Oracle's share price has taken a tumble after missing revenue expectations, despite sales growing.
The cloud applications and infrastructure leader’s total revenue for Q2 was $12.94 billion up four percent, but again this fell short of analyst expectations of $13.05 billion.
Oracle saw $9.7 billion of sales fall into its cloud services and license support unit, which saw sales climb 12 percent.
It is not a black-and-white picture, however. Demand for Oracle Cloud infrastructure has still increased overall, with remaining performance obligations (RPO) reaching $65 billion.
Oracle CEO Safra Catz shared his plans to ensure it meets this demand during the company’s quarterly earnings call: “Oracle is in the process of expanding 66 of our existing cloud data centers and building 100 new cloud data centers.
“We have to build 100 additional cloud data centers because there are billions of dollars more in contracted demand than we currently can supply.
“Cloud infrastructure demand is huge and growing at an unprecedented rate. In the next few weeks, we expect to sign a couple more billion-dollar Cloud Infrastructure contracts.”
There are some interesting comparisons to make with Oracle’s results this time last year.
Picking up on Catz’ expectation of major contract signings soon to take place, Oracle also announced multiple billion-dollar cloud infrastructure customer wins this time last year, which then included FedEx, Deutsche Bank, the Tokyo Stock Exchange, and more.
At that time, these deals propelled Oracle’s revenue growth up two percent compared to the previous quarter, and that is despite the market headwinds that it was facing, which had even caused Oracle to announce layoffs.
The tech industry was also in a worse financial state in December 2022 than it is now, although Oracle is not the only company to be affected by the current market conditions, with Alphabet also reporting the slowest cloud growth for 11 quarters.