Oracle Corporation (NYSE:ORCL) expects a drop in the revenue in the current quarter. The company attributes the drop to a few new license sales as many clients in the retail and hospitality industries delay purchase of software amid the COVID-19 pandemic. Oracle expect between a 1% gain and a 1% drop in the period ending in August. This was said by the company’s CEO, Safra Catz said in a conference call. The company’s projection matched estimates by several analysts, according to data compiled by Bloomberg.
Catz and Executive Chairman, Larry Ellison, have been working to turn around the company’s fortune and maintain a growth trajectory. Oracle is the world’s second largest software company and has recently expanded operations into cloud applications, servers, and public cloud services. The software giant has been working hard to reinvent itself as an internet-based company and positioning itself among key players like Microsoft Corporation (NASDAQ:MSFT) and Amazon.com, Inc. (NASDAQ:AMZN)
Oracle Having Problems Switching existing database customers to cloud-based offerings
Oracle was caught off guard by the shift to internet-based computing and struggled to shift its customers to cloud-based offerings. The move is aimed at making the company more competitive against giants like Microsoft and Amazon. Oracle reported a 6.3% drop in revenue to $10.4 billion in the fiscal fourth quarter missing analysts’ estimates of $10.7 billion. The company projects that the ongoing changes will drive revenue as it migrates its massive on-premises install base to emerging products like its autonomous database service and public cloud.
Oracle reported a 22% drop in its cloud license and on-premise license sales to $1.96 billion on May 31. Many companies have stopped pursuing new products amid the pandemic, especially because the company’s software for managing corporate finance, organizational data, customers, and employees require extensive setup time and power.
The company’s revenue from cloud-based accounting and financial planning software rose 32% in the fourth quarter from a year ago. Software for managing employees went up 27%.
