Oracle (ORCL) delivered a concerning performance in its third-quarter fiscal 2025 results, missing analyst expectations on both earnings and revenue fronts. The company reported non-GAAP earnings of $1.47 per share, missing the Zacks Consensus Estimate by 0.68%, while revenues of $14.13 billion lagged estimates by 1.59%. Though Oracle attempted to spotlight continued momentum in its Oracle Cloud Infrastructure (“OCI”) business, the numbers tell a different story — one of a company struggling to meet the lof ...

Vladimir Dimitrov, CFA is a former strategy consultant within the field of brand and intangible assets valuation. During his career in the City of London he has been working with some of the largest global brands within the technology, telecom and banking sectors. He graduated from the London School of Economics and is interested in finding reasonably priced businesses with sustainable long-term competitive advantages.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of ...

Revenue Composition - The cloud and license business accounted for 85% of total revenues on a trailing 4-quarter basis [93]. - Cloud services revenues represented 44% and 43% of total revenues for the three- and nine-month periods ended February 28, 2025, respectively, compared to 38% and 37% for the same periods in 2024 [95]. - The hardware business represented 5% of total revenues on a trailing 4-quarter basis [99]. - The services business accounted for 10% of total revenues on a trailing 4-quarter basis [103]. - The cloud and license business accounted for 86% of total revenues in the third quarter of fiscal 2025, up from 84% in the prior year [116]. Revenue Growth - Total revenues increased by $850 million (6%) in the third quarter and $2.8 billion (7%) in the first nine months of fiscal 2025 compared to the prior year periods [117]. - Cloud and license revenues rose by $917 million (8%) in the third quarter and $3.1 billion (10%) in the first nine months of fiscal 2025, while hardware revenues decreased by $51 million (7%) and $138 million (6%) respectively [117]. - The Americas region contributed 75% to total revenue growth in the third quarter and 74% in the first nine months of fiscal 2025, while the EMEA region contributed 18% [117]. - The Americas region contributed 74% of the cloud services revenue growth in Q3 2025, while EMEA and Asia Pacific contributed 20% and 6%, respectively [125]. Operating Expenses - Total operating expenses increased by $242 million (3%) in the third quarter and $920 million (3%) in the first nine months of fiscal 2025, primarily due to higher cloud services and license support expenses [118]. - Total expenses for the cloud and license business increased by $461 million (11%) in Q3 2025 and $1.4 billion (12%) in the first nine months, primarily due to higher infrastructure and employee-related expenses [126]. - Total expenses for the hardware business decreased by $27 million (10%) in Q3 2025 and $143 million (17%) in the first nine months, aligning with lower revenues [131]. - Total expenses decreased by $91 million (down 8%) in Q3 2025 and $257 million (down 7%) in the first nine months compared to the prior year [135]. Profit Margins - In constant currency, total operating margin increased to 31% in the third quarter of fiscal 2025, up from 28% in the prior year [116]. - Total margin for the cloud and license business was $7.629 billion (63% margin) in Q3 2025, reflecting a 6% increase from the prior year [130]. - Total margin increased by 40% in Q3 2025 and 13% in the first nine months compared to the prior year, with total margin percentage rising to 20% [134]. - Total margin for the hardware business was $450 million (64% margin) in Q3 2025, showing a 5% decrease from the prior year [130]. Research and Development - Research and development investments are anticipated to improve existing products and develop new offerings across all business segments [100]. - Research and development expenses increased by $181 million (8%) in the third quarter and $517 million (8%) in the first nine months of fiscal 2025 compared to the prior year [118]. - The company plans to continue significant investments in research and development to maintain its competitive position [138]. Acquisitions and Investments - The company has invested billions in acquisitions to enhance its corporate strategy and may continue to do so as opportunities arise [104]. - The total carrying value of investments in Ampere Computing Holdings LLC was $1.5 billion as of February 28, 2025 [107]. - The company believes its current cash, cash equivalents, and marketable securities will be sufficient to meet working capital and capital expenditure requirements, as well as fund future acquisitions and dividend payments [175]. Cash Flow and Capital Management - Cash, cash equivalents, and marketable securities increased by 67% to $17.8 billion as of February 28, 2025, compared to $10.7 billion as of May 31, 2024 [160]. - Net cash provided by operating activities was $14.7 billion in the first nine months of fiscal 2025, a 16% increase from $12.6 billion in the same period of fiscal 2024 [163]. - Net cash used for investing activities increased by 173% to $12.5 billion in the first nine months of fiscal 2025, compared to $4.6 billion in the same period of fiscal 2024 [163]. - Free cash flow decreased by 53% to $5.8 billion in the trailing four quarters ended February 28, 2025, compared to $12.3 billion in the previous year [169]. Debt and Interest - Interest expense for the third quarter of fiscal 2025 was $892 million, a 2% increase compared to $876 million in the same period of fiscal 2024, primarily due to the issuance of $14.0 billion in senior notes [151]. - Interest income increased by 22% to $135 million in the third quarter of fiscal 2025, compared to $111 million in the same period of fiscal 2024 [154]. - During the first nine months of fiscal 2025, the company issued $14.0 billion of senior notes with various maturity dates, including $1.75 billion of 6.00% senior notes due August 2055 [172]. Stock-Based Compensation - Stock-based compensation expenses totaled $1.198 billion in the third quarter and $3.374 billion in the first nine months of fiscal 2025, reflecting an increase from the prior year [122]. - The cumulative potential dilution from stock-based awards since June 1, 2021, has been an annualized rate of 1.7% per year, with a maximum potential dilution of 5.8% as of February 28, 2025 [177]. - The company’s stock repurchase program has substantially offset the dilutive effect of its stock-based compensation program in recent years [177]. Tax and Other Income - Provision for income taxes increased to $512 million in the third quarter of fiscal 2025, a 10% increase from $464 million in the same period of fiscal 2024 [158]. - Non-operating income, net increased by $111 million in the first nine months of fiscal 2025, primarily due to a $76 million decrease in foreign currency losses and a $38 million increase in interest income [156].

