German business software group SAP raised its full-year outlook for a third time on the back of a strong showing in the third quarter as more customers shift their IT operations to the cloud.
SAP now expects cloud revenue to grow by 16-19 per cent in the year as a whole, helping its overall cloud and software revenue to gain by 2-4 per cent, it said in a statement late on Tuesday. Operating profit is expected to be flat to down 2 per cent for the year, an improvement from its earlier forecast of unchanged to down 4 per cent.
SAP, which is moving to subscription-based cloud services from software licences with up-front fees, launched Rise with
SAP, an all-in-one digital transformation package in January. "We see record adoption of our applications and our platform," chief executive Christian Klein said in a statement. "This has resulted in strong acceleration of our cloud growth."
SAP raised its forecast for cloud and software revenue for the full year by 200 million euros to €23.8 billion-€24.2 billion. The cloud backlog for flagship database S/4HANA was up 58 per cent at constant currencies and current cloud backlog - a measure of incoming business - reported a 22 per cent growth during the third quarter. Adjusted revenue rose 5 per cent to €6.68 billion for the third quarter ended September 30th, the company reported in a preliminary earnings statement.
SAP is expected to release full results on October 21st. Adjusted earnings per share rose 2 per cent to €1.74 , backed again by its profitable venture capital investments, Sapphire Ventures. - Reuters