Business software maker Oracle Corp reported a higher-than-expected quarterly revenue as sales in its cloud business surged due to more customers.
Shares of the Redwood City, California-based company rose as much as 3.8 percent to $40.10 in extended trading on Thursday.
Like its rivals such as SAP SE, IBM Corp and Microsoft Corp, Oracle has focused on moving its business towards the cloud-computing model, essentially providing services remotely via data centers rather than selling installed software.
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Total revenue from the company’s cloud-computing software and platform service rose 49.1 percent to $859 million in the fourth quarter ended May 31. It contributed 8 percent of Oracle’s total revenue during the quarter.
Oracle expects the business to grow more than 65 percent in fiscal 2017, higher than the 52 percent growth it saw in 2016, co-Chief Executive Safra Catz said on a conference call.
The company also expects first quarter adjusted profit of 56-60 cents per share and revenue to grow between 2-5 percent in constant currency, Catz said.
The company added more than 1,600 new cloud software as a service (SaaS) customers and more than 2,000 new platform as a service (PaaS) customers in Q4, Oracle Chief Executive Mark Hurd said.
Oracle executives were bullish about its cloud prospects, and Safra Catz said the company was a “force to be reckoned with in the cloud”.
Oracle Chairman Larry Ellison also said he expects the “hyper-growth” experienced by the company’s cloud business in 2016 will continue for the next few years.
The 39-year old company, a late entrant into the cloud market, recently acquired cloud companies Textura and Opower.
However, Oracle has come under considerable pressure from nimbler companies in the industry such as Salesforce.com Inc , whose chief executive Marc Benioff has constantly taken potshots at the company.
The company’s total revenue fell 1 percent to $10.59 billion, beating analysts’ average estimate of $10.47 billion, according to Thomson Reuters I/B/E/S.
Oracle’s net income rose to $2.81 billion, or 66 cents per share, in the quarter ended May 31, from $2.76 billion, or 62 cents per share, a year earlier.
Excluding items, it earned 81 cents per share, meeting average analysts’ estimate.
Up to Thursday’s close, Oracle’s stock had risen 5.8 percent this year.