On Dec. 14, Adobe Systems Inc. (ADBE, Financial) and Oracle Corp. (ORCL, Financial) reported earnings for the three months ending Dec. 2. The past three months represent Adobe’s fourth quarter of fiscal 2017 and Oracle’s second quarter of fiscal 2018.
San Jose, California-based Adobe said quarterly revenues increased 25% year over year. Likewise, Redwood Shores, California-based Oracle said quarterly revenues increased 6% year over year.
Adobe earnings
Adobe CEO Shantanu Narayen said fiscal fourth-quarter revenues reached a record $2 billion, driven by strong business momentum through “market-leading solutions [Adobe] provides to empower people to create.” The company known for its PDF reader products delivered solid revenue across its business segments, including record revenues in the company’s Adobe Experienced Cloud business and Creative and Document Cloud business.
For the full year, Adobe reported record annual revenues of $7.30 billion, up 25% from fiscal 2016 revenues. Digital Media annualized recurring revenues increased $1.24 billion during the year while operating income based on generally accepted accounting principles increased 45% year over year. Such results contributed to strong operating margins, which are near a 10-year high of 28.84% and outperforming 93% of global application software companies. As the company has strong profit margins, GuruFocus ranked Adobe’s profitability 8 out of 10.
Oracle earnings
Oracle CEO Safra Catz said strong cloud revenue growth contributed to a 14% increase in non-GAAP earnings and a 6% increase in total revenue from comparable figures during the prior-year quarter. Chief Financial Officer Mark Hurd added that the company’s Fusion ERP and Fusion HCM Software as a Service revenues increased 65% during the quarter, making Oracle one of the top leaders in enterprise back-office SaaS applications. Based on such results, Oracle’s profitability ranks a solid 7 out of 10.
Chief Technology Officer Larry Ellison said in the earnings release that running Oracle’s autonomous database in the Oracle cloud costs 50% less than it will in the Amazon.com Inc. (AMZN, Financial) cloud.
Price impact and conclusions
Although Adobe’s share price increased, Oracle’s share price tumbled 4.24% from its previous close of $50.19.
Although Oracle has a slightly higher 10-year revenue growth rate, Adobe generally had higher revenue per share than Oracle did over the past 10 years according to the chart below.
Disclosure: I do not have positions in the stocks mentioned.
