Here's our initial take on Oracle's (ORCL 13.24%) fiscal 2025 fourth-quarter financial report.
Key Metrics
| Metric | Q4 FY24 | Q4 FY25 | Change | vs. Expectations |
|---|---|---|---|---|
| Revenue | $14.3 billion | $15.9 billion | +11% | Beat |
| Earnings per share (adjusted) | $1.63 | $1.70 | +4% | Beat |
| Cloud infrastructure revenue | $2.0 billion | $3.0 billion | +52% | n/a |
| Cloud application revenue | $3.3 billion | $3.7 billion | +12% | n/a |
Cloud Infrastructure Soars
Oracle's cloud infrastructure revenue rose by 52% year over year in the fourth quarter of fiscal 2025 to $3.0 billion, and the company sees even stronger growth ahead. Oracle expects cloud infrastructure revenue to soar by more than 70% in fiscal 2026 as the company's data center investments pay off. Total cloud revenue growth, which includes applications as well, is expected to reach 40% in fiscal 2026, up from 24% in fiscal 2025.
MultiCloud database revenue from third-party cloud providers more than doubled in the fourth quarter compared to the third quarter. Oracle has 23 MultiCloud datacenters operating today, with another 47 set to open over the next year. Oracle Cloud@Customer revenue grew by 104% year over year as clients opted to bring Oracle's cloud technology into their own data centers.
The booming cloud business pushed total revenue up 11% year over year to $15.9 billion. Adjusted earnings per share rose by just 4% year over year, partly due to the costs associated with rapidly building out new data centers. Cloud services and license support expenses jumped 32% in the fourth quarter, quicker than overall cloud revenue growth.
Immediate Market Reaction
Share prices of Oracle were up about 7% in after-hours trading on Wednesday soon after the fourth-quarter report was released. Oracle beat analyst expectations on all fronts, and the company's upbeat forecast for accelerating cloud infrastructure growth was icing on the cake. Going into the report, Oracle stock was up about 6% year-to-date.
What to Watch
Oracle's cloud infrastructure growth is partly being driven by the company's investments in artificial intelligence (AI) infrastructure. While Oracle's public cloud business struggled to take off in the pre-AI era, growth has accelerated dramatically as AI companies race to secure computing capacity. Oracle continues to build out new data centers at a rapid pace as demand soars, and as long as the AI boom doesn't peter out, the company's cloud infrastructure business should continue to thrive.
