Cerner is facing some "near-term headwinds" as its parent company Oracle looks to move the EHR vendor to the cloud.
"This transition is resulting in some near-term headwinds to the Cerner growth rate as customers move from licensed purchases, which are recognized upfront, to cloud subscriptions, which are recognized relatively," Oracle CEO Safra Catz said in a Sept. 11 earnings call.
Larry Ellison, chief technology officer, said Oracle is working on getting Cerner to the same operating margin as Oracle.
Currently, the company is moving all Cerner customers to the cloud to improve customers' performance and security.
Oracle is also planning to replace features of the older Cerner system with a new system. According to Mr. Ellison, the new Cerner system is currently being generated, and it's "going extremely well."
Mr. Ellison also said the Cerner health business is expected to be awarded two large new contracts, totaling a value of more than $1 billion.
This comes as Oracle reported an 8 percent increase in revenue to $12.5 billion.