Shares of Oracle (ORCL -3.22%) are sliding on Tuesday. The stock lost 3.2% as of 2:45 p.m. ET today and was down as much as 7.5% earlier in the day. The drop comes as the S&P 500 declined 0.5% and the Nasdaq Composite gained 0.2%.The tech company reported mixed quarterly results that fell short of expectations while providing ambitious long-term projections.Mixed earnings reportOracle announced third-quarter earnings of $1.47 per share on sales of $14.1 billion. Both figures missed Wall Street estimates of ...

Core Insights - Oracle Corporation reported a strong close to fiscal Q3 '25 with Remaining Performance Obligations (RPO) growing to $130 billion, indicating that demand continues to outstrip supply of data center capacity [1] Company Performance - The growth in RPO suggests robust demand for Oracle's services, particularly in the data center segment, which is facing challenges due to limited compute capacity [1] Analyst Background - The analysis is supported by insights from a buy-side equity analyst with over 5 years of industry experience, who has a macro-value-oriented approach to investment analysis [1]

Oracle Corporation (NYSE: ORCL) saw its stock decline over 3% on March 11, trading at $143.21 at press time, after the company’s third-quarter earnings for Fiscal Year 2025 fell short of analyst expectations.Despite strong cloud growth and record-breaking contract signings, investors reacted to weaker-than-expected guidance for the upcoming quarter, raising concerns about margin pressures and capital expenditures.Oracle one-day stock price. Source: Google FinanceEarnings miss despite strong cloud performanc ...

