Dow Jones Newswires: SAP reports cloud-driven higher revenue, confirms annual profit and sales outlook

by | Oct 25, 2022 | Stock Market

SAP SE, the German business software company, confirmed its profit and sales outlook for the year after posting higher third-quarter revenue led by growth at its cloud business. Reporting on a non-IFRS basis, the Walldorf, Germany-based company
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said Tuesday that revenue jumped to 7.84 billion euros ($7.74 billion) from EUR6.85 billion, with cloud revenue up to EUR3.29 billion from EUR2.39 billion. Software-licenses revenue fell to EUR406 million from EUR657 million.

Analysts polled by FactSet had forecast overall revenue of EUR7.65 billion, and cloud revenue of EUR3.19 billion. “We have delivered a strong cloud quarter with accelerating momentum across all key cloud indicators,” SAP Chief Financial Officer Luka Mucic said. The company said its cloud business performed strongly in all regions led by the U.S. and Germany, while activity in Brazil, China, India and Switzerland was particularly robust. SAP is moving away from software-licenses sales, once its biggest revenue streams, to subscription-based cloud services, banking on a more profitable and predictable model based on recurring revenue. “With a recurring revenue share of more than 80%, it’s clear that our transformation has reached an important inflection point, paving the way for continued growth in the future,” SAP Chief Executive Christian Klein said. Operating profit for the quarter slipped to EUR2.09 billion from EUR2.10 billion a year earlier, wi …

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