Oracle reported better-than-expected profits in its fiscal third quarter on Wednesday, powered by the continued strength of its cloud business.
Shares of Oracle, which are up 15% this year, popped 3% in after-hours trading.
Net income climbed to $2.2 billion, or 53 cents per share, from $2.1 billion, or 50 cents per share, a year earlier. Excluding certain items, earnings came in at 69 cents, beating Wall Street analyst estimates of 62 cents.
Revenue rose 2% to $9.20 billion, but missed analyst estimates of $9.26 billion.
Oracle is bulking up its presence in the cloud in an effort to catch up with companies like Salesforce and Workday and it's working. Two of its cloud divisions, software-as-a-service and platform-as-a-service, logged eye-popping growth of 73% during the quarter. Cloud infrastructure revenue rose 17%. Overall, cloud revenue surged 62% to $1.2 billion.
"The hyper-growth we continue to experience in the cloud has rapidly driven both our SaaS and PaaS businesses to scale," said Oracle CEO Safra Catz. "Our new, large, fast growing, high-margin cloud businesses are driving Oracle's total revenue and earnings up and improving nearly every important non-GAAP business metric you care to inspect."
Oracle hasn't shied away from naming names when it comes to the competition and boasted that its cloud infrastructure tops Amazon Web Services in speed and cost. "Now our biggest customers can run their largest and most demanding Oracle database workloads in the Oracle Cloud – something that is absolutely impossible to do in the Amazon Cloud," said Oracle's billionaire founder and chairman Larry Ellison.
Meanwhile, Oracle's legacy software licensing business has continued to slow, with revenue slipping 3% to $6.2 billion during the quarter. Despite the decline, Oracle still looks to this business for 70% of its revenues. Oracle's hardware business is also struggling and revenues slid 9% to roughly $1 billion in the quarter.
Oracle boosted its dividend from 15 cents to 19 cents on Wednesday.
