SAP Q2 2022: Revenue up 13%, Ukraine war impact steady at €300m

SAP has announced first-quarter revenue of more than €7.5bn, and restated its expectation that Ukraine war is projected to have a €300m impact in 2022

SAP has announced its Q2 financial results, showing a 13% increase in revenue to €7.517bn, year on year, with cloud revenue up by 34% to €3.056bn – 41% of the total.

Cloud revenue looks to be steady as a percentage of overall revenue, after the Q1 revenue percentage came to 40%. The impact of the war in Ukraine was estimated as €300m, for the year, when the first quarter financial results were disclosed, and that is the same figure the supplier is projecting with the more recent results.

SAP’s flagship enterprise resource planning system, S/4Hanalaunched in February 2015, attracted 650 customers, increasing total adoption to approximately 20,000 customers, up 15% year over year. 14,500 of those 20,000 are live, about 72% of the total.

Christian Klein, SAP CEO, said: “As our Q2 results demonstrate, SAP’s portfolio is more relevant than ever. Our transition to the cloud is ahead of schedule and we have exceeded topline expectations, with cloud revenue becoming SAP’s largest revenue stream. Our pipeline is strong, and we are winning market share, underpinned by the very strong 100% growth of S/4Hana’s current cloud backlog.”

Luka Mucic, chief financial officer at SAP, added: “This quarter again proves that our strategy is resonating, even in an increasingly challenging external environment. We continued to deliver strong topline growth, exceeding revenue expectations and increasing cloud profitability. This quarter, we have recognised the main impact of the war in Ukraine. We believe that we are now able to capitalise on our substantial growth investments of the last 18 months, by delivering sustained growth and profitability expansion.”

This is the second year of the supplier’s Rise with SAP service, launched at the end of January 2021. Rise has been billed as a “business transformation” service. It bundles managed cloud infrastructure and managed services into one contract, and delivers S/4 Hana over the cloud – via AWS, Google Cloud Platform and Microsoft Azure.

Rise customers cited in the earnings release include ABB Information Systems, Bridgestone Australia, Mitsubishi Materials Corporation, Moderna, Pitney Bowes, RWE, Sumitomo Rubber Industries and Zoomlion.

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Microsoft is reported to have invested in Rise, while GlobalFoundries, HeidelbergCement, Malaysia Airlines and Mapletree Investments combined Rise with other systems.

The release restated an expanded relationship with Google Cloud announced in May, which included integrations between Google Workspace and S/4 Hana Cloud. It also highlighted another “partnership” announcement, this time with IBM.

By region, Europe, the Middle East and Africa (EMEA) accounted for €3.174bn of total revenue for the quarter, the Americas €3.23bn, and AJP €1.112bn – 42%, 43% and 15% respectively.

Within EMEA, Germany accounts for €1.068bn, a still-mighty 34% in its homeland.

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