Company touts record order backlog of $130 billion.
Oracle shares fell in after-hours trading Monday, shaking off an initial gain as investors digested the software giant's disappointing quarterly revenue, much of it from a cloud-services miss, rather than focusing on the large number of big cloud-computing contracts in the future.
After initial after-hours gains of more than 5%, the stock was last down 3.6%.
In the fiscal third quarter, Oracle reported total revenue of $14.13 billion, up 6% year over year, down from analysts' consensus estimates of $14.38 billion. The company's cloud-services and support business came in at $11 billion, up 10% from a year ago, but analysts were expecting revenue of $11.2 billion, according to FactSet.
Chief Executive Safra Catz said that Oracle's exit from its advertising business last year lowered its total cloud revenue growth by 2% this quarter, and touted the company's bookings.
"Oracle signed sales contracts for more than $48 billion in Q3," Oracle Catz said in a statement. Oracle said that it signed cloud agreements with several big technology companies including OpenAI, xAI, Meta Platforms, Nvidia and Advanced Micro Devices.
She added that Oracle has a backlog of $130 billion in deals that will contribute to revenue growth of 15% in fiscal 2026. "We now have a clear light of sight to our future revenue growth," Catz told analysts on a conference call. Oracle refers to its backlog as remaining performance obligations, or RPOs.
Earlier this year, Oracle was part of the big "Project Stargate" deal with OpenAI, which plans to build a major data center in Texas. Oracle is one of those providers, but it has yet to specify its share of the contract, which was originally touted as a $500 billion infrastructure investment. Catz said that the Stargate deal is not included in the company's $130 billion backlog forecast. Catz described the available demand a few times on the call as "enormous."
"This was our strongest booking quarter ever by a huge margin," Catz told analysts. "And this does not include any contracts with Project Stargate."
When asked by one analyst why Oracle was chosen as the main data-center provider for Stargate, amid other, rival cloud companies, co-founder and Chief Technology Officer Larry Ellison said the company's technology offers a big cost advantage.
"Our technology that actually runs faster and more economically than our competitors," Ellison said. "So it really is a technology advantage we have over them. If you run faster and you [clients] pay by the hour, you cost less. So that technology advantage translates to an economic advantage, which allows us to win a lot of these huge deals."
Oracle's net income came in at $2.9 billion, up 22% from the year-ago net income of $2.4 billion, with GAAP earnings per share of $1.05, up from 87 cents a share a year ago. Analysts had been looking for earnings of $1.06 a share on a GAAP basis, according to FactSet.
After a major rally in its shares last year based on the company's momentum in artificial intelligence, Oracle shares are down about 10% year to date.
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