Oracle TodayORCLOracle$143.43 -5.36 (-3.60%) 52-Week Range$112.78▼$198.31Dividend Yield1.12%P/E Ratio35.03Price Target$178.92Add to WatchlistOracle’s NYSE: ORCL CQ1 2025 price correction is an opportunity for investors because the market is resetting its outlook and not reversing. The market reset is due to the timing of AI’s tremendous impact on Oracle. Unlike NVIDIA NASDAQ: NVDA, which claims most of the AI glory to date, Oracle’s success lies in the long-term application of AI.Get Oracle alerts:Details ...

Oracle is expected to place massive orders for Nvidia's new artificial intelligence chip.In today's video, I discuss recent updates affecting Nvidia (NVDA -5.07%). To learn more, check out the short video, consider subscribing, and click the special offer link below.*Stock prices used were the after-market prices of March 7, 2025. The video was published on March 7, 2025. ...

JR Research is an opportunistic investor. He was recognized by TipRanks as a Top Analyst. He was also recognized by Seeking Alpha as a "Top Analyst To Follow" for Technology, Software, and Internet, as well as for Growth and GARP. He identifies attractive risk/reward opportunities supported by robust price action to potentially generate alpha well above the S&P 500. He has also demonstrated outperformance with his picks. He focuses on identifying growth investing opportunities that present the most attracti ...

Financial Data and Key Metrics Changes - The company reported a record booking quarter, adding $48 billion to its backlog, with a remaining performance obligation (RPO) balance of $130 billion, up 63% year-over-year from $80 billion last year [7][22] - Total cloud revenue for SaaS and IaaS was $6.2 billion, up 25%, with SaaS revenue at $3.6 billion, up 10%, and IaaS revenue at $2.7 billion, up 51% [12][13] - Total revenues for the quarter were $14.1 billion, up 8% from last year, with non-GAAP EPS at $1.47, up 4% in USD [20][18] Business Line Data and Key Metrics Changes - Infrastructure cloud services now have an annualized revenue of $10.6 billion, with OCI consumption revenue up 57% [14][15] - Cloud database services revenue was up 28%, with annualized revenue of $2.3 billion, and Autonomous Database consumption revenue up 42% [15][17] - Application subscription revenues were $4.8 billion, up 6%, while software license revenues were down 8% to $1.1 billion [17][18] Market Data and Key Metrics Changes - The company marked a milestone with its 101st cloud region coming online, with expectations to have more cloud regions than competitors combined [8][9] - The multi-cloud business grew 200% in the last three months, indicating strong demand across various hyperscalers [31] Company Strategy and Development Direction - The company is focused on AI training and inferencing, with a new AI data platform that allows existing database customers to utilize AI models [32][30] - The company expects total cloud infrastructure revenue for fiscal year 2025 to grow faster than 50%, with a target of $66 billion in revenue for FY '26 [25][24] - The company is committed to returning value to shareholders through technical innovation, acquisitions, and prudent use of debt [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting revenue targets, citing strong demand for cloud services and AI capabilities [25][66] - The company anticipates significant increases in RPO and revenue as capacity comes online and demand continues to grow [66][67] Other Important Information - The company repurchased nearly 1 million shares for a total of $150 million and increased the quarterly dividend by 25% [23][24] - The company expects capital expenditures for fiscal year 2025 to be around $16 billion, more than double the previous year [21] Q&A Session Summary Question: Can you expand on Stargate and Oracle's unique value add? - Oracle's technology advantage allows for building large AI clusters that run faster and more economically than competitors, translating to economic advantages in securing large contracts [37][38] Question: How is demand unfolding across different environments? - Demand is strong across multi-cloud, OCI, and dedicated services, with significant growth in bookings and revenue expected [44][46] Question: What is the state of AI training versus inferencing opportunities? - The training business is growing rapidly, but inferencing is seen as a larger opportunity due to the vast number of Oracle databases available for training AI models [56][64] Question: How should we understand CapEx trajectory given RPO strength? - The company starts data centers smaller than competitors and grows based on demand, leading to higher utilization and lower CapEx [100][101]