SAP Q1 2018: Cloud revenue breaks €1bn, 400 more S/4 customers

SAP’s overall first-quarter revenue was flat, but cloud revenue and profitability were up, while its S/4 Hana customer base stands at 8,300

SAP has announced €5.26bn revenue for the first quarter of 2018, of which €1.1bn – 21% of the total – was for cloud subscription and support.

This compares with €5.28bn top-line revenue in the equivalent quarter last year – a decrease of 0.4%, effectively flat.

However, cloud revenue increased by €165m, up 18% on the first-quarter 2017 figure of €905m. And new cloud bookings, which the supplier likes to stress as a metric, were up 25% to €245m. As a proportion of overall revenue, cloud has gained about three percentage points over the same quarter last year.

Operating profit jumped to €1.025bn, up 52%, and profit after tax to €708m, up 33% on the first quarter of 2017.

The supplier’s flagship S/4 Hana ERP (enterprise resource planning) system attracted 400 new customers in the quarter, up 43% year on year to reach 8,300. Australian mining company MacMahon Holdings and German management consultancy Detecon International were named among the new customers in SAP’s quarterly statement.

In January, SAP announced the acquisition of Callidus Software, a Californian “lead to cash” cloud-based firm. That deal is now closed and is expected to boost the firm’s cloud revenues for 2018.

SAP Leonardo, SAP’s artificial intelligence/machine learning, IoT and blockchain “toolbox”, has been taken up by Airbus, DBS Informatik and Thyssenkrupp, according to the supplier.

In the EMEA region, total revenue was €2.368bn, of which €753m was from Germany – 32% of the total. In the Americas, total revenue was €2.063bn, and in Asia-Pacific and Japan it was €830m.

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Bill McDermott, SAP’s chief executive officer, said in a statement: “SAP’s momentum continues with our latest trifecta, including fast-growing cloud, strong software sales, and operating income expansion. Even against the steepest comparisons, S/4 Hana led us again to major market share gains for the company.

“With an increasing share of predictable revenues, our beyond expectations profitability is cause for even greater shareholder confidence. From this position of immense strength, look for SAP to be bolder than ever in markets like CRM.”

Luka Mucic, SAP’s chief financial officer, said: “There are two things I am particularly proud of in Q1: we faced a very strong prior year quarter comparison and still delivered cloud and software growth above our full-year guidance. Moreover, we increased operating margins while continuing to invest in our people and our portfolio.”

Read more on Enterprise resource planning (ERP) software

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