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Oracle Fiscal 2024 Q4 & Full-Year: Cloud and GenAI Uplift Results

Oracle Fiscal 2024 Q4 & Full-Year: Cloud and GenAI Uplift Results

The News: Oracle Corporation announced fiscal 2024 fourth quarter (Q4) and full-year 2024 results. Total quarterly revenues were up to 3% year-over-year in USD and up 4% in constant currency to $14.3 billion. Fiscal full-year 2024 total revenues were up 6% in USD and constant currency to $53.0 billion. Read the full press release from Oracle on the company’s website.

Oracle Fiscal 2024 Q4 & Full-Year: Cloud and GenAI Uplift Results

Analyst Take: Oracle Corporation reported robust financial results for its fiscal Q4 and full year 2024, showing strong growth in cloud services and AI advancements. CEO Safra Catz plus Chairman and CTO Larry Ellison discussed these results during its earnings call on June 11, 2024. Highlights included record-breaking sales contracts and substantial increases in cloud revenues, reinforcing Oracle’s competitive position in the market.

Oracle’s Q4 fiscal results continue Oracle’s strong sales momentum. Oracle CEO Safra Catz proclaimed that in Q3 and Q4 Oracle signed the largest sales contracts in the company’s history, driven by the massive demand for training AI large language models (LLMs) in Oracle Cloud. As a result, Oracle’s record level sales drove remaining performance obligation (RPO) up 44% to $98 billion.

Now throughout fiscal year 2025, Oracle expects continued strong AI demand to push Oracle sales and RPO even higher to result in double-digit growth this fiscal year. Also, she expects that each successive quarter should grow faster than the previous quarter, particularly as OCI capacity begins to catch up with demand. In Q4 alone, Oracle signed over 30 AI sales contracts totaling more than $12.5 billion including the OpenAI to train ChatGPT in the Oracle Cloud.

Oracle’s Q4 2024 performance highlights the company’s strategic pivot to a cloud-centric business model. Significant growth in cloud revenues, particularly from Oracle Cloud Infrastructure (OCI) and AI services, reflects the company’s focus and ability to secure large, multi-year contracts. This indicates strong market demand for Oracle’s cloud solutions, positioning the company favorably to advance multi-cloud capabilities throughout the ecosystem.

Oracle’s partnerships with major tech firms, including Microsoft and Google, further enhance its market positioning by offering comprehensive multi-cloud solutions. We see this strategy as broadening Oracle’s reach and meeting diverse customer needs, ensuring ecosystem-wide flexibility and interoperability.

The company reported Q4 total revenue of $14.3 billion, a 3% increase in USD and a 4% increase in constant currency year-over-year (Y/Y), driven by a 20% rise in cloud revenue to $5.3 billion. Cloud infrastructure (IaaS) revenue increased by 42% to $2.0 billion. For the full fiscal year, total revenue was $53.0 billion, up 6% in both USD and constant currency.

Oracle Fiscal 2024 Q4 & Full-Year: Cloud and GenAI Uplift Results
Image Source: App Economy Insights

Key FY 2024 Q4 cloud-related results included:

  • Q4 Cloud Revenue (IaaS plus SaaS) $5.3 billion, up 20% in USD and constant currency
  • Q4 Cloud Infrastructure (IaaS) Revenue $2.0 billion, up 42% in USD and constant currency
  • Q4 Cloud Application (SaaS) Revenue $3.3 billion, up 10% in USD and constant currency
  • Q4 Fusion Cloud ERP (SaaS) Revenue $0.8 billion, up 14% in USD and constant currency
  • Q4 NetSuite Cloud ERP (SaaS) Revenue $0.8 billion, up 19% in USD and constant currency

From our perspective, the 20% YoY cloud revenue growth (IaaS + SaaS) is a bit slower than it has been, although the 42% growth in cloud infrastructure (IaaS) part of the cloud business is vividly robust. Also, the newly announced partnership with OpenAI should be well received and produce a convincing win for Oracle as we witnessed how optimistic the investor community was after Apple announced its partnership with OpenAI. Overall Oracle delivered a solid quarter despite the earnings miss as shown by the market response to the OpenAI collaboration.

