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Oracle (ORCL +12%) is trading nicely higher today after reporting nice EPS upside with its Q1 (Aug) report last night. Revenue rose 6.9% yr/yr to $13.31 bln, which was above expectations. Oracle also guided Q2 (Nov) EPS and revs in-line. What is interesting is that this marks Oracle's fifth consecutive earnings report that led to a gap in the share price. Q1 and Q2 were down but Q3, Q4 and now Q1 gapped higher.

• In addition to earnings, Oracle announced a deal with Amazon's AWS segment. Oracle Database@AWS is a new offering that allows customers to access Oracle Autonomous Database on dedicated infrastructure and Oracle Exadata Database Service within AWS. AWS has now joined Microsoft Azure and Google Cloud in making OCI and Oracle available in their respective clouds.
• Let's dig into earnings. Oracle actually missed on EPS and revs in Q4, but RPO was its saving grace. That metric helped propel the stock higher despite the EPS/revenue miss. RPO was a bright spot again in Q1 as it rose +52% CC to a record $99 bln. What's more, Oracle typically sees a seasonal decline of RPO in Q1. However, the company signed several large deals this past quarter, resulting in a sequential increase. Further, its cloud RPO grew more than 80% CC and now represents nearly 75% of total RPO.
• Oracle also echoed what we heard from Azure and AWS, which is that both are ramping up investments to build out their infrastructure to handle increased demand. In fact, Oracle says it expects its FY25 cap-ex will be double what it was in FY24. That's a big amount of growth and demonstrates Oracle's confidence in its pipeline. Oracle currently has 85 cloud regions live, with another 77 planned, with more to follow.
• The company said Oracle Database is thriving, and the multi-cloud agreements it has with Microsoft, Google, and now AWS make it easier for its customers to run their Oracle Databases in the cloud. Also, Oracle noted it's rapidly expanding its OCI capacity to meet the demand that was seen in its +52% CC RPO cloud growth. Furthermore, while much attention is focused on its GPU-related businesses, Oracle noted that its non-GPU infrastructure business continues to grow much faster than its competitors.

Overall, investors are clearly impressed with how Oracle is starting off FY25. It was not huge upside for Oracle. However, after a miss in Q4, it is nice to see Oracle get back to reporting upside. We think the huge RPO growth is having a bigger impact on the share price today. RPO typically declines sequentially in Q1, but it saw growth this year. We also think investors are pleased to see AWS partner with Oracle, which now has deals with the big three cloud names. Finally, the stock has been making a strong move since mid-December, up more than 50% since then, to a new all-time high today. And that is despite other tech names pulling back on AI jitters. We have to tip our cap to Oracle.