SAN FRANCISCO— The latest quarterly results from Oracle show how the shift to cloud computing is putting a major dent in the software giant’s sales growth and profitability.
Like the results from its previous quarter, the numbers strongly suggest Oracle (ORCL) is going to need a major cloud-related acquisition in 2016 to prevent the trend from further damaging its finances.
Hurt by falling overall revenue, the company’s operating income dropped 17% for its fiscal second quarter ended Nov. 30, compared with the same period a year ago.
Oracle’s bottom line, meanwhile, also suffered a double-digit drop, as net income fell 12% year-over-year, to $2.2 billion.
For its fiscal first quarter ended Aug. 31, Oracle had reported a 10% drop in operating income and a 20% plunge in net income.
Just as troubling for the company’s shareholders is Oracle’s shrinking top line.
Overall revenue in the November quarter fell 6% vs. a year earlier, following a 2% year-over-year slip in the prior quarter.
The company’s revenue from new software licenses has fared even worse, dropping 18% and 16%, respectively, during the last two periods, on a year-over-year basis.
Those numbers are especially troubling, because fewer new customers this fiscal year will translate into less revenue from software updates and support in the future.
And that recurring revenue stream has been among the company’s most lucrative businesses for decades.
Read More: http://www.usatoday.com/story/tech/columnist/shinal/2015/12/17/oracle-needs-another-way-into-cloud-market/77490254/
Like the results from its previous quarter, the numbers strongly suggest Oracle (ORCL) is going to need a major cloud-related acquisition in 2016 to prevent the trend from further damaging its finances.
Hurt by falling overall revenue, the company’s operating income dropped 17% for its fiscal second quarter ended Nov. 30, compared with the same period a year ago.
Oracle’s bottom line, meanwhile, also suffered a double-digit drop, as net income fell 12% year-over-year, to $2.2 billion.
For its fiscal first quarter ended Aug. 31, Oracle had reported a 10% drop in operating income and a 20% plunge in net income.
Just as troubling for the company’s shareholders is Oracle’s shrinking top line.
Overall revenue in the November quarter fell 6% vs. a year earlier, following a 2% year-over-year slip in the prior quarter.
The company’s revenue from new software licenses has fared even worse, dropping 18% and 16%, respectively, during the last two periods, on a year-over-year basis.
Those numbers are especially troubling, because fewer new customers this fiscal year will translate into less revenue from software updates and support in the future.
And that recurring revenue stream has been among the company’s most lucrative businesses for decades.
Read More: http://www.usatoday.com/story/tech/columnist/shinal/2015/12/17/oracle-needs-another-way-into-cloud-market/77490254/
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