- Oracle (ORCL) stock dropped 4.31% after hours following a 4.11% decline to $148.79, as Q3 earnings of $1.47 per share and $14.13 billion in revenue missed estimates of $1.49 and $14.38 billion, with Q4 guidance of $1.61 – 1.65 EPS and $15.43 – 15.72 billion revenue also below consensus.
- CEO Safra Catz reported a record $48 billion in Q3 sales contracts, driving Remaining Performance Obligations up 63% to over $130 billion, fueling a projected 15% revenue increase next fiscal year, while CTO Larry Ellison highlighted a 244% surge in GPU consumption for AI training and a 92% rise in Database MultiCloud revenue.
- Oracle announced a 25% dividend increase to $0.50 per share, payable April 23, 2025, and is doubling data center capacity this year to meet soaring AI demand, integrating its AI Data Platform with models like ChatGPT and Grok for secure, private data analysis.
Oracle Corporation (ORCL) faced a challenging Monday as its stock slipped 4.31% in after-hours trading, following a 4.11% drop to close at $148.79, reflecting investor reactions to its fiscal 2025 Q3 earnings and a cautious Q4 outlook. The company reported Q3 earnings of $1.47 per share, missing the $1.49 consensus by $0.02, with revenues climbing 6.4% year-over-year to $14.13 billion but falling short of the $14.38 billion expected. Looking ahead, Oracle’s Q4 guidance further tempered expectations, projecting earnings per share of $1.61 to $1.65 against a $1.79 consensus, and revenue growth of 8-10% in USD – translating to $15.43 – 15.72 billion versus $15.91 billion anticipated – hampered by a $0.01 – 0.02 foreign exchange hit and a $0.03 loss from an investment. Yet, beneath these numbers lies a story of robust growth in Oracle’s AI and cloud sectors, signaling a company poised to capitalize on the booming demand for artificial intelligence solutions.
CEO Safra Catz highlighted a standout achievement: Oracle secured sales contracts worth over $48 billion in Q3, pushing its Remaining Performance Obligations (RPO) up 63% to exceed $130 billion. This backlog, bolstered by deals with tech giants like OpenAI, xAI, Meta (META), Nvidia (NVDA), and Advnaced Micro Devices (AMD), underpins Catz’s projection of a 15% revenue increase in the next fiscal year starting June. She also teased the upcoming Stargate contract, a potential game-changer for Oracle’s ambitions in AI training and inferencing, areas where the company is already seeing explosive demand. Chairman and CTO Larry Ellison echoed this optimism, noting that GPU consumption for AI training surged 244% over the past 12 months, while Database MultiCloud revenue from Microsoft (MSFT), Google (GOOG), and Amazon (AMZN) jumped 92% in the last three months. Ellison emphasized Oracle’s plan to double its data center capacity this year to meet this “record-level” customer demand, positioning the company as a critical infrastructure provider in the AI ecosystem.
Oracle’s innovation shines through its Oracle AI Data Platform, which integrates advanced vector capabilities in Version 23ai of its database with leading AI models like OpenAI’s ChatGPT, xAI’s Grok, and Meta’s Llama, enabling secure, private data analysis for clients. This move caters to the soaring need for AI inferencing on proprietary data, a trend Ellison sees as a major growth driver. On the financial front, Oracle sweetened its appeal to shareholders by boosting its quarterly dividend by 25%, from $0.40 to $0.50 per share, payable on April 23, 2025, to those on record by April 10, 2025—a decision made without input from Ellison, the largest stockholder. Despite near-term misses, Oracle’s strategic focus on AI and cloud infrastructure, backed by a massive sales pipeline, suggests a trajectory that could overshadow today’s stock dip as it taps into the transformative potential of artificial intelligence.
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