Oracle CEO Safra Catz called the Cerner business a “significant headwind” and said the company was working to bring the electronic health record’s profitability up to Oracle standards.
During the company's fiscal third-quarter earnings call Monday, executives said the big tech company has begun upgrading Cerner's infrastructure and expects to have that done by the end of the next quarter.
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“We’re able to modernize those customers that are in the cloud on a regular basis and start delivering our brand-new applications, the completely rewritten Cerner application, first for ambulatory clinics and then eventually for acute care hospitals,” Chairman Larry Ellison said.
Oracle’ reported third-quarter net income of $2.4 billion, or 85 cents per share, is up 18% from the year-ago period. Revenues for the quarter were $13.3 billion, an increase of 7% from the prior year including Cerner and up 9% excluding Cerner.
Executives said Cerner should grow in 2025, and the company's investments into artificial intelligence for healthcare will help drive growth.
“The delivery of our new AI-centric healthcare cloud applications, including the ambulatory clinic system, the clinical digital assistant and the health data intelligence system, will enable the rapid modernization of our customer's healthcare systems and transform Oracle Health and Cerner into a high-growth business for years to come,” Ellison said.
Oracle bought Cerner in June 2022 for $28.4 billion. Since then, the combined Oracle/Cerner has faced a delay with its massive EHR project for the Veterans Affairs Department, renegotiated its contract with the VA at the agency’s request from a five-year deal to five one-year deals, and laid off employees last June. In the past five years, the company has lost market share to Epic, its chief rival in the EHR market.
Oracle's stock was up 11% on Tuesday morning share price of $126.20.
