SAP lifts full-year outlook as more customers shift to cloud

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STOCKHOLM, Oct 13 (Businesshala) – German business software group SAP (SAPG.DE) raised its full-year outlook for the third time for the third time on the back of strong performance in the third quarter as more customers move their IT operations to the cloud.

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SAP now expects full-year cloud revenue to grow 16%-19%, driving its overall cloud and software revenue up 2%-4%, it said in a statement late Tuesday.

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Operating profit for the year is expected to be flat below 2%, an improvement from its earlier forecast to an unchanged 4%.

SAP, which is moving from software licenses to subscription-based cloud services with up-front fees, in January launched Rise with SAP, an all-in-one digital transformation package.

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“We see record adoption of our applications and our platform,” Chief Executive Officer Christian Klein said in a statement. “This has led to a sharp acceleration in our cloud growth.”

SAP raised its forecast for cloud and software revenue for the full year from €200 million to €23.8 billion–24.2 billion.

The cloud backlog for flagship database S/4HANA was up 58% in constant currencies and the current cloud backlog — a measure of business to come — posted 22% growth during the third quarter.

Adjusted revenue rose 5% to 6.68 billion euros ($7.70 billion) for the third quarter ended September 30, the company reported in a preliminary earnings statement. SAP is expected to release the full result on 21st October.

Adjusted earnings per share rose 2% to 1.74 euros, backed again by its profitable venture capital investment, Sapphire Ventures.

($1 = 0.8672 Euro)

Reporting by Supanth Mukherjee; Editing by Richard Pullin and Aurora Ellis

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