Oracle’s fiscal second-quarter report showed total cloud service revenue coming in around $5.9 billion, which was about 1% below expectations. The company projected total revenue growth of 7% to 9% year over year for the current quarter, which was below the consensus forecast for growth of about 10.4%.
Oracle is having to spend a lot. Capital expenditures shot up 72% from the previous quarter to nearly $4 billion, and Oracle said on its call Monday that capex for the fiscal year ending in May is expected to double from the previous year. That would bring annual capex to about 24% of Oracle’s projected revenue for the year—far above the 10% of revenue Oracle averaged on capex over the previous five years.

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