The Oracle: A Look Ahead at Fiscal Q3 2024 Earnings Report
Key Takeaways
- Oracle is set to report earnings for its fiscal third quarter of 2024 on Monday after the closing bell.
- Analysts expect Oracle’s revenue and earnings to rise from the prior quarter and year-ago period.
- The company will report revenue for its cloud segment amid concerns that growth may be slowing.
- Oracle could also offer details about its data center expansion project and how it is affecting margins amid growing demand for artificial intelligence.
Oracle (ORCL) is set to announce its third-quarter earnings for the 2024 fiscal year after the closing bell on Monday, March 11, which will show how the company’s cloud revenue is faring and could offer insight into its data center expansion to meet demand amid the artificial intelligence (AI) boom.
Analysts project Oracle’s revenue to come in at $13.28 billion for the third quarter of fiscal 2024, up from the previous quarter and year-ago period, according to estimates compiled by Visible Alpha.
Net income is expected to be $2.74 billion, an increase from $1.9 billion in the fiscal third quarter of 2023, while diluted earnings per share (EPS) are projected at $1.37, compared to $1.22 in the same period a year earlier.
| Analyst Estimates for Q3 FY 2024 | Q2 FY 2024 | Q3 FY 2023 | |
| Revenue | $13.28 billion | $12.94 billion | $12.4 billion |
| Diluted EPS | $1.37 | $1.34 | $1.22 |
| Net Income | $2.74 billion | $2.5 billion | $1.9 billion |
Key Metric: Cloud Growth
When Oracle reported results for the previous quarter in December, shares fell after the company missed cloud growth expectations.
Cloud revenue came in at $4.8 billion for the second quarter of fiscal 2024, representing an increase of 25% from the same period a year earlier, but a slowdown from 30% year-over-year growth in the fiscal first quarter.
Analysts project revenue for Oracle’s cloud segment at $5.06 billion, which would be a 23% jump from the same period the previous year, according to consensus estimates compiled by Visible Alpha.
Deutsche Bank analysts acknowledged “risk to FY24 Cloud guidance,” but indicated that an opportunity for a “third leg” of growth could be “more meaningfully unlocked in FY25 as the roll out of Oracle Database@Azure.” Oracle Database@Azure is a product from Oracle’s partnership with Microsoft (MSFT).
Business Spotlight: Expanding Cloud Data Centers Amid AI-Driven Demand
Oracle previously announced that the company is expanding 66 of its existing cloud data centers and building 100 cloud data centers, which drew attention to operating margins due to increased capital expenditures.
CEO Safra Catz said that “demand for [Oracle’s] Cloud Infrastructure and Generative AI services is increasing at an astronomical rate,” adding that “business is good and getting better.”
Company executives indicated that Oracle can build new data centers “very rapidly and operate them inexpensively” compared to competitors.
Third-quarter earnings could provide investors with more color about how the data center expansion to meet AI demand will impact margins.
Oracle shares have gained about 8% since the start of 2024 and nearly 30% over the past year.
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