Additional key financial highlights consist of Oracle’s Q4 GAAP earnings per share at $1.11, and non-GAAP earnings per share at $1.63. The GAAP operating income for the quarter was $4.7 billion, with a non-GAAP operating income of $6.7 billion, reflecting an 8% increase. The operating margin improved, with a GAAP operating margin of 33% and a non-GAAP operating margin of 47%. GAAP earnings per share were $3.71 for the full fiscal year, and non-GAAP earnings per share were $5.56.

Fiscal Q4 cloud services and license support revenues were up 9% in USD and up 10% in constant currency to $10.2 billion. Cloud license and on-premise license revenues were down 15% in USD and down 14% in constant currency to $1.8 billion. Fiscal full-year cloud services and license support revenues were up 12% in USD and up 11% in constant currency to $39.4 billion. Cloud license and on-premise license revenues were down 12% in USD and constant currency to $5.1 billion.

Oracle Propels the Multi-cloud Cause to Meet Fast Expanding Customer Demand

Larry Ellison spotlighted that Oracle’s multi-cloud cooperation with Microsoft expanded significantly in Q4, as the company agreed to work together to support Open AI and ChatGPT. Notably, 11 of the 23 OCI data centers Oracle is building inside Azure went live. As Azure/OCI cloud capacity becomes available to the large installed base of Microsoft and Oracle customers, Oracle expects a substantial boost in its cloud database growth. Now customers can run any and every version of the Oracle database—Autonomous, 23ai Vector DB, etc.—in both the Azure and the Oracle clouds.

In addition to Microsoft, Oracle debuted and fired up its multi-cloud partnership with Google Cloud on the same day announcing its fiscal Q4 and full-year results. The integration of Oracle database services with Google Cloud, set to go live in September 2024, exemplifies Oracle’s commitment to offering flexible, interoperable cloud solutions. These partnerships enhance Oracle’s capabilities, making it easier for customers to adopt multi-cloud strategies that provide redundancy and flexibility, which is crucial for Oracle’s future growth.

Google Cloud’s Cross-Connect Interconnect will be initially available for customer onboarding in 11 global regions, allowing customers to deploy general purpose workloads with no cross-cloud data transfer charges. Later this year, a new offering, Oracle Database@Google Cloud, will be available with the highest level of Oracle database and network performance, along with feature and pricing parity with OCI.

Oracle’s investment in some of the world’s largest data centers, including a 200-megawatt facility, supports its growing cloud and AI business. These modern data centers are designed to handle massive workloads and offer unparalleled performance, positioning Oracle to meet increasing customer demands. This infrastructure investment is vital for Oracle to support large-scale AI training and other compute-intensive tasks, ensuring future scalability and performance.

Oracle Gains Substantial Leap in GenAI Ecosystem Credentials

In parallel with announcing its fiscal 2024 Q4 and full-year results, Oracle unveiled its new collaboration OpenAI and Microsoft Azure. OpenAI’s selection of OCI to extend the Microsoft Azure AI platform to OCI assuredly enlarges OpenAI’s overall cloud capacity. OpenAI is the AI research and development company behind ChatGPT, which provides GenAI to more than 100 million users every month. OpenAI’s high-profile endorsement aligns with the burgeoning AI ecosystem demand for greater sized LLMs, directly invigorating demand for Oracle Gen2 AI infrastructure and its price performance advantages.

As such, OpenAI will join thousands of players across industries globally that run their AI workloads on OCI AI infrastructure. Adept, Modal, MosaicML, NVIDIA, Reka, Suno, Together AI, Twelve Labs, xAI, and others use OCI Supercluster to train and inference next-generation AI models.

Oracle Gen2 AI infrastructure includes GenAI, computer vision, and predictive analytics throughout its distributed cloud. Gen2 Oracle Cloud Infrastructure (OCI) uses ultra-swift remote data memory access (RDMA) networking and connects NVIDIA GPUs in huge superclusters that can efficiently train large language models (LLMs). As such, OCI Supercluster can scale up to 64K NVIDIA Blackwell GPUs or GB200 Grace Blackwell Superchips connected by ultra-low-latency RDMA cluster networking and a choice of HPC storage.

