(Reuters) -Oracle missed Wall Street expectations for second-quarter revenue and adjusted profit on Monday, hit by stiff competition and softer-than expected spending on its database and cloud services as enterprise clients slash budgets amid an uncertain economy.
Shares of the company were down over 7% in extended trading.
Despite seeing healthy growth in its cloud segment, Oracle (NYSE:) competes with cloud heavyweights such as Microsoft (NASDAQ:) and Amazon (NASDAQ:), which have established a large presence in the field.
Wall Street expectations for AI-linked firms have been high as they bet on the technology to be a strong growth driver in the future. The company’s shares have soared over 80% so far this year.
Oracle reported revenue of $14.06 billion in the second quarter, up 9% from a year ago, but below estimates of $14.11 billion, as per data compiled by LSEG.
To gain market share in the competitive environment, Oracle has partnered with these so-called cloud hyperscalers by embedding its database architecture within Microsoft’s Azure and Amazon’s web clouds, allowing customers to connect data across various applications.
The company’s cloud services and license revenue jumped 12% to $10.81 billion in the quarter ended Nov. 30.
Oracle’s chief executive Safra Catz said total Oracle cloud revenue should top $25 billion in this fiscal year, as it makes hefty investments into upgrading its cloud architecture and integrating AI into it.
On an adjusted basis, the company earned $1.47 per share, compared with estimates of a profit of $1.48 per share.
Remaining performance obligations, the most popular measure of booked revenue, rose 50% to $97 billion in the second quarter.
