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Oracle’s fourth-quarter 2014 results show 25% growth in cloud revenues to $322m and total annual revenue of $38.3bn, up 3% year-on-year.

The supplier reported its cloud revenue separately for the first time. It represents 3% of sales.

Larry Ellison (pictured), Oracle’s CEO, talked up the company’s cloud revenue in a statement. “Oracle is now the second largest SaaS [software as a service] company in the world [behind Salesforce],” he said. “In IaaS [infrastructure as a service], we are larger and more profitable than Rackspace. We have by far the most complete portfolio of modern SaaS and PaaS [platform as a service] products in the industry: CRM: sales, service and marketing; HCM: HR, payroll and talent; ERP: accounting, procurement, supply chain. All these SaaS products run on the world’s most powerful PaaS: the Oracle in-memory multi-tenant database and Java.”

For the quarter, software and cloud revenues were up 4% to $8.9bn. GAAP (generally accepted accounting principles) cloud SaaS and PaaS revenues were up 25% to $322m, while non-GAAP SaaS and PaaS revenues were up 23% to $327m. Cloud IaaS revenues were up 13% to $128m.

New software licence revenues were unchanged at $3.8bn, while software licence updates and product support revenues were up 7% to $4.7bn.

Hardware systems revenues were up 2% to $1.5bn with hardware systems products up 2% to $870m and hardware systems support up 2% to $596m.

However, GAAP net income was down 4% to $3.6bn, and GAAP operating profit was down 2% to $4.9bn.

For the entire 2014 fiscal year, total revenues were up 3% at $38.3bn, while GAAP software and cloud revenues were up 5%. Cloud SaaS and PaaS revenues were up 23% to $1.1bn while cloud IaaS revenues were up $456m.

For the year, new software licence revenues were unchanged at $9.4bn, while software licence updates and product support revenues were up 6% to $18.2bn.

Total hardware system revenues were flat at $5.4bn.

GAAP operating income was up 1% to $14.8bn, and GAAP operating margin was 39%.

Oracle president and CFO Safra Catz said a transition to an ‘as a service’ model is necessarily softening software sales in the short run. “Our cloud subscription business is now approaching a run rate of $2bn a year,” she said. “As our business has transitioned, more software revenues are being recognised over the life of a subscription, rather than upfront.”

On the hardware front, Oracle president Mark Hurd said: “We have transformed Sun’s commodity hardware business into a profitable and growing engineered systems business. Our overall hardware business grew 2% in constant currency this year.”

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