Why Oracle Stock Is Rising Today

Oracle (ORCL 11.92%) the stock rises in Tuesday morning trading. The company’s stock price was up 12.3% at 11:30 a.m. ET, according to data from S&P Global Market Intelligence.

After the market closed yesterday, Oracle released results for the first quarter of its current fiscal year (which ended August 30). The company beat Wall Street’s sales and earnings for the period and also announced promising new cloud partnerships with Amazon and Alphabet.

Cloud momentum fuels Q1 beats for Oracle

Oracle posted non-GAAP (generally accepted accounting principles) adjusted earnings per share of $1.39 on revenue of $13.3 billion in the fiscal first quarter. The company’s earnings performance beat the average analyst target by $0.06 per share, and sales were $60 million above the average target.

Sales rose 6.8% year over year in the quarter, but other growth numbers were significantly more encouraging. Remaining performance obligations, a measure that tracks services contracted for but not yet delivered and recorded as sales, rose 53% year over year to $99 billion. Meanwhile, total cloud revenue rose 21% year over year to $5.6 billion.

Within the global cloud category, the infrastructure-as-a-service (IaaS) component of category sales grew 45% year-over-year to reach $2.2 billion, and software-as-a-service (SaaS) cloud applications grew up 10% year over year to reach $3.3 billion.

Oracle issues strong guidance and secures new cloud partnerships

For the fiscal second quarter, Oracle expects sales to grow between 7% and 9% on a constant currency basis. Management expects total cloud revenue to grow between 23% and 25% on a currency-adjusted basis, and adjusted earnings per share are expected to be between $1.42 and $1.46 — good for a approximately 8% increase at the midpoint of the guidance range. .

In addition to solid guidance, the company also unveiled new cloud integrations. With yesterday’s earnings update, Oracle revealed a new partnership with Amazon Web Services (AWS) and created a new service that will allow AWS users to use Oracle Autonomous Database and Oracle Exadata Service. Oracle also highlighted a similar bid for Alphabet’s Google Cloud infrastructure service.

Oracle is still a small player in the cloud infrastructure space compared to Amazon, Microsoftand Alphabet, but shows encouraging momentum. New database integrations with leading IaaS providers should help the company grow its global footprint in the space and become a bigger part of customers’ multicloud strategies.