SAP Announces Q3 and first nine months 2017 results

SAP

New cloud bookings grew by 14% (19% at constant currencies) in the third quarter and reached €302 million. IFRS cloud subscriptions and support revenue grew 22% year over year to €937 million and non-IFRS cloud subscriptions and support revenue grew 22% year over year (27% at constant currencies) to €938 million.

IFRS and non-IFRS software revenue was €1.03 billion, stable year over year (up 3% at constant currencies). New cloud and software license order entry2 grew by 15% year over year in the third quarter. IFRS and non-IFRS cloud and software revenue was €4.66 billion, an increase of 5% (8% at constant currencies).


“SAP has evolved from the world’s system of record to the platform for the digital revolution. Led by S/4HANA, we are delivering intelligent business applications built on the most data rich architecture ever created. We see growth in every corner of the business, which is why we are again raising our guidance for the full year,”said Bill McDermott, CEO, SAP.

SAP’s “predictable revenue”, i.e. the total of cloud subscriptions & support revenue and software support revenue, was 65% of total revenue, up 1 percentage point year over year.

IFRS operating profit was up 19% to €1.3 billion. Non-IFRS operating profit was stable at €1.64 billion (up 4% at constant currencies). IFRS earnings per share increased 35% to €0.82. Non-IFRS earnings per share increased 10% to €1.01.

Operating cash flow for the first nine months was €4.13 billion, an increase of 14% year over year. Free cash flow increased 7% year over year to €3.16 billion. At quarter end, net debt was €1.71 billion, an improvement of €2 billion year over year. SAP’s strong growth and cash generation provide significant flexibility around capital allocation aimed at driving shareholder value.

Consistent with the Company’s announcement in the second quarter, SAP is on track to buy back €500 million in shares. As of the end of the third quarter, the company has bought back €288 million.

Regional Revenue Performance

SAP had a strong performance in the EMEA region with cloud and software revenue increasing 8% (IFRS) and 9% (non-IFRS constant currencies). Cloud subscriptions and support revenue grew by 42% (IFRS) and 46% (non-IFRS at constant currencies) with an especially strong quarter in Germany and Spain. In addition, SAP had strong double-digit software revenue growth in Germany, Russia and the Middle East & North Africa (MENA) region.

The Company had solid growth in the Americas region, despite the natural disasters that plagued both the United States and Mexico. Cloud and software revenue grew by 2% (IFRS) and 7% (non-IFRS constant currencies). Cloud subscriptions and support revenue increased by 13% (IFRS) and 19% (non-IFRS at constant currencies). In Cloud subscriptions and support revenue Brazil was a highlight, while the United States had a strong quarter in software revenue.

In the APJ region, SAP had a strong performance in both cloud and software revenue and cloud subscriptions and support revenue. Cloud and software revenue was up 2% (IFRS) and 9% (non-IFRS constant currencies). Cloud subscriptions and support revenue grew by 30% (IFRS) and 37% (non-IFRS at constant currencies). Japan and Australia were very strong in cloud subscriptions and support revenue. For software revenue, Australia had triple digit growth and China had strong double-digit growth.