Oracle's 10-Q report for the period ended August 31, 2024, provides a detailed insight into the company's financial condition and operations. The report outlines the breakdown of its businesses, revenue streams, and critical accounting estimates.
The cloud and license business represented 84% of Oracle's total revenues on a trailing 4-quarter basis. Within this segment, cloud services and license support revenues accounted for a significant portion. Cloud services revenues, earned through providing access to Oracle Cloud applications and infrastructure technologies, represented 42% and 37% of total revenues in the first three months of fiscal 2025 and 2024, respectively. Oracle noted an increase in customer demand for its cloud services, expecting this trend to continue.
The hardware business, contributing 6% of total revenues, offers a range of enterprise hardware products and related software. The company expects to continue investing in research and development for this segment. However, Oracle anticipates lower operating margins in this business compared to its cloud and license segment due to incremental costs.
The services business, representing 10% of total revenues, focuses on helping customers maximize their investments in Oracle applications and infrastructure technologies. This segment has lower margins compared to the cloud and license and hardware businesses.
Oracle's report also highlighted its acquisition strategy, having historically invested billions of dollars in acquiring complementary companies, products, services, and technologies. The company aims to fund future acquisitions through internally available cash, cash generated from operations, additional borrowings, or the issuance of additional securities.
Notably, Oracle has made investments in Ampere Computing Holdings LLC, a related party entity, in the form of equity and convertible debt instruments. The company expects Ampere to continue generating net losses in future periods but remains confident in its long-term potential.
The report also emphasizes the critical accounting estimates involved in preparing Oracle's financial statements, highlighting the significant level of estimation uncertainty that exists in certain areas.
Following these announcements, the company's shares moved -1.4%, and are now trading at a price of $139.89. If you want to know more, read the company's complete 10-Q report here.
