Oracle Corp (NYSE:ORCL, ETR:ORC) shares gained more than 10% in early trade Tuesday after the database software and cloud computing firm reported a bigger-than-expected profit for the fiscal third quarter.
For the quarter, Oracle reported a 16% year-over-year increase in adjusted earnings per share (EPS) to $1.41, ahead of estimates of $1.37.
Revenue was up 7% at $13.3 billion, in line with expectations.
Cloud services and license support revenues rose 12% to $10 billion while cloud license and on-premises license revenues decreased 3% to $1.3 billion.
Oracle CEO Safra Catz noted that large new cloud infrastructure contracts signed during the quarter drove its total Remaining Performance Obligations up 29% to $80 billion, a record for the company.
“We expect to continue receiving large contracts reserving cloud infrastructure capacity because the demand for our Gen2 AI infrastructure substantially exceeds supply—despite the fact we are opening new and expanding existing cloud datacenters very, very rapidly,” Catz said.
“We expect that 43% of our current $80 billion of Remaining Performance Obligations will be recognized as revenue over the next four quarters, and that our Gen2 Cloud Infrastructure business will remain in a hypergrowth phase—up 53% in Q3—for the foreseeable future."
For the fiscal fourth quarter, Oracle projected total revenue growth from 4% to 6%, below Street estimates of a 7.3% increase to $13.4 billion.
Adjusted EPS was guided to be down 2% to flat year-over-year at $1.62 to $1.66, with the consensus analyst estimate coming in at the midpoint at $1.64.
The company also declared a quarterly dividend of $0.40 per share payable to shareholders of record as of the close of business on April 10, 2024.
Shares of Oracle gained 10.2% at about $126 on Tuesday morning.
Updated with share price movement, fiscal fourth quarter guidance