EPS of $1.03 increased by 19.1% from previous year
Gross margin of 70.6%
Net income of 2.93B
""...we think our multi-cloud strategy will expand the ubiquity and popularity of our differentiated technologies, especially the Oracle Database."" - Safra Catz
Oracle Corporation has reported robust results for Q1 2025, showcasing a strong revenue growth of 8% year-over-year, reaching $13.3 billion. The quarter demonstrated continued momentum in cloud revenue, which surged 22% due to the combined growth of SaaS and IaaS services. Management highlights a strategic pivot towards multi-cloud offerings and significant investments in revenue-generating cloud infrastructure, stating they expect double-digit revenue growth for the full fiscal year. With RPO (Remaining Performance Obligations) at $99 billion, up 52% in constant currency, Oracle is positioning itself well to leverage ongoing demand in the cloud sector, reflecting strong operational execution and disciplined expense management.
Key Performance Indicators
Revenue
13.31B
QoQ: -6.86% | YoY:6.86%
Gross Profit
9.40B
70.65% margin
QoQ: -2.29% | YoY:6.31%
Operating Income
3.99B
QoQ: -18.20% | YoY:15.98%
Net Income
2.93B
QoQ: -6.84% | YoY:21.03%
EPS
1.06
QoQ: -7.02% | YoY:19.10%
Revenue Trend
Margin Analysis
Key Insights
Total Revenue: $13.3 billion (up 8% YoY, down 6.86% QoQ)
Cloud Revenue: $5.6 billion (up 22% YoY), with SaaS at $3.5 billion (up 10%) and IaaS at $2.2 billion (up 46%).
Revenue Performance:
- Total Revenue: $13.3 billion (up 8% YoY, down 6.86% QoQ)
- Cloud Revenue: $5.6 billion (up 22% YoY), with SaaS at $3.5 billion (up 10%) and IaaS at $2.2 billion (up 46%).
Profitability Metrics:
- Gross Profit: $9.4 billion; Gross Margin: 70.65%
- Operating Income: $3.99 billion; Operating Margin: 29.9%
- Net Income: $2.93 billion; Net Margin: 22.01%
- EPS: $1.03 (GAAP), $1.39 (non-GAAP, up 17% in USD)
Balance Sheet Health:
- Total Assets: $144.21 billion
- Total Liabilities: $132.95 billion
- Total Cash and Equivalents: $10.62 billion
- Net Debt: $73.9 billion
Management Commentary:
- Safra Catz, CEO: "...total cloud revenue was up 22%... with IaaS revenue soaring 46%. These results reflect our commitment to innovation and strong demand for our cloud infrastructure services."
- Larry Ellison, CTO: "...we believe our cloud partnerships with AWS, Microsoft, and Google will turbocharge the growth of our database business for years to come."
- Safra Catz on Accounting Changes: "This change in accounting estimate reduced Q1 operating expenses by about $197 million, enhancing our operational efficiencies."
"...we think our multi-cloud strategy will expand the ubiquity and popularity of our differentiated technologies, especially the Oracle Database."
â Safra Catz
"...as on-premise databases migrate to the cloud, we expect our database revenues will collectively become a significant growth driver alongside OCI and strategic SaaS."
â Larry Ellison
Forward Guidance
Management remains optimistic about Q2 2025, projecting revenue growth between 7%-9% in constant currency and 8%-10% in USD. Total cloud revenue growth is expected to accelerate further but faces seasonal challenges. Oracle aims for double-digit revenue growth across the fiscal year and anticipates higher contract values due to increasing RPOs, signaling continued expansion in strategic areas. IaaS and OCI are expected to drive profitability alongside enhanced service offerings.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
ORCL Focus
70.65%
30.00%
27.10%
33.30%
PANW
74.10%
13.40%
5.93%
83.95%
CRWD
75.60%
0.75%
1.69%
413.99%
MSFT
69.40%
46.60%
8.57%
32.42%
SQ
34.40%
7.52%
2.49%
26.60%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
The outlook for Oracle remains positive, driven by a strong emphasis on cloud solutions and strategic partnerships. Despite the pressures of high competition and ongoing fiscal management, the ability to leverage existing customer relationships while expanding the cloud footprint positions Oracle advantageously. Investors should monitor the execution of multi-cloud strategies, the performance of RPO as an indicator of future revenue, and continuous advancements in AI that can fuel further growth in applications and services.
Key Investment Factors
Growth Potential
Oracle's strategic partnerships with major cloud vendors, coupled with a rapidly expanding cloud infrastructure, provide substantial growth potential. The company has a robust RPO indicating long-term revenue visibility.
Profitability Risk
Risks associated with fluctuations in cloud demand and intensified competition in the cloud market, particularly from AWS, Microsoft, and Google. High debt levels and potential market downturns could also affect performance.
Financial Position
A strong cash position combined with significant free cash flow allows Oracle to invest heavily in growth initiatives, although a relatively high debt load necessitates ongoing revenue growth for financial sustainability.
SWOT Analysis
Strengths
Strong cloud revenue growth, particularly in IaaS and SaaS sectors.
Significant investments in infrastructure support growth.
Established partnerships with leading cloud providers (AWS, Microsoft, Google).
Weaknesses
High levels of total debt may affect financial flexibility and increase risk.
Dependency on continuous cloud demand to maintain revenue momentum.
Opportunities
Expansion of cloud offerings internationally as demand grows.
Increased adoption of multi-cloud strategies among enterprises boosts sales opportunities.
Further integration of advanced AI technologies into Oracle services.
Threats
Intense competition in the cloud market from established players like Amazon, Microsoft, and Google.
Market volatility impacting cloud spending by enterprises.