In the third quarter of fiscal 2022, Oracle‘s revenues increased 4% year-on-year (+ 7% at currency cost) to $ 10.5 billion. The driving force is the infrastructural (IaaS) and application (SaaS) cloud activities . In fact, revenues from cloud services and license support grew by 5% (+ 8% in constant currency) to 7.6 billion dollars, while those from cloud and on-premise licenses increased by 1% (+4 % in constant currency) to 1.3 billion dollars.
Third quarter GAAP operating profit was $ 3.8 billion, down 1% but up 3% at constant currency; non-GAAP was $ 4.8 billion, up 1% and 4% at constant currency. The GAAP operating margin was 36% and the non-GAAP operating margin was 46%. GAAP net income was $ 2.3 billion and non-GAAP net income was $ 3.1 billion.
The group founded by Larry Ellison thus recorded a GAAP earnings per share of $ 0.84, while non-GAAP earnings per share were $ 1.13, down 3% but up 1% in constant currency. “Earnings per share for the third quarter,” the group explains in a statement, “fell by $ 0.05 primarily due to a drop in the share price of genetic sequencing company Oxford Nanopore and an operating loss of Ampere, the manufacturer of Arm server chips. However, Oracle remains confident that the investments made in these two cutting-edge technology companies will have a very strong return ”.
Short-term deferred revenue was $ 7.9 billion. Operating cash flow was $ 10.4 billion for the past 12 months.
Top management analysis
“In fiscal third quarter, Oracle achieved 7% constant currency revenue growth, our highest organic quarterly growth rate, since we began our cloud transition,”said Oracle CEO Safra Catz. “This strong revenue increase is also matched by solid non-GAAP operating profit growth of 4% at constant currency, but the main point to note is that our overall revenue growth is driven by our infrastructure cloud businesses ( IaaS) and application (SaaS). Q3 IaaS revenue increased by 47% in constant currency, while growth in SaaS was driven by our Fusion Cloud Erp , which increased by 35% in constant currency, and by NetSuite Erp, increased by +29% in constant currency. Our total cloud infrastructure and applications business is now over $ 11 billion a year. “
In commenting on the business trend in Italy, Alessandro Ippolito, Vp and Country Manager of Oracle Italy, added: “The third fiscal quarter in Italy was very important, both for the results achieved – particularly excellent for some of our lines of business, for example those related to cloud solutions (SaaS) to manage business processes – and above all for the opening of our Cloud Region in Milan, which allows us to be even closer to Italian customers – private companies and public administrations – who care about the sovereignty and security of cloud data. Additionally, we note with great satisfaction that many of our strategic customers are renewing their trust in us year after year in their needs for technologies to support data management. I can only be proud of the professionalism and spirit of dedication of our team which, even in a difficult period, has achieved a success that will certainly contribute to the virtuous path towards the digitization of the country”.
Negotiation with TikTok to host US user data
Meanwhile, Oracle is in talks with TikTok to offer a US user information storage service that inhibits access to data from the Chinese parent company ByteDance. TikTok thus hopes to overcome US regulatory challenges on data integrity. The indiscretion comes from people familiar with the matter cited by Reuters.
The deal would come a year and a half after the Trump administration ordered ByteDance to sell TikTok to a US company, an order that was never enforced after Joe Biden took office. The panel, known as the Committee on Foreign Investment in the United States (CFIUS), however, continued to have concerns about the matter.
Oracle on the other hand had discussed acquiring a minority stake in TikTok in 2020, when ByteDance was under pressure from the United States to sell the app. Now, according to sources, the cloud computing giant will store all the data of US users of TikTok (partially stored in the Google Cloud infrastructures ) on its servers.
Under the agreement, a dedicated data management team should be established in the United States consisting of hundreds of people who will act as gatekeepers for US user information: the team will consist of engineers and cybersecurity personnel. Specifically, the companies are speculating a structure whereby the division would operate autonomously and would not be under the control or supervision of TikTok, which is also exploring collaborations with other technology companies on firewalls and cybersecurity measures.