Oracle Jumps After Big Cloud Contracts Spur Bookings Growth

(Bloomberg) — Oracle Corp. surged 13% after reporting a spike in bookings attributed to its closely watched cloud computing business, showing progress in its bid to capture more share of the competitive market.

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Remaining performance obligation — a measure of Oracle’s sales backlog — was $80 billion at the end of the quarter ended in February. That was significantly ahead of the $59 billion expected by analysts. Chief Executive Officer Safra Catz pointed to this figure, which she said was driven by “large new cloud infrastructure contracts signed in the third quarter,” as evidence of momentum.

The Austin-based company, known for its database software, is focused on expanding its cloud infrastructure business to compete with Amazon.com Inc., Microsoft Corp. and Alphabet Inc.’s Google. That effort has faced headwinds in recent quarters as growth rates slowed. But there were signs of stabilizing in the third quarter, with sales gaining at nearly the same pace as the three months preceding it.

Shares jumped to as high as $130.72 in extended trading. Oracle’s stock had been down about 10% over the past six months through Monday’s close, lagging the iShares software ETF, which gained 16%.

“We expect to continue receiving large contracts reserving cloud infrastructure capacity,” Catz said on a conference call, adding that Oracle is “very rapidly” opening new data centers to meet demand.

Cloud revenue jumped 25% to $5.1 billion in the period that ended in February, the company said, just ahead of Wall Street’s $5.06 billion estimate. Of that, $1.8 billion came from renting out computing power and storage over the internet and $3.3 billion from applications.

The results were “certainly better than feared,” said Jeffries analyst Brent Thill in an interview on Bloomberg TV, noting that other cloud vendors like Amazon and Microsoft have similarly reported strong results recently.

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Total sales in the fiscal third…