Oracle on Thursday reported earnings for the first quarter of fiscal 2017, missing market expectations.
The software giant posted non-GAAP earnings of 55 cents a share on revenue of $8.6 billion. Wall Street was looking for 58 cents a share on revenue of $8.7 billion. Non-GAAP net income came to $2.3 billion. Oracle shares were down in after-hours trading.
The company said that its non-GAAP earnings per share were negatively impacted by three factors: borrowing, the strengthening US dollar and a higher tax rate from more cloud sales in the US.
Oracle's cloud business, including infrastructure as a service (IaaS), came to $969 million, up 59 percent in US dollars and up 61 percent in constant currency. Total on-premise revenue was flat in US dollars at $5.82 billion.
Meanwhile, the company is on track to sell more than $2 billion of software-as-a-service (SaaS) and platform-as-a-service (PaaS) annually recurring revenue, CEO Mark Hurd said in a statement. This should be the second year in a row that Oracle sells more SaaS and PaaS than any cloud services provider, he said.
In the first quarter, the company added more than 750 new SaaS customers, including 344 new SaaS Fusion ERP customers. "That's more ERP customers than Workday has sold in the history of their company," Hurd said.
Oracle chairman and CTO Larry Ellison noted in a statement that the company will introduce the second generation of its IaaS next week at Oracle OpenWorld.
"Our Generation2 IaaS delivers twice the compute, twice the memory, four times the storage and ten times more I/O at a 20% lower price than Amazon Web Services," he said. "IaaS represents a huge new cloud opportunity for Oracle to layer on top of our rapidly growing SaaS and PaaS businesses."