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Oracle’s Cloud Transition Appears to Be Paying Off

March 15, 2017, 8:20 PM UTC

Business software maker Oracle reported better-than-expected rise in quarterly adjusted revenue and profit as the company benefits from its transition to cloud-based products.

Oracle’s shares rose 3.3% to $44.45 in extended trading on Wednesday.

Sales of the company’s cloud-computing software and platform service rose nearly 62 percent to $1.19 billion, while its software licensing business fell nearly 16%. “The increase in revenue from our cloud business is starting to overtake our new software license business decline,” Safra Catz, Oracle chief executive had said during the second quarter earnings call.

The company’s shift to cloud-based products to tackle the shrinking licensing business was strengthened with its $9.3 billion NetSuite acquisition in July. The deal helped the company to take on nimbler rivals such as Workday (WDAY) and (CRM).

Net income rose to $2.24 billion, or 53 cents per share, in the third quarter ended Feb. 28, from $2.14 billion, or 50 cents per share, a year earlier.

The company’s total adjusted revenue rose to $9.27 billion from $9.01 billion.

Excluding items, Oracle (ORCL) earned 69 cents per share.

Analysts on average had expected revenue of $9.26 billion, and a profit of 62 cents per share according to Thomson Reuters