Financial Performance

SAP Sales Rise 13% on Strong Cloud Growth

“Despite continued macro uncertainties we couldn't be more confident” that 2019 will be “another stellar year” for SAP, CFO Luka Mucic says.
Matthew HellerOctober 21, 2019

SAP shares rose more than 2% on Monday after the enterprise software giant reported strong quarterly results reflecting the growth of its cloud business.

For the third quarter, SAP’s total revenue increased 13% to 6.79 billion euros, with cloud revenue up 37% to $1.79 billion and new cloud bookings up 39% to 572 million euros.

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The company made an operating profit of 1.68 billion euros, up 36% from a year ago. In the second quarter, it reported a 21% drop in profit due to hefty restructuring costs resulting from such acquisitions as the recent $8 billion purchase of Qualtrics.

Luka Mucic, SAP’s CFO

Investors had been expecting a strong third quarter after SAP announced preliminary results last week. It attributed the gain in profit to “disciplined hiring and accelerated operating efficiency gains” as well as lower share-based compensation expenses.

In trading Monday, its shares rose 2.3% to $132.11 on the New York Stock Exchange.

“In April we promised a stronger focus on profits and here we go: Q3 marks yet another milestone in delivering on this commitment,” CFO Luka Mucic said in a news release, noting that the company had kept its “second promise” of continued strong top-line momentum.

“Despite continued macro uncertainties we couldn’t be more confident” that 2019 will be “another stellar year” for SAP, he added.

Those uncertainties have included the U.S.-China trade conflict, which has dampened SAP’s software license sales in the Asia region and affected other tech companies, including Apple. SAP’s cloud and software revenue rose 9% in Asia in the second quarter, with cloud alone increasing 40%.

“In the [Asia] region, SAP had a solid quarter amidst a challenging market environment,” the company said, citing an “exceptional quarter” for software license revenue in Japan.

Overall software license revenue fell 1% to 932 million euros.

“We have continued to execute extremely well on our cloud transition in the first nine months [of 2019] — a dynamic cloud business … combined with a stable core, leading to double digit topline growth,” Mucic said last week.

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