Business Insider
- Oracle CEO Safra Catz said it is still unclear how the coronavirus crisis could impact the tech giant's business. "We're largely conducting business as usual," she told analysts on the company's earnings call.
- Oracle shares rallied late Thursday on better-than-expected results.
- Valoir analyst Rebecca Wetterman told Business Insider: "I'd expect we'll see the real hit come a few quarters from now, when companies that would have been on the verge of buying in the next few months slow their buying decisions."
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Oracle CEO Safra Catz said Thursday it was too early to say if the coronavirus crisis will have a significant impact on the tech giant.
"We're largely conducting business as usual, with some modifications, such as using video conferencing, and asking our employees to postpone nonessential travel," she told analysts on the company's quarterly earnings call.
"We're seeing other companies take precautionary actions," Catz said. "It's not yet clear what the effect of the virus will have on our customers and suppliers."
Oracle posted better-than-expected financials which sent the company's stock rallied in late trades, although it shed 11% in the regular session as the broader market retreated.
Oracle has been pivoting to a more cloud-focused business model based with revenue driven mainly by subscriptions, instead of licenses. The company is struggling to establish a stronger presence in the cloud, where it is competing with stronger rivals like Amazon, Microsoft and Google.
How the pandemic and the looming economic downturn will impact Oracle's transformation was clearly top of mind for some Wall Street analysts.
"You guys have been in uncertain times before," one analyst said. Referring to the two last major economic slumps, he continued: "Can you maybe contrast a little bit Oracle today with its recurring revenue stream versus where we were at 2008, where this is where we were in 2001."
Oracle founder Larry Ellison said the tech giant is a stronger position this time around.
"Our business is much less not a one time license business," he said. "More and more of it is subscription based and recurring. Our business has changed radically from the time of the internet, the internet bubble up from 2001 to 2008. It's a very different situation."
Valoir analyst Rebecca Wetterman said the company reported "a really strong quarter driven by its cloud business."
"There's a lot of uncertainty out there, certainly, but their cloud revenues are somewhat insulated from that in the short term because they're already committed," she told Business Insider. "I'd expect we'll see the real hit come a few quarters from now, when companies that would have been on the verge of buying in the next few months slow their buying decisions."
Oracle reported a quarterly profit of $2.57 billion, or 79 cents a share, compared with a profit of $2.75 billion, or 76 cents a share. Revenue slipped 2% to $9.78 billion. Adjusted profit was 97 cents a share.
Analysts were expecting Oracle to post a profit of 96 cents a share on revenue of $9.75 billion.
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