Oracle continues to see strong growth in its cloud business, which consists of its cloud software-as-a-service (SaaS), platform-as-a-service (PaaS), and infrastructure-as-a-service (IaaS). It reported total cloud revenues for the quarter of $1.2 billion, up 62 percent from the same period last year.
While its on-premises software revenue still accounts for 67 percent of its revenue — $6.2 billion — Oracle is seeing that area slow down significantly, decreasing 3 percent year-over-year. This revenue is comprised of its new software licenses, which reported revenue of $1.4 billion, and its software license updates, which came in at $4.8 billion.
“We continue to see the outside growth rates in our cloud business, especially when compared with our key competitors who’re all seeing slowing growth,” said Oracle CEO Safra Catz on yesterday’s call. “Next year I expect our cloud revenue will be larger than our new software license revenue.”
Oracle claims to be the fastest growing cloud company in the business compared to its competitors like Amazon Web Services (AWS), Microsoft Azure, IBM Cloud, Google Cloud Platform, and Salesforce.com.
In January, the company announced three new cloud regions in Reston, Virginia; London; and an unspecified location in Turkey. This brings its total cloud regions to 29, compared to 34 for Azure and 16 for AWS.
Looking into Oracle’s fourth quarter 2017, the company expects its SaaS and PaaS revenue, which includes its $9.3 billion acquisition of NetSuite completed in November 2016, to grow between 69 percent to 73 percent. And It expects its IaaS revenue to grow 25 percent to 29 percent.
Running the Numbers
For its third quarter 2017, Oracle reported total revenues of $9.2 billion, up 2 percent year-over-year. Its non-GAAP net income was $2.9 billion, or $0.69 per share, up 6 percent from the same period last year.
“Given inconsistent performance, we believe that Oracle’s quarter and guidance, while not spectacular, is enough to push the shares higher,” writes BMO Capital Markets Analyst Keith Bachman in a research note today.
The company’s stock is up over 7 percent at publication time.