SAP Backs Outlook After 3Q Revenue Jumped on Cloud Business
25 October 2022 - 4:37PM
Dow Jones News
By Mauro Orru
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 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.
SAP is moving away from software-licenses sales, once its
biggest revenue stream, to subscription-based cloud services,
banking on a more profitable and predictable model based on
recurring revenue.
Operating profit for the quarter slipped to EUR2.09 billion from
EUR2.10 billion last year, with SAP's operating margin down to
26.7% from 30.7%. Analysts polled by FactSet had forecast operating
profit of EUR2 billion.
For the year, SAP continues to expect non-IFRS operating profit
at constant currencies between EUR7.6 billion and EUR7.9 billion,
and cloud revenue at constant currencies between EUR11.55 billion
and EUR11.85 billion. However, free cash flow is now expected at
roughly EUR4.5 billion against a previous forecast above EUR4.5
billion.
Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94
(END) Dow Jones Newswires
October 25, 2022 01:22 ET (05:22 GMT)
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