Oracle reports better-than-expected $10.59 billion quarterly revenue as cloud business surges

(Reuters) – Business software maker Oracle reported a higher-than-expected revenue in the fourth quarter, boosted by a surge in sales from its cloud business.

Shares of the company were up 1.7 percent at $39.29 in extended trading on Thursday.

Like its rivals such as SAP SE, IBM and Microsoft, Oracle has focused on moving its business toward the cloud-computing model, essentially providing services remotely via data centers rather than selling installed software.

Total revenue from company’s cloud-computing software and platform service rose 49.1 percent to $859 million in the fourth quarter ended May 31.

The company added more than 1,600 new cloud software as a service (SaaS) customers and more than 2,000 new platform as a service (PaaS) customers in Q4, Oracle Chief Executive Mark Hurd said.

Oracle Chairman Larry Ellison said he expects the “hyper-growth” experienced by the company’s cloud business in 2016 will continue for the next few years.

The 39-year old company, a late entrant into the cloud market, recently acquired cloud companies Textura and Opower.

However, Oracle has come under considerable pressure from nimbler companies in the industry such as Salesforce.com Inc, whose chief executive Marc Benioff has constantly taken potshots at the company.

The company’s total revenue fell 1 percent to $10.59 billion, beating analysts’ average estimate of $10.47 billion, according to Thomson Reuters I/B/E/S.

Oracle’s net income rose to $2.81 billion, or 66 cents per share, in the quarter ended May 31, from $2.76 billion, or 62 cents per share, a year earlier.

Excluding items, it earned 81 cents per share, meeting average analysts’ estimate.

Up to Thursday’s close, Oracle’s stock had risen 5.8 percent this year.

(Reporting by Narottam Medhora in Bengaluru; Editing by Shounak Dasgupta)