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Oracle Reports Lower Than Expected Quarterly Revenue
ByAinvest
Tuesday, Sep 9, 2025 4:09 pm ET1min read
Oracle missed quarterly revenue estimates, with net sales declining 3% YoY to $11.83bn, driven by a 9% drop in cloud services and license support sales. The company's net income also fell 24% to $2.66bn. Despite this, Oracle's cloud services business grew 32% YoY.
Oracle Corporation (ORCL) reported its fiscal first-quarter earnings on September 9, 2025, with mixed results. The company's total revenue declined 3% year-over-year (YoY) to $11.83 billion, missing analysts' expectations of $12.2 billion [2]. Net sales dropped 3% YoY, driven by a 9% decline in cloud services and license support sales [2].Despite the overall revenue decline, Oracle's cloud services business demonstrated significant growth, increasing 32% YoY to $7.2 billion [2]. This growth was fueled by the company's substantial investments in artificial intelligence (AI) and infrastructure, with Oracle securing a significant number of Nvidia's GPUs and renting out that computing power through its OCI cloud business [1].
The company's net income fell 24% YoY to $2.66 billion, primarily due to increased expenses related to its AI initiatives and infrastructure projects [1]. Oracle's CEO, Safra Catz, highlighted the company's strong performance in securing large contracts and the growing demand for its cloud infrastructure services [2].
Investors will be closely watching for details on Oracle's $30 billion deal with OpenAI, as well as the progress of the Stargate AI project, which is expected to contribute significantly to the company's future growth [1]. The deal with OpenAI is anticipated to bring in over $30 billion in annual revenue starting in Oracle's 2028 fiscal year, sending the stock to a new record [1].
While the company's overall financial performance was mixed, the strong growth in cloud services and the potential for significant future revenue from the OpenAI deal and Stargate project indicate that Oracle remains a key player in the AI and cloud computing markets.
References:
[1] https://finance.yahoo.com/news/oracle-set-to-report-earnings-with-wall-street-expecting-30-ai-fueled-growth-in-cloud-business-154530473.html
[2] https://investor.oracle.com/investor-news/news-details/2025/Oracle-Announces-Fiscal-Year-2026-First-Quarter-Financial-Results/default.aspx
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