SAP: We’re all about the cloud – never mind those stagnating software numbers

A successful quarter for SAP’s cloud business has been tempered by a 6 per cent drop in profits and a dip in its share price.

The German ERP giant today announced its Q3 results (PDF) for the three months to 30 September 2018, marking the third consecutive quarter where its cloud revenues surpassed €1bn.

It reported an overall boost in revenues of 8 per cent, to €6bn, with some €1.3bn of this coming from cloud subscription and support – a 39 per cent increase compared with the previous year’s results. It also reported a 37 per cent increase in new cloud bookings – a favourite metric for Wall Street as it is an indicator of future revenues.

SAP used the cloudy success as the basis for raising its outlook for the full year 2018, setting expected revenues of between €25.2bn and €25.5bn, up €200m from previous estimates.

However, the rise of the cloud business was accompanied by plateauing software licensing and support, which makes up a bigger chunk of the firm’s overall €6bn revenues.

These revenues fell slightly, from €3.720bn to €3.702bn in Q3 2018, compared with Q3 2017. Within this, software licence revenue fell 9 per cent, year-on-year, to €937m, while software support grew 3 per cent, to €2.766bn. Operating profits dropped 6 per cent, from €1.3bn to €1.2bn.

Source: The Register

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