Oracle reported a 7% bump in total third quarter revenue to $13.3 billion, but Cerner continues to challenge the tech giant's bottom line.
The company's revenues including Cerner are expected to grow 4% to 6% for the year, compared to 6% to 8% growth excluding Cerner. Oracle CEO Safra Catz referred to Cerner as a "significant headwind this year."
"We expect to return to growth next year," Ms. Catz said during a March 11 earnings call, as transcribed by Seeking Alpha.
Larry Ellison, chief technology officer, expects things will turn around in the coming years. In recent months, Oracle finished moving the majority of Cerner customers to the company's Gen2 Cloud infrastructure and plans to start delivering its new ambulatory clinic cloud application suite in the next quarter. Oracle recently added more generative AI capabilities to its EHR and launched the clinical digital assistant to automatically generate prescriptions and update the EHR based on the physician's consultations with patients.
"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 customers' healthcare systems and transform Oracle Health and Cerner into a high-growth business for years to come," said Mr. Ellison on the call.
Oracle's EHR transition from the Cerner-dedicated data center to the Oracle Cloud Infrastructure has saved on costs and reduced vulnerability to ransomware attacks, Mr. Ellison said. Customers can also update applications every three months for fast modernization.
"We can now ship a new version of the Cerner application to a Cerner customer in OCI. It allows us to modernize their infrastructure very, very rapidly, deliver the voice clinical digital assistant, make the system easier to use, save doctors' time, deliver a lot more value, put it in the diagnostic imaging systems that help data intelligence systems, deliver all of that automatically on a regular three-month cadence," said Mr. Ellison. "It allows us to modernize the Cerner base very, very quickly while keeping them safe from ransomware."