Database giant Oracle Corp. saw strong growth in its emerging cloud platform and infrastructure businesses, but not quite strong enough as the company missed its revenue targets today, sending its stock down 2% in after-hours trading.

The company reported a fiscal first-quarter profit before certain costs such as stock compensation of $1.03 per share on revenue of $9.7 billion, up 4% from one year ago. Wall Street had been looking for an adjusted profit of 97 cents per share on higher revenue of $9.77 billion.

Oracle’s net income for the quarter came to $2.9 billion.

Oracle Chief Executive Safra Catz (pictured) claimed the company delivered “excellent” results, noting that in constant-currency terms, it did beat revenue guidance by $100 million, with each of its main sales segments exceeding the forecast. She also pointed to the growth of Oracle’s new infrastructure-as-a-service and software-as-a-service businesses, which now account for more than 25% of the company’s overall revenue and have an annual run rate of $10 billion.

“Taken together, IaaS and SaaS are Oracle’s fastest-growing and highest-margin new businesses,” Catz said. “As these two cloud businesses continue to grow, they will help expand our overall profit margins and push earnings per share higher.”

The CEO added that with their accelerating growth rates, the IaaS and SaaS businesses will likely end the fiscal year with revenue run rate growth in the mid-20% range.

Looking deeper into the numbers, Oracle Cloud Infrastructure consumption revenue jumped 80% in constant-currency terms, Catz said. In the previous quarter, Oracle founder and Chief Technology Officer Larry Ellison told analysts around half of all workloads on OCI are Oracle Database, with everything else making up the other 50%.

Another bright spot was Oracle’s Cloud@Customer revenue, which rose 44%, with consumption up 150%. Cloud@Customer is a hybrid product that effectively brings all of the public cloud services offered by Oracle into a customer’s own data center, similar to Microsoft Corp.’s Azure Stack.

Catz told analysts in the conference call that new Oracle Cloud@Customer users take awhile to get set up because the company follows a special security model. But once they’re up and running, she said, “then they realize how incredible it is. It is a global product, it is completely differentiated and it is very profitable for us.”

Another highlight was enterprise resource planning services, with Fusion ERP cloud revenue up 32% and NetSuite ERP cloud revenue up 28%.

On the call Ellison quickly took over from Catz to discuss the strength of the cloud ERP business, noting that Oracle had signed up new customers in the financial services and healthcare sectors. “Banking and healthcare will be Oracle’s two largest verticals going forward,” he explained.

Overall, Oracle’s largest business segment, cloud services and license support, saw sales rise 6% in the quarter, to $7.4 billion. Within that segment, applications, cloud services and license support pulled in $3.04 billion, up 8%, while infrastructure cloud services and license support added $4.3 billion, up 5%.

“Cloud is fundamentally a more profitable business compared to on-premise, and as we look ahead to next year, we expect company operating margins will be the same or better than pre-pandemic levels,” Catz said.

Although investors were clearly hoping for more impressive results on the bottom line, analysts were more encouraged by Oracle’s performance.

“In its traditionally weak first quarter, Oracle did relatively well, growing at a low rate,” said Holger Mueller of Constellation Research Inc. “The fact it showed growth on the application side as well as the technology side is a testament to the competitive features and capabilities of Oracle’s products. The pressure is on Oracle to sustain this growth momentum in cloud services for rest of the financial year.”

Patrick Moorhead of Moor Insights & Strategy got straight to the point, saying Oracle is progressing well in the areas that count.

“At this juncture, I care most about how Oracle is doing in its cloud businesses,” he said. “That 25% growth is impressive if you consider so many had counted the company out. As Cloud@Customer is currently the simplest hybrid cloud solution, the 40% number doesn’t surprise me.”

Pund-IT Inc. analyst Charles King told SiliconANGLE the after-hours stock dip suggests that shareholders weren’t buying the CEO’s “constant currency” explanation of the revenue miss. “That, or they may have been hoping for a brighter point of view on future growth estimates,” he said.

Of Oracle’s smaller business segments, the cloud license and on-premises license unit added an additional $813 million in revenue, down 8%. Hardware sales fell 6%, to $763 million, and services rose 8%, to $781 million.

Oracle had some important customer wins in the quarter, notably with Bank of America Corp. going live on Oracle Fusion ERP and consolidating ledgers from 33 countries it does business in, into a single global cloud ledger.

The company also announced a new support rewards program during the quarter that’s meant to entice more customers to adopt its public cloud services with the promise of free or discounted support.

Looking ahead to the next quarter, Oracle said it’s guiding for adjusted earnings of between $1.09 and $1.13 per share on revenue growth of 3% to 5%. Wall Street is looking for earnings of $1.08 per share on revenue growth of 5%.

Photo: Oracle/Flickr