Oracle Raises Dividend 25%

Image Source: TradingView

By Brian Nelson, CFA

Oracle (ORCL) reported third quarter fiscal 2025 results March 10 that missed the consensus estimates, but a strong Remaining Performance Obligation number and a dividend raise were enough for investors. Total revenue increased 6% in USD and 8% in constant currency for the fiscal third quarter. GAAP earnings per share advanced 20% year-over-year, while non-GAAP earnings per share increased 4%, to $1.47. Total Remaining Performance Obligations jumped 62% in USD (up 63% in constant currency), to $130 billion.

Management was upbeat about its outlook:

Oracle signed sales contracts for more than $48 billion in Q3. This record sales number pushed our Remaining Performance Obligations, or RPO, up 63% to over $130 billion. We have now signed cloud agreements with several world leading technology companies including: OpenAI, xAI, Meta, NVIDIA and AMD. We expect that our huge $130 billion sales backlog will help drive a 15% increase in Oracle’s overall revenue in our next fiscal year beginning this June. And we expect RPO to continue to grow rapidly—as we look forward to signing our first Stargate contract—yet another big opportunity for Oracle to expand both its AI training and AI inferencing businesses in the near future.

We are on schedule to double our data center capacity this calendar year. Customer demand is at record levels. Our Database MultiCloud revenue from Microsoft, Google and Amazon is up 92% in the last three months alone. GPU consumption for AI training grew 244% in the last 12 months. And we are seeing enormous demand for AI inferencing on our customers’ private data. So, we are connecting OpenAI ChatGPT, xAI Grok and Meta Llama directly to Version 23ai of the Oracle Database with advanced vector capabilities. This new product, called the Oracle AI Data Platform, makes it easy for customers to use any of the world’s leading AI models to analyze all of their private data—while keeping all their data private and secure.

Oracle’s third quarter Cloud Revenue (IaaS plus SaaS) advanced 23% in USD (up 25% in constant currency). Cloud Infrastructure Revenue was up 49% in USD (up 51% in constant currency). Third quarter Cloud Application (SaaS) Revenue was up 9% in USD (up 10% in constant currency). Fusion Cloud ERP (SaaS) Revenue was up 16% (up 18% in constant currency). Third quarter NetSuite Cloud ERP (SaaS) Revenue advanced 16% (up 18% in constant currency). Oracle raised its quarterly dividend 25%, to $0.50 per share, a move that we like a lot. Oracle remains a key idea in the Dividend Growth Newsletter portfolio.

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