Oracle comes up short on revenue but touts AI cloud contracts
Larry Ellison, Oracle’s chairman and technology chief, speaks at the Oracle OpenWorld conference in San Francisco on September 16, 2019.
Justin Sullivan | Getty Images
Oracle shares moved 9% lower in extended trading on Monday after the database software maker disclosed revenue and revenue guidance that were lighter than expected.
Here’s how the company did:
- Earnings: $1.19 per share, adjusted, vs. $1.15 per share as expected by analysts, according to LSEG.
- Revenue: $12.45 billion vs. $12.47 billion as expected by analysts, according to LSEG.
With respect to guidance, Oracle called for adjusted net income of $1.30 to $1.34 per share and 5% to 7% revenue growth in the fiscal second quarter. Analysts polled by LSEG had predicted $1.33 in adjusted earnings per share and $13.28 billion in revenue, which implies 8% revenue growth.
Oracle’s revenue grew 9% year over year in the fiscal first quarter that ended Aug. 31, according to a statement. Net income rose to $2.42 billion, or 86 cents per share, compared with $1.55 billion, or 56 cents per share, in the year-ago quarter.
In June 2022, Oracle closed its $28.2 billion acquisition of Cerner, the electronic health record software company, and now Oracle is in “accelerated transition” of Cerner to the cloud, slowing down its revenue growth, Safra Catz, Oracle’s CEO, said on a conference call with analysts.
“This transition is resulting in some near-term headwinds to the Cerner growth rate as customers move from licensed purchases, which are recognized upfront, to cloud subscriptions which are recognized ratably,” she said.
Oracle’s cloud services and license support segment produced $9.55 billion in revenue, up 13% year over year and above the StreetAccount consensus of $9.44 billion. But the cloud license and on-premises license segment posted $809 million in revenue, which was off 10% and lower than the $892.7 million StreetAccount consensus.
Hardware revenue, at $714 million, declined 6% year over year. Analysts polled by StreetAccount were looking for $739.6 million.
Revenue from cloud infrastructure, totaling $1.5 billion, increased 66%, slowing from 76% in the prior quarter. Oracle remains smaller than Amazon, Google and Microsoft in the category.
“As of today, AI development companies have signed contracts to purchase more than $4 billion of capacity in Oracle’s Gen2 Cloud. That’s twice as much as we had booked at the end of Q4,” Larry Ellison, company chair and technology chief, was quoted as saying in the statement.
During the quarter, Oracle announced new database hardware, Micros point-of-sale workstations and artificial intelligence features in its Fusion Cloud Human Capital Management software. Ellison said during the conference call with analysts that xAI, Tesla CEO Elon Musk’s recently announced AI startup, would use Oracle’s cloud services. Ellison invested in Tesla shares and held a board seat at the electric automaker until August 2022.
Excluding Monday’s after-hours move, Oracle shares are up 55% so far this year, while the S&P 500 has risen about 17% over the same period.
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Courtesy: Uber Eats
Uber said Monday that Pierre-Dimitri Gore-Coty, one of the company’s longest-tenured top executives and the head of is delivery business is leaving after almost 13 years.
Gore-Coty joined Uber as a general manager in France in 2012, and worked his way up to become vice president of mobility for the Europe and Middle East region four years later, according to his LinkedIn profile. He was named senior vice president of delivery in 2021.
“It’s hard to imagine Uber without Pierre, because there hasn’t been much Uber without Pierre,” CEO Dara Khosrowshahi said in a statement that was part of a regulatory filing. “As one of our first employees, he was a driving force behind our global Mobility expansion and stepped up to run Uber Eats just weeks before the first Covid lockdowns.”
The company didn’t say what Gore-Coty plans to do next.
Uber also said that Andrew Macdonald, the company’s senior vice president of mobility and business operations, will become chief operating officer, reporting to Khosrowshahi. Macdonald, 41, will oversee the company’s global mobility, delivery and autonomous businesses in addition to “key cross-platform functions like membership, customer support, safety, and more,” the filing said.
Gore-Coty is one of 11 people listed on Uber’s executive team page. Macdonald is the only one who has worked at the company longer. He joined in May 2012, four months before Gore-Coty, according to LinkedIn.
“These last nearly 13 years have been the ride of a lifetime,” Gore-Coty said in the statement. “It was a true team effort, and I’m so proud of what we’ve built and the impact we’ve had on daily life in cities around the world.”
Uber shares were little changed in extended trading after closing on Monday at $83.64. The stock is up 39% this year, while the Nasdaq is about flat.
Last month, the company reported first-quarter results that beat on earnings but missed on revenue. A month earlier, the Federal Trade Commission sued Uber, alleging that the company engaged in “deceptive billing and cancellation practices” related to its Uber One subscription service.
In an interview with CNBC’s “Squawk Box,” Khosrowshahi characterized the lawsuit as “a bit of a head-scratcher for us.”
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Packages with the logo of Amazon are transported at a packing station of a redistribution center of Amazon in Horn-Bad Meinberg, western Germany, on Dec. 9, 2024.
Ina Fassbender | Afp | Getty Images
German antitrust regulators warned Amazon on Monday that the company’s pricing mechanisms for third-party sellers could run afoul of competition laws.
The Federal Cartel Office said in its preliminary assessment that Amazon’s pricing controls limit the visibility of merchants’ products and, “based on non-transparent marketplace rules,” interfere with their freedom to set prices.
Amazon uses algorithms and statistical models to calculate certain price caps for products, the Cartel Office said. Products that are flagged as having “prices that are too high” or “prices that are not competitive” can then be demoted in search results, excluded from advertising or removed from the buy box, they added.
The buy box is the listing that pops up first when a visitor clicks on a particular product, and the one that gets purchased when a shopper taps “Add to Cart.”
“Competition in online retail in Germany is largely determined by Amazon’s rules for the trading platform,” Federal Cartel Office President Andreas Mundt said in a statement. “Since Amazon competes directly with other marketplace retailers on its platform, influencing competitors’ pricing, even in the form of price caps, is fundamentally questionable from a competition perspective.”
Amazon’s pricing practices not only threaten sellers’ businesses, but could also harm other retailers by deterring them from offering lower prices, the Cartel Office said.
An Amazon spokesperson said the company strongly disagrees with the Cartel Office’s preliminary findings. They added that any changes to Amazon’s pricing mechanisms would be “bad for customers and selling partners.”
“If Amazon is prevented from helping people find competitively priced offers, it will lead to a bad shopping experience for them, as we’d need to promote uncompetitive or even abusive pricing in our store,” the spokesperson said in a statement. “This would mislead customers into thinking they’re getting good value when, in reality, they’re not.”
Amazon can provide feedback to the Cartel Office on its preliminary assessment before it reaches a final decision.
Amazon in 2022 reached a deal with European Union antitrust regulators who were investigating its use of seller data and buy box practices. As part of the settlement, Amazon agreed to display a second buy box on products sold in Europe when there is a second competing offer that’s different on price or delivery.
The U.S. Federal Trade Commission is also probing Amazon’s use of pricing algorithms on its sprawling third-party marketplace as part of a wide-ranging antitrust lawsuit filed in 2023. Amazon has said the FTC’s complaint is “wrong on the facts and the law.”
The case is set to go to trial in October 2026.
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