Oracle (ORCL) Earnings: Slowing Growth but Expectations Remain High

Oracle Corp

Petar PetrovMar 14, 2025 8:49 AM

TradingKey - Oracle (ORCL) reported revenue and earnings that fell short of the market expectations:

Earnings per share: $1.47 adjusted vs. $1.49 expected (+4% year-over-year)
Revenue: $14.13 billion vs. $14.39 billion expected (+6% year-over-year)

Management expects the weak revenue growth to continue in the current quarter as well. Despite the weak results, there is some positive news.

The cloud revenue continues to grow at a rate of above 20%, in line with the other major cloud players. This growth is driven by attracting significant clients such as Meta and Nvidia.

Oracle also plans to spend around $16 billion in capital expenditures this year, a little more than double the total from last year, to enhance its competitiveness against the other major cloud providers.

Oracle has provided a stronger-than-expected sales forecast for its upcoming fiscal year, citing strong AI demand and projecting a 15% increase in overall revenue for fiscal 2026, starting in June.

Despite the optimism from the management side, investors should remain cautious about Oracle’s investment outlook. The stock is still trading at a relatively high valuation of 36x PE. It is not very certain how they can quickly improve their revenue growth from 6% to 15%. Additionally, the debt level remains high with debt-to-asset ratio of 60%.

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