We believe the collaboration with OpenAI to extend the Microsoft Azure AI platform to OCI validates that Oracle Gen2 AI infrastructure, underscored by RDMA-infused innovation, can support and scale the most demanding GenAI/LLM workloads with immediacy. OCI’s multi-cloud advances underline how combining cloud services from multiple clouds can enable customers to optimize cost, performance, and functionality in modernizing their databases and applications.

Oracle Database 23ai: Bringing the Power of AI Vector Search to Enterprises

We find that Oracle is not resting on its laurels when it comes to cloud database innovation. Oracle Database 23ai now employs AI Vector Search capabilities designed to enable customers to securely combine search for documents, images, and other unstructured data with search on private business data, without moving or duplicating it. This long-term support release includes Oracle AI Vector Search and more than 300 additional major features focused on simplifying the use of AI with data, accelerating app development and running mission-critical workloads.

Oracle Database 23ai seeks to bring AI algorithms to where the data lives, instead of having to move the data to where the AI algorithm lives. This approach can allow AI to run in real-time in Oracle databases, and potentially improve the effectiveness, efficiency, and security of AI.

Key new capabilities include Oracle AI Vector Search, Oracle Exadata System Software 24ai, and OCI GoldenGate 23ai. Specifically, Oracle AI Vector Search prioritizes easing customer searches of relational data, images, and documents based on their conceptual content rather than specific words, pixels, or data values. As such, AI Vector Search makes it possible for LLMs to query private business data using a natural language interface and helps LLMs provide more accurate and relevant results.

From our view, AI Vector Search enables developers to add semantic search capabilities to new applications and existing applications. As a result, all the mission-critical features now transparently work with AI vectors, enabling Oracle customers to run AI Vector Search for even their most mission-critical applications. Through storing and processing business and vector data in the same database, customers can integrate AI Vector Search into existing business applications to implement new and innovative AI use cases without compromising data security.

Enterprise Application Portfolio Innovations Percolate

Oracle’s new AI capabilities in Oracle Fusion Cloud CX, demonstrate that GenAI has become table stakes for SaaS vendors, and Oracle has stepped up to embed these capabilities within its suite of applications. As part of Oracle Fusion Applications, Oracle Cloud CX is designed to connect data and workflows across all departments that interact with customers, including sales, marketing, and service.

Moreover, Oracle and Palantir are joining forces to provide mission-critical AI solutions to governments and businesses. Oracle’s distributed cloud and AI infrastructure, combined with Palantir’s AI and decision acceleration platforms, is targeted at helping organizations maximize the value of their data, which can contribute to increasing efficiency, addressing sovereignty requirements, and helping them outpace adversaries.

At the Oracle Industry Analyst Summit in April 2024, Larry Ellison shared that Oracle would be moving its world headquarters to Nashville, largely to tap into the number of healthcare-related organizations in the region. While we suspect that there are other factors at play (e.g., tax incentives), Oracle’s push into the healthcare segment makes a lot of sense from a strategic perspective.

Oracle made several announcements around Oracle Fusion Cloud and healthcare, which appear designed to help healthcare organizations operate more efficiently through automation, AI, and better organization of data. The goal of these enhancements appears to be removing the friction that is often inherent in cross-organizational purchasing processes, providing more visibility and control across operational and functional areas, and creating a more efficient way to identify and upskill workers within the healthcare industry.

We find that Oracle has proven opportunistic in its approach to targeting industries, and its acquisition of Cerner certainly positioned the company properly to further penetrate the healthcare market segment, while providing additional domain expertise. The company has significant experience handling and managing sensitive data, as well as navigating the complex regulatory environment that requires a deft technology approach to personally identifiable information (PII) and other sensitive data. Furthermore, we see the company has a distinct advantage due to its legacy status as a reliable, enterprise-grade technology platform and infrastructure provider, which is often a key criterion for mission-critical healthcare applications.

Oracle Fiscal 2024 Q4 & Full-Year Results: Looking Forward

Oracle’s outlook for fiscal year 2025 is optimistic, driven by continued strong demand for cloud services and AI infrastructure. The company expects double-digit revenue growth, supported by increasing bookings and an expanding pipeline. Each successive quarter is projected to grow faster as Oracle expands its cloud capacity to meet rising demand.

The strategic focus on AI and cloud services is expected to accelerate growth. Oracle plans to double its capital expenditure in fiscal year 2025 compared to fiscal year 2024 to build additional cloud capacity and address the significant backlog of orders. This investment aims to maintain Oracle’s competitive edge and meet growing customer needs.

