Oracle's second-quarter fiscal results fell short of Wall Street's expectations as robust growth in cloud services was offset by declines in revenues from its hardware and services divisions. Adjusted earnings per share increased to $1.47 for the three-month period ending in November, up from $1.34 the previous year, yet just shy of the consensus estimate of $1.48 determined by FactSet.
Revenue rose by 9% to $14.06 billion, but it did not meet analysts' forecast of $14.12 billion, leading to a 6.8% drop in shares during after-hours trading. The hardware and services divisions reported revenue declines of 4% and 3%, respectively, totaling $728 million and $1.33 billion. Meanwhile, cloud services and license support sales experienced a 12% increase, reaching $10.81 billion, and the cloud license and on-premise license segment saw a 1% rise to $1.2 billion. Cloud revenue continues to impress, soaring 24% year-over-year to $5.9 billion, putting the company on track to surpass $25 billion in cloud revenue for the fiscal year.
Chief Executive Safra Catz noted in a statement, "Record level (artificial intelligence) demand drove Oracle cloud infrastructure revenue up 52% in the second quarter, a much higher growth rate than any of our hyperscale cloud infrastructure competitors." Moreover, Oracle's remaining performance obligations -- which represent future commitments arising from contractual relationships -- surged 49%, resulting in a total of $97 billion..