What's going on?

Oracle probably saw this one coming: after laying out a foreboding quarterly update for investors, the world�s second-biggest software company�s stock initially fell 5% on Wednesday.

What does this mean?

Seeing as Oracle�s last quarter ended in May, its results showed the full coronavirus-stained picture. The company fell victim to delayed payments as businesses tried to save themselves money, maybe because they thought Oracle � with its $37 billion bank balance � didn�t need it as much as they did. Throw in nervous customers that might�ve paid for Oracle�s services in better circumstances, and it�s little surprise the company�s revenue and profit came in lower than expected.


And given we�re stuck with those circumstances for a while, Oracle isn�t forecasting its sales will grow at all this quarter versus the same time last year. That�s a far cry from the growth software giants like Amazon�s AWS and Microsoft are expected to turn in � even if it is what Oracle�s investors predicted.

Why should I care?

The bigger picture: Zoom this, Zoom that.

With so many people forced to work from home, cloud-based software companies like Zoom have benefited from an increase in demand. But not everyone’s a Zoom: �enterprise software� � which includes Oracle�s specialties of employee management, databases, and resource planning � is expected to take a hit as companies reprioritize their spending. Near term, then, Oracle�s opportunity lies in converting its big software customers into cloud-based software customers, just like Adobe and Salesforce have done.

Zooming out: Fool me once…

Next month, we�ll start to hear how most companies have done in the second quarter. Analysts are setting expectations low: they think major US companies� earnings will be 44% lower than the same time last year. But even that could be generous. Only 48 of those companies have given second-quarter earnings guidance, and almost four times as many have washed their hands of their own previous forecasts. That suggests investors could be in for some big surprises