Oracle Corporation (NYSE: ORCL) reports earnings for its fiscal first quarter after the market closes on Thursday, September 14. In the past several weeks, the company has received several upgrades from analysts on top of string of upgrades the company received after reporting last quarter’s results.
Some of the reasons analysts have cited for their positive sentiment include continued growth in the company’s Software as a Service (SaaS), Platform as a Service (PaaS) and Infrastructure as a Service (IaaS), the ongoing transition of legacy customers to its cloud offerings and the potential for continued margin expansion in its cloud businesses.
The company made some reporting changes in the last quarter that included breaking out the results of its SaaS business and combining its IaaS and PaaS businesses. In the fourth quarter of fiscal 2017, SaaS revenue grew 67% year-over-year, to $964 million. Management also highlighted gross margin expansion in its SaaS business, which increased to 65% from 54% in the same period last year. On last quarter’s earnings call, Oracle CEO Safra Catz said management expects “to see further improvement in FY18 and remain committed to our goal of 80% SaaS gross margins over time.”
Oracle reported that revenue in its PaaS and IaaS businesses increased 40% year-over-year to $397 million in the last quarter. Gross margins in these businesses declined to 47% in fiscal Q4 of 2017, down from 54% in the prior-year quarter.
Management attributed those …