Oracle’s multi-cloud strategy, strengthened by partnerships with Microsoft and Google, is expected to enhance its market position and attract a broader customer base. The integration of Oracle database services with Google Cloud and the expansion of Oracle’s presence in Microsoft’s Azure ecosystem are key steps in providing flexible and interoperable cloud solutions.

The rapid adoption of OCI for AI workloads, as evidenced by the substantial AI contracts signed in Q4, positions Oracle as a leader in the AI infrastructure market. The ability to offer high-performance, cost-effective AI solutions is expected to drive significant revenue growth and secure its leadership in this rapidly evolving sector.

Key Takeaways: Oracle Fiscal 2024 Q4 and Fiscal Full Year Results Ride LLM/GenAI Training Wave

Oracle’s Q4 2024 advancements highlight significant growth in cloud revenue, increased AI-related contracts, expanded multi-cloud partnerships, and investments in advanced data centers. These developments are essential for Oracle’s future growth, enhancing its market position and addressing growing demands in cloud and AI services.

Overall, we find that Oracle’s FY 2024 Q4 and full-year results are producing competitive groundswells across the global cloud market because the results validate that the company is a vital player in powering innovation and accelerating adoption across the cloud and AI ecosystems as advances in GenAI and multi-cloud move at unparalleled speeds. In meeting the swiftly evolving demands of IaaS/SaaS customers and playing an integral role in GenAI innovation, Oracle is executing on building out the cloud ecosystem that fulfills the next generation of AI training development and inference demand.

Daniel Newman and his co-host of The Six Five Webcast, Patrick Moorhead of Moor Insights and Strategy discusses Oracle’s earnings in their latest episode. Check it out here and be sure to subscribe to The Six Five Webcast so you never miss an episode.

Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.

Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.

Other Insights from The Futurum Group:

Oracle Database 23ai: Taking Enterprise AI to the Next Level

Oracle Palantir Partnership Transforms AI Decision Making

Oracle Fiscal 2024 Q3: Results Fueled by Cloud and Generative AI Surge

Author Information

Ron is an experienced, customer-focused research expert and analyst, with over 20 years of experience in the digital and IT transformation markets, working with businesses to drive consistent revenue and sales growth.

He is a recognized authority at tracking the evolution of and identifying the key disruptive trends within the service enablement ecosystem, including a wide range of topics across software and services, infrastructure, 5G communications, Internet of Things (IoT), Artificial Intelligence (AI), analytics, security, cloud computing, revenue management, and regulatory issues.

Prior to his work with The Futurum Group, Ron worked with GlobalData Technology creating syndicated and custom research across a wide variety of technical fields. His work with Current Analysis focused on the broadband and service provider infrastructure markets.

Ron holds a Master of Arts in Public Policy from University of Nevada — Las Vegas and a Bachelor of Arts in political science/government from William and Mary.

Regarded as a luminary at the intersection of technology and business transformation, Steven Dickens is the Vice President and Practice Leader for Hybrid Cloud, Infrastructure, and Operations at The Futurum Group. With a distinguished track record as a Forbes contributor and a ranking among the Top 10 Analysts by ARInsights, Steven's unique vantage point enables him to chart the nexus between emergent technologies and disruptive innovation, offering unparalleled insights for global enterprises.

Steven's expertise spans a broad spectrum of technologies that drive modern enterprises. Notable among these are open source, hybrid cloud, mission-critical infrastructure, cryptocurrencies, blockchain, and FinTech innovation. His work is foundational in aligning the strategic imperatives of C-suite executives with the practical needs of end users and technology practitioners, serving as a catalyst for optimizing the return on technology investments.

Over the years, Steven has been an integral part of industry behemoths including Broadcom, Hewlett Packard Enterprise (HPE), and IBM. His exceptional ability to pioneer multi-hundred-million-dollar products and to lead global sales teams with revenues in the same echelon has consistently demonstrated his capability for high-impact leadership.

Steven serves as a thought leader in various technology consortiums. He was a founding board member and former Chairperson of the Open Mainframe Project, under the aegis of the Linux Foundation. His role as a Board Advisor continues to shape the advocacy for open source implementations of mainframe technologies.

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