Oracle Corporation reported Tuesday a 9% year-on-year increase in its revenue for the first quarter of fiscal 2024 to $12.5 billion, narrowly missing expectations as rigid economic conditions dampened cloud spending by businesses.
Oracle faced a drop in cloud demand following the pandemic, as businesses are revising their digitization plans, hurting the company's sales as it tries to catch up in a segment dominated by bigger rivals such as Amazon Web Services and Microsoft.
In an earnings report Tuesday, the Texas-based company said its cloud services and license support revenues rose 13% to $9.5 billion from June to August, while cloud license and on-premise license revenues fell 10% to $800 million.
Operating income stood at $3.3 billion in the first quarter, while the company's net income soared 56% to $2.4 billion.
Oracle CEO Safra Catz said that the company's cloud infrastructure revenue surged 66% in the first quarter, outpacing the company's hyperscale cloud infrastructure competitors.
Operating cash flow rose 9% to $7 billion in the quarter ended August 31, and free cash flow jumped 21% to $5.7 billion.
Oracle stock took a hit from the less-than-expected revenues and fell 11.25% to $112.5 as of 07:42 pm GST.
The company's board of directors has approved a quarterly cash dividend of $0.40 per share of outstanding common stock due on October 26.
Artificial intelligence could be Oracle's most important new computer technology ever, said Oracle Chairman and CTO Larry Ellison, as billions of dollars are being invested in industries and products that rely on the technology, such as self-driving cars, molecular drug design, and voice user interface
"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," he said.
