Oracle posted sales of $2.4 billion for its cloud infrastructure business in its Q2 fiscal year 2025 earnings this week, an increase of 52 percent Year-over-Year (YoY).

While described by CEO Safra Catz as "another excellent quarter with total revenue at the high end of my constant currency guidance," the company has failed to meet analyst expectations for the quarter, leading to an eight percent share value drop.

Total cloud sales, including infrastructure and applications, was $5.9 billion, below an average analyst expectation of $6bn.

Revenue overall increased nine percent to $14bn. According to Catz, cloud revenue is expected to reach $25bn for the full fiscal year, of which infrastructure cloud services will represent $9.7bn.

Revenue is expected to increase by eight percent in the next quarter, and cloud revenue by 24 percent.

Catz noted that cloud services and license support are now Oracle's largest revenue component, making up 77 percent of its total revenue, and is also its fastest-growing line item.

"This is happening for several reasons. First, our cloud is faster and thus less expensive than other clouds. We remain the preferred cloud for AI workloads, as well as for non-GPU cloud infrastructure services. In addition, our ability to deploy our cloud in many sizes gives our customers flexibility," said Catz.

Expanding on the GPU-based compute consumption, Catz noted that it was up 336 percent in the quarter, drawing attention to the company launching its 65,000 Nvidia H200 GPU AI supercomputer that became generally available in November.

Catz also pointed to the company's announced multi-cloud offerings with Google, AWS, and Microsoft this year, adding that database services are up 28 percent and have an annualized revenue of $2.2bn. "We are currently live in 17 cloud regions with database at cloud services and have another 35 planned with Azure, Google, and AWS."

Of that $2.2bn, Catz later told investors that that is still "nearly entirely OCI" without including the databases at other cloud providers, though those other offerings have also passed a $100m run rate for the year. "It clearly is going to be a very large, rapidly growing multibillion-dollar business for us," said founder and CTO Larry Ellison.

Capital expenditures reached $3.97bn in the quarter, more than the analyst projection of $3.52bn. For the fiscal year, it is expected that capex will be double the $6.87bn in FY2024.

Oracle currently has 98 cloud regions live, with "many, many more to follow," said Catz. As explained by Ellison, Oracle's smallest region that it can build is just six racks, noting that the range of smallest to largest in capacity is from 50kW to the 1.6GW data center currently under construction. "We have all of our services in all of our regions, even though we are both smaller in terms of our smallest region and larger in terms of our largest region than our competitors."

Oracle releases its quarterly earnings at a time that is different from that of its competitors. Amazon Web Services, Google, and Microsoft shared their most recent financial results at the end of October and the start of November. The companies respectively saw revenues of $27.5bn, $11.4bn, and $38.9bn, though Microsoft's cloud revenue is not solely related to its Azure cloud and includes other offerings.