts’ estimates. Analysts were expecting revenue and EPS of $9.51 billion and $0.68 per share, respectively.

Management stated that currency fluctuations and a strong dollar led to flattish growth in overall revenue. It subdued the good performance of its cloud business. On a constant currency basis, total revenue increased by 6% on a YoY (year-over-year) basis.

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Operating performance

In 3Q15, software and cloud revenue grew by merely 1% to $7.17 billion. Cloud SaaS (software-as-a-service) and PaaS (platform-as-a-service) revenue grew by 30% on a YoY basis. Revenue from IaaS (infrastructure-as-a-service) grew by 28% on a YoY basis. Hardware systems revenue was $1.3 billion. This was a decline of 2% on a YoY basis. Services revenue stood at $858 million. This was a decline of 3% on a YoY basis.

Amazon (AMZN) and Salesforce.com (CRM) are leading players in the cloud and SaaS space. This was Oracle’s key focus in its 3Q15 earnings release. Oracle also claimed that it’s almost 3x of Workday (WDAY).

GAAP and non-GAAP operating income grew to $3.4 billion and $4.2 billion, respectively. The GAAP and non-GAAP operating margin stood at 36% and 45%, respectively. GAAP and non-GAAP EPS stood at $0.56 and $0.68, respectively.

Global growth

In 3Q15, the Americas, EMEA (Europe, Middle East and Africa), and Asia-Pacific contributed 55%, 30%, and 14.8% to the overall revenue, respectively.

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