The company’s shares were down 2.5% in after-market trading. They had gained about 37% this year.

Oracle – a late entrant to the cloud market – has been aggressively ramping up the business as more and more clients ditch the costlier software licensing model.

The company said in late August it would hire more than 5,000 engineers, consultants, sales and support people this year to boost the fast-growing business.

Total revenue in the company’s cloud business surged 51.4% to $1.47 billion in the three months ended Aug. 31.

The strong growth in its cloud business was a promising sign for the enterprise tech giant, said Jeff Reeves, executive editor and analyst with InvestorPlace.com.

Oracle’s cloud business recently won contracts from Mitsubishi Electric and Bank of America among others.

In May, the No.2 U.S. telecom services provider AT&T agreed to move some of its large-scale databases to Oracle’s cloud platform.

“”With (Software as a Service) revenue up 62 percent, our cloud applications business continues to grow more than twice as fast as Salesforce.com,” Oracle CEO Mark Hurd said in a statement.

The company also benefited from outperformance in its traditional software licensing business.

Revenue in the business rose 1.6% to $5.92 billion in the latest reported quarter.

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The company’s net income rose to $2.21 billion, or 52 cents per share, in the first quarter, from $1.83 billion, or 43 cents per share, a year earlier.

On an adjusted basis, Oracle earned 62 cents per share.

Total adjusted revenue rose to $9.21 billion from $8.61 billion.

Analysts on average had estimated the company to report a profit of 60 cents per share and adjusted revenue of $9.03 billion, according to Thomson Reuters I/B/E/S.

The beat was helped by new software license outperformance and lower foreign exchange impact, Wedbush Securities analyst Steve Koenig said in an email.