The German enterprise software giant
late Tuesday pre-announced better-than-expected results for the September quarter and raised its guidance for the full year. The company showed signs of traction in its shift to cloud-based versions of its applications. On the news, SAP’s American depositary receipts have ticked up 2.2%, to $137.60, in late trading.
For the quarter, SAP (ticker: SAP) posted overall revenue of 6.84 billion euros ($7.89 billion), up 5% from a year earlier and edging the Street consensus of €6.73 billion. Cloud revenue was €2.39 billion, up 20% and roughly in line with estimates. Software license and support revenue was €3.52 billion, down 1% from a year ago but above the Street consensus at €3.325 billion. Cloud and software revenue combined was €5.91 billion, up 7%, and above the Street consensus at €5.76 billion.
SAP said its cloud backlog was €8.2 billion at the quarter’s end, up 24% from a year ago, including a 60% increase in the backlog for S/4 Hana, the cloud version of its flagship enterprise resource-planning software. That’s an acceleration on both fronts: Overall cloud backlog grew 20% in the June quarter and 19% in March, while backlog for S/4 Hana increased from 48% in the June quarter and 43% in the March quarter.
Earnings on an adjusted basis were €1.74 per share, well above the Street consensus at €1.32; under standard accounting rules, SAP earned €1.19 a share, again above the Street at 82 euro cents per share.
“Our strategy is clearly working,” SAP CEO Christian Klein said in a statement. “Customers are choosing SAP for their business transformation in the cloud. We see record adoption of our applications and our platform. This has resulted in strong acceleration of our cloud growth.”
SAP also nudged up its guidance for the full year. The company now sees cloud revenue ranging from €9.4 billion to €9.6 billion, up from a previous range of €9.3 billion to €9.5 billion. SAP expects cloud and software revenue combined to be between €23.8 billion and €24.2 billion, up from a previous estimated range of €23.6 billion to €24.0 billion. Operating profit is now projected to be between €8.1 billion and €8.3 billion, up from a previous estimate of €7.95 billion to 8.25 billion.
Write to Eric J. Savitz at [email protected]