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How Oracle’s Cloud Offerings Performed in Fiscal 1Q17


Sep. 21 2016, Updated 9:05 a.m. ET

Oracle’s cloud revenue continues growth story

Oracle’s (ORCL) cloud offerings consist of SaaS (software-as-a-service), PaaS (platform-as-a-service), and IaaS (infrastructure-as-a-service) rose 59% to $969 million in fiscal 1Q17. In constant currency terms, the rise was 61%. Notably, the company added ~750 new SaaS customers.

As expected, Workday (WDAY) was not left out of the Oracle’s earnings’ discussion. Larry Ellison, Oracle’s CEO, stated: “In the first quarter alone, we added more than 750 new SaaS customers including 344 new SaaS Fusion ERP customers—that’s more ERP customers than Workday has sold in the history of their company.”

Oracle now has 1,671 and 11,000 IaaS and PaaS customers, respectively.

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Oracle’s increased initiatives for the IaaS space

Oracle is now very interested in the IaaS space and plans to introduce the 2nd generation of its IaaS offering this week. As usual, Ellison continued to point out how Oracle’s offering is better than Amazon.com’s (AMZN), stating: “Our Generation2 IaaS delivers twice the compute, twice the memory, four times the storage and ten times more I/O at a 20% lower price than Amazon Web Services.”

Strong cloud bookings and fiscal 2Q17 expectations

SaaS and PaaS billings rose 49% in fiscal 1Q17, which is likely the reason it raised its cloud revenue guidance. The company now expects 67% growth in its cloud SaaS and PaaS in fiscal 2017 in constant currency terms.

For fiscal 2Q17, Oracle expects overall revenue growth and EPS (earnings per share) to be in the range of 0%–3% and $0.59–$0.62, respectively. However, it expects 78%–82% growth in its SaaS and PaaS revenues in fiscal 2Q17.

In the next part, we’ll explore Oracle’s next margins.


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