Nebulous cloud growth at Oracle Corp. may not come as a shock this quarter, with investors and analysts anticipating that the enterprise software giant won’t break out cloud numbers, following the surprise omission of that metric three months ago.
Oracle ORCL, +0.59% is scheduled to report its fiscal first-quarter earnings after the market close on Monday.
Investors were taken aback in the most recent earnings report when the company failed to publish results in its cloud business. That unexpected change followed the company’s previous earnings report when the cloud-growth forecast fell below Wall Street estimates, confirming fears that the business wasn’t growing as quickly as hoped.
Still, that hasn’t prevented analysts from producing projections. Analysts surveyed by FactSet estimate total cloud services and license support revenue of $6.68 billion, with SaaS, or software as a service, revenue accounting for $1.31 billion of that figure. Analysts expect $5.95 billion to be categorized as on-premise software revenue, and $905.8 million as new software license revenue.
“While some of the deceleration in legacy SaaS businesses has been a bit disappointing in recent quarters, we see more stabilization from current levels and we remain confident on Cloud [enterprise resource planning and human capital management] momentum,” said Cowen analyst J. Derrick Wood, in a note. He has an outperform rating on Oracle’s shares.
“We heard of a large Cloud HCM transaction in 1Q and our checks suggest that ORCL is seeing an up-tick in cloud migrations from the install base. This gives us confidence in our organic SaaS growth forecast of ~20% cc for the quarter (23% cc on a reported basis including acquisitions), though we note that ORCL no longer discloses these numbers,” Wood said.
Oracle’s cloud business also took a decidedly curious turn in September when Thomas Kurian, who led Oracle’s cloud business,