Oracle Corp’s quarterly profit blew past analysts’ estimates as the business software maker’s big push towards cloud-based products and services paid off. The company’s shares were up 5 percent at $48.74 in after-market trading on Wednesday. Oracle said cloud-computing and on-premise software business revenue rose 5.3 percent to $8.88 billion in the fourth quarter ended May 31. The business accounted for 78 percent of total revenue in 2016.
The company has been shifting to a cloud-based service as customers increasingly shun the costlier licensing model, a pattern also adopted by rivals such as Microsoft Corp, SAP SE and Amazon.com Inc. In an effort to strengthen its cloud business, Oracle signed a deal with AT&T Inc in April, under which the U.S. telecom company agreed to move some of its large-scale databases to Oracle’s cloud platform.
The company had said it expected more of its “big customers” to migrate their databases and database applications to Oracle Cloud in the coming year. NetSuite, which Oracle acquired in 2016, is also expanding its data center footprint to take on nimbler rivals such as Workday Inc and Salesforce.com Inc.
The company’s net income rose to $3.23 billion, or 76 cents per share, in the fourth quarter ended May 31, from $2.81 billion, or 66 cents per share, a year earlier. Excluding items, Oracle earned 89 cents per share. The company reported adjusted revenue of $10.94 billion.