Oracle Corporation (NYSE: ORCL) stock lost over 6.6% in the pre-market session on December 15th, 2017. For the second quarter of 2018, the group’s Cloud SaaS revenue surged 47% yoy to $1.1 billion, while Fusion Cloud revenue enhanced 56% during the quarter. Cloud PaaS and IaaS revenue rose 20% yoy reaching $398 million. On the other hand, the group reported that the part of the Cloud PaaS and IaaS business is their legacy hosting services which might not have similar high growth characteristics like PaaS and next-gen IaaS services. The group’s PaaS/IaaS segment delivered a 46% rise in CD and 49% in USD, but the traditional hosting services, which we are de-focusing, fell over 10%.
Overall Oracle’s cloud and software revenues rose 7% yoy to $7.8 billion, while the total cloud revenues surged 39% yoy to $1.5 billion. Total on-premise software revenues rose 1% yoy to $6.3 billion, given the stable software license and the ongoing high attach of software support and renewal rates that reflect the stability of our installed base of customers.
SaaS bookings surged 42% in USD indicating a better growth rate while PaaS revenue was rose 47% and over $4.5 billion annualized run rate. ERP surged 66% on an organic basis while the overall ERP is currently at $1.4 billion annual run rate.
The group’s Fusion HCM surged 77%, which is more than the double the growth rate of Workday. CX reported a double-digit growth with CX currently at $1.1 billion annualized run rate. Data-as-a-Service, enhanced 47% while Business analytics surged 104%.
The group forecasts a better FY 2018 and aiming 80% SaaS gross margins. The gross margin of PaaS and IaaS was 40%, which is lower than the last quarter’s 44% as the geographic buildout goes forward in response to demand but ahead of the bulk of new revenue recognition. The group also expects an improving PaaS and IaaS gross margin. Hardware revenues lost 9% yoy to $940 million, while service revenues reached $856 million.
The shares of Oracle delivered over 30.5% in this year to date (as of December 14th, 2017; Source: Google finance).