Oracle reports sustained growth in both Q4 and full year results thanks to high AI demand

Cloud revenue for the vendor soared 20 per cent driven by the demand for training AI large language models on the Oracle Cloud Infrastructure

Oracle has reported three per cent growth in Q4 year-over-year, pushing revenues to $14.3bn.

The results also showed cloud revenue (IaaS and SaaS) soaring 20 per cent to $5.3bn, fuelled by a 42 per cent increase in cloud infrastructure (IaaS) revenue.

For the full fiscal year 2024, Oracle's total revenue rose six per cent to $53bn, with cloud services and license support revenue increasing 12 per cent to $39.4bn.

The company said growth was driven by a surge in demand for training AI large language models on the Oracle Cloud Infrastructure (OCI).

Oracle CEO Safra Catz revealed that the company signed the largest sales contracts in its history during the third and fourth quarters, propelled by this AI demand. As a result, Oracle said its total remaining performance obligations (RPO) skyrocketed 44 per cent to $98bn.

Catz expressed confidence in continued strong AI demand, forecasting double-digit revenue growth for fiscal year 2025, with each successive quarter expected to grow faster than the previous one as OCI capacity catches up with demand.

In 2023, CTO Larry Ellison called genAI a "boon", claiming it would benefit Oracle greatly, and this prediction appears to be materialising.

He said: "You can't build any of these AI models without enormous amounts of training data.

"If anything, what generative AI has shown is that the big issue about training one of these models is just getting this vast amount of data ingested into your GPU supercluster.

"It is a huge data problem, in the sense that you need so much data."

Ellison continued: "We think it's a boon to our business. And we are now getting into the deep water of the information age.

"Nothing has changed about that. The demands on data are getting stronger and more important."

Oracle also announced significant developments in its multi-cloud strategy. Its cooperation with Microsoft expanded, with the companies agreeing to work together to support OpenAI and ChatGPT.

Additionally, 11 of the 23 OCI datacentres being built inside Azure went live during the fourth quarter.

Furthermore, Oracle signed an agreement with Google to interconnect their clouds and initially build 12 OCI datacentres inside the Google Cloud, with the Oracle database expected to be available within the Google Cloud in September.

The company also announced a quarterly cash dividend of $0.40 per share.