The board also declared a quarterly cash dividend of 15 cents per share. Shares of Oracle's stock fell more than 2 percent after hours.
After the surprise Brexit vote in June created currency headwinds for Oracle last quarter, this quarter was hampered by an unforeseen Egyptian currency exchange loss. The U.S. election also impacted the dollar more than expected, Oracle said. The greenback is up 4.5 percent year to date against a basket of currencies, and up 3 percent over the past month.
Significant currency headwinds are expected to continue in the fiscal third quarter, executives told investors. Earnings for that quarter are expected to be between 61 cents and 64 cents, in constant currency, executives said, on the lower end of the 64 cents per share expected by StreetAccount.
Still, Oracle CEO Mark Hurd said the company's third quarter has a chance to be its "best quarter ever, period."
Oracle's financial results come on the heels of a wide-ranging discussion between President-elect Donald Trump and technology CEOs, including Oracle Chief Executive Safra Catz, who was officially added to Trump's transition team on Thursday. Catz will remain at Oracle.
Trump campaigned on lower corporate taxes — and Catz told investors on Thursday that in view of possible changes to the U.S. corporate tax system, there was a higher likelihood of favorable tax impacts for Oracle, though that was not certain.
Like many legacy technology companies, Oracle has mounted an uneasy transition from its core database business toward faster-growing sectors like cloud, software as a service (SaaS) and platform as a service (PaaS). Though investments in the future of the company have impacted certain margins, cloud sales are now starting to overtake Oracle's old software business, Catz told investors on the conference call.
"Our cloud revenue will be larger than our new software licenses revenue next fiscal year, when the transition will be largely complete," Catz said in a statement. "While the investments we've made to transition our business to the cloud have limited our ability to expand earnings per share near term, they've been important to ensure that Oracle remains a technology leader. ... We expect our business to exhibit the same pattern we delivered over the previous decade — increasing revenue that results in EPS and cash flow that grow even faster."
Oracle's software and cloud revenue hit $7.2 billion, slightly below the $7.31 billion expected by a StreetAccount consensus estimate. Total quarterly cloud revenue hit $1.1 billion, the first quarter that it was more than $1 billion.
Investors were watching for the company to hit a key goal: Chairman Larry Ellison set a goal to be the first cloud company to reach $10 billion in annual SaaS and PaaS revenue. Rival Salesforce.com said last month it was on pace to hit that objective first.
"We can beat them to the $10 billion mark, but it's going to be close," Ellison said. "We are catching up to them, and we are catching them very quickly."
Hurd said Oracle had passed Salesforce.com to become the No. 1 in SaaS cloud applications sales to customers with more than 1,000 employees.
Oracle also recently closed its $9.3 billion merger with NetSuite, a deal that got off to a rough start after pushback from shareholders, in part because of Ellison's shares of Netsuite.
"With the acquisition of NetSuite, we plan on being the No. 1 cloud applications service provider for companies with less than 1,000 employees as well," Hurd said.
— Reuters contributed to this report.