US software company Oracle $ORCL+0.5% released its 1Q 2024 earnings results. Reported revenue was almost in line with expectations, but investors were not happy with cloud revenue growth. The stock is weakening by more than 10% in the pre-market.
Earnings
Revenue of $12.45 billion represented an 8.8% year-over-year increase. Excluding currency changes, this would be an 8% increase on average expectations of 8.52%.
Investors noted a slowdown in cloud revenue growth in particular. In comparison, the cloud application services and licensing support segment grew 36% in the last quarter (4Q) and 11% in the one just past. The company itself has also raised high expectations; last quarter, through the mouth of its CEO Safra Catz, the company said that cloud revenues will continue to grow.
The company's adjusted operating margin came in at 41%, above the average expectation of 40.2%.
Wall Street reaction
While most analysts have pointed out that the company has failed to meet high expectations for cloud growth, the long-term view of the company remains positive. "The positive long-term story with better cloud and AI elements remains, but in the short term the stock may be at a deadlock, especially given recent growth," said analysts at Barclays.
Dividend
The board approved a quarterly dividend of $0.40 per share. The record date falls on October 12 and the payout date on October 26.
I see the stock took a big hit. Double top and no breakout to the new one. Revenue is slightly below estimates. Investors here are probably more used to beating estimates.