Oracle has reported its Q1 2023 earnings, narrowly missing revenue expectations and projecting lower growth for Q2 due to a tough economy affecting cloud spending by businesses.
The company’s Q1 revenue was $12.45 billion, slightly below Wall Street estimates of $12.47 billion.For Q2, Oracle forecasts revenue growth of 5% to 7%, falling short of analysts’ average estimate of 8.2%. Oracle expects adjusted profit per share for Q2 to be between $1.30 and $1.34, compared to analysts’ expectations of $1.33 per share.
Despite these results, Oracle Chairman and CTO Larry Ellison highlighted the company’s success in securing contracts for its Gen2 Cloud, including more than $4 billion from AI development companies, positioning Oracle to compete in AI workloads.
Ellison also announced a contract with Tesla CEO Elon Musk’s AI startup xAI to train AI models in Oracle’s Gen2 Cloud and revealed that all nine utility companies owned by Berkshire Hathaway will replace their enterprise resource planning systems with Oracle’s Fusion Cloud applications.
Oracle’s shares have risen about 55% year-to-date.
The company is focused on expanding its cloud business and competing with larger rivals like Amazon Web Services and Microsoft as businesses reassess their digitization plans.
These results indicate the challenges Oracle faces in catching up in the cloud segment and the potential role of AI adoption in boosting its cloud infrastructure business.