Oracle rose nearly 9% after hours! Q1 earnings exceed expectations, cloud infrastructure revenue up 45% year-on-year

According to the financial news app Zhitong Finance, Oracle (ORCL.US) announced its first-quarter performance for the fiscal year 2025, showing that its quarterly profit and bookings exceeded market expectations, indicating that the demand for artificial intelligence continues to drive its cloud computing business. Boosted by this news, Oracle's stock rose nearly 9% in after-hours trading on Monday. The financial report shows that Oracle's Q1 revenue increased by 7% year-on-year to $13.3 billion, in line with analysts' average expectations. Under Non-GAAP accounting standards, operating profit increased by 14% year-on-year to $5.7 billion, better than analysts' average expectation of $5.59 billion; earnings per share were $1.39, surpassing analysts' average expectation of $1.33. Cloud revenue (IaaS+SaaS) grew by 21% year-on-year to $5.6 billion in Q1, in line with analysts' expectations; among them, cloud infrastructure revenue increased by 45% year-on-year to $2.2 billion, exceeding analysts' average expectation of $2.18 billion. Remaining performance obligations (RPO) increased by 53% year-on-year to $99 billion, setting a new record for the company. Capital expenditures were $2.3 billion, lower than analysts' average expectation of $3.04 billion. Oracle, known for its database software, is currently focusing on expanding its cloud infrastructure business that leases computing power and storage to compete with companies like Amazon (AMZN.US), Microsoft (MSFT.US), and Alphabet (GOOGL.US). Oracle's cloud services have been successful in generating AI workloads, earning a reputation, with customers including Reka and xAI, an AI startup under Musk. Oracle CEO Safra Catz stated, "As cloud services become Oracle's largest business, our revenue and earnings per share are accelerating." Safra Catz mentioned that the growth in RPO was due to several large transactions in the first quarter. Wolfe Research analyst Alex Zukin commented that investors may see this performance as a signal of Oracle's more sustainable growth. Oracle stated that the demand for cloud infrastructure continues to outpace supply, and they are rapidly building new data centers to meet the server demand powering artificial intelligence. Oracle's Chairman and CTO Larry Ellison said, "Oracle has 162 cloud data centers operating and under construction worldwide. The largest of these data centers is 800 megawatts and will contain several acres of NVIDIA GPU clusters for training large-scale AI models." Looking ahead, Oracle expects Non-GAAP earnings per share for the second quarter to be $1.45-1.49, with revenue expected to increase by 8%-10% year-on-year, and cloud revenue to grow by 24%-25%. The company also forecasts double-digit percentage revenue growth for the fiscal year 2025, with analysts' average expectation at 9.4%; and expects capital expenditures for fiscal year 2025 to be approximately double that of fiscal year 2024. Furthermore, it is worth mentioning that Oracle has signed a multi-cloud agreement with Amazon AWS, where Oracle's latest Exadata hardware and database software version 23ai will be embedded in AWS cloud data centers. When launched in December this year, AWS customers will have easy access to Oracle databases