Oracle comes up short on revenue but touts AI cloud contracts

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2 years ago

September 11, 2023

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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.

WATCH: Salesforce’s AI goals more of a ’24 story than this year, says Jefferies’ Brent Thill

Technology

CNBC Daily Open: Capex is the number to look at amid Big Tech earnings

Published

7 hours ago

October 30, 2025

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CNBC Daily Open: Capex is the number to look at amid Big Tech earnings

Signage at Google headquarters in Mountain View, California, US, on Thursday, Oct. 23, 2025.

Benjamin Fanjoy | Bloomberg | Getty Images

The news is coming in fast and thick. Strap in.

First, interest rates.

The U.S. Federal Reserve lowered rates by 25 basis points, as expected by traders. But Chair Jerome Powell cautioned that another cut in December, which the market had been pricing in with more than 90% certainty, “is not a foregone conclusion.”

His statement threw cold water on the markets, sending most stocks lower and Treasury yields higher.

Next, Big Tech earnings.

Alphabet, Meta and Microsoft reported earnings that beat analyst expectations on the top and bottom lines. Notably, Alphabet’s quarterly revenue topped $100 billion for the first time.

And finally capital expenditure.

Capex is really the big story here. Alphabet, Meta and Microsoft are saying they are going to spend much more money.

Alphabet not only raised its capex estimate for fiscal year 2025 to a “a range of $91 billion to $93 billion” from its earlier forecast of $75 billion to $85 billion, but is now expecting “a significant increase” in capex for 2026, according to finance chief Anat Ashkenazi.

Meta hiked the low end of its capex guidance for the year to $70 billion from $66 billion. “Being able to make a significantly larger investment here is very likely to be a profitable thing” CEO Mark Zuckerberg said in the earnings call.

And Microsoft’s Chief Financial Officer Amy Hood said capex in the firm’s fiscal first quarter came in at $34.9 billion — higher than the $30 billion figure estimated in July. The capex growth rate for fiscal 2026 will also surpass that in 2025, Hood added.

The crux is that spending on artificial intelligence isn’t going to slow down, at least for the next year, thanks to increasing demand for AI services. Fears of a bubble can be deferred for now.

That’s it for the day. We all can take a breather — at least until headlines emerge from U.S. President Donald Trump and China’s Xi Jinping’s meeting later in the day.

What you need to know today

And finally…

Chinese President Xi Jinping and U.S. President Donald Trump

Sergey Bobylev | Kent Nishimura | Reuters

Trump-Xi meeting nears with high stakes and hopes, but few details

A high-stakes meeting between U.S. President Donald Trump and Chinese President Xi Jinping could yield a breakthrough in the trade relationship between the two economic superpowers.

But while both the Trump administration and Beijing are projecting optimism ahead of the sit-down, specifics about the summit remain unclear — and some experts are skeptical of the White House’s confidence on achieving a favorable outcome.

— Kevin Breuninger

Technology

Wall Street hates Meta’s AI spending guidance raise. We don’t

Published

7 hours ago

October 30, 2025

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Wall Street hates Meta's AI spending guidance raise. We don't

Technology

Samsung’s third-quarter profit more than doubles, beating estimates as chip recovery gathers pace

Published

7 hours ago

October 30, 2025

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Samsung’s third-quarter profit more than doubles, beating estimates as chip recovery gathers pace

Headquarters of Samsung in Mountain View, California, on October 28, 2018.

Smith Collection/gado | Archive Photos | Getty Images

Samsung Electronics reported a rebound in earnings on Thursday, with operating profit more than doubling from the previous quarter on strength from its chip business.

Here are Samsung’s third-quarter results compared with LSEG SmartEstimate, which is weighted toward forecasts from analysts who are more consistently accurate:

Revenue: 86.1 trillion Korean won ($60.5 billion) vs. 85.93 trillion won
Operating profit: 12.2 trillion won vs. 11.25 trillion won

The South Korean technology giant’s quarterly revenue was up 8.85% from a year earlier, while its first-quarter operating profit climbed 32.9% year-over-year.

Samsung shares popped nearly 4% in early trading in Asia.

The earnings represent a bounce back from the June quarter, which had been weighed down by a massive slump in Samsung’s chip business. Operating profit increased by 160% compared to June, while revenue increased by 15.5% over the same period.

Samsung Electronics, South Korea’s largest company by market capitalization, is a leading provider of memory chips, semiconductor foundry services and smartphones.

Samsung’s chip business reported a 19% increase in sales from the June quarter, with its memory business setting an all-time high for quarterly sales, driven by strong demand from artificial intelligence.

The third-quarter operating profit also beat Samsung’s own guidance of around 12.1 trillion Korean won.

Chip Business

Samsung Electronics’ chip business posted an operating profit of 7.0 trillion Korean won in the third quarter, up 81% from the same period last year, and an over tenfold increase from last quarter.

Chip revenue increased to 33.1 trillion won, up 13% from last year.

Also known as its Device Solutions division, Samsung’s chip business encompasses memory chips, semiconductor design and its foundry units.

The unit benefited from a favorable price environment, while quarterly revenues reached a record high on expanded sales of its high-bandwidth memory (HBM) chips — a type of memory used in artificial intelligence computing.

Samsung has found itself lagging behind memory rival SK Hynix in the HBM market, after it was slow to secure major contracts with leading AI chip Nvidia. However, in a positive sign for the company, it reportedly passed Nvidia’s qualification tests for an advanced HBM chip last month.

A report from Counterpoint Research earlier this month found that Samsung had reclaimed the top spot in the memory market ahead of SK Hynix in the third quarter after falling behind its competitor for the first time the quarter prior.

MS Hwang, research director at Counterpoint Research, told CNBC that Samsung’s third-quarter performance was a clear result of a broader “memory market boom,” as well as rising prices for general-purpose memory.

Heading into 2026, Samsung said its memory business will focus on the mass production of its next-generation HBM technology, HBM4.

Smartphones

Samsung’s mobile experience and network businesses, tasked with developing and selling smartphones, tablets, wearables and other devices, reported a rise in both sales and profit.

The unit posted an operating profit of 3.6 trillion won in the third quarter, up about 28% from the same period last year.

The company said earnings were driven by robust flagship smartphone sales, including the launch of its Galaxy Z Fold7 device.

Samsung forecasted that the rapid growth of the AI industry would open up new market opportunities for both its devices and chip businesses in the current quarter.