SAP Q2 2017 results: cloud revenue €932m, 500 new S/4 customers

SAP’s second-quarter revenue of €5.78bn included €932m for cloud subscription and support – 16% of the total – while new S/4 Hana customers included Centrica and Google

SAP has declared €5.78bn in second-quarter 2017 revenue, of which €932m – 16% of the total – came from cloud subscription and support.

Operating profit, however, was down by 27%, from €1.3bn in the same quarter last year to €926m. The supplier said, in a release, operating profit was “primarily impacted by a strong increase in restructuring-related expenses and share-based compensation expenses in the second quarter”.

The top-line performance compares with €5.24bn revenue in the same quarter last year, an increase of 10.3%; and an increase in cloud revenue of €212m, up by 29.4% on the second-quarter 2016 figure of €720m.

The supplier stated new cloud bookings grew by 33% in the second quarter, reaching €340m, up from €255m in the same quarter last year.

The supplier’s flagship enterprise resource planning (ERP) system S/4 Hana, based on its in-memory, columnar database Hana, has attracted more customers. It now has 6,300, up from 5,800 in the first quarter of this year. Google, Centrica and Spanish supermarket Mercadona signed up for S/4 in the quarter, the supplier confirmed.

SAP chief executive officer Bill McDermott said in a statement: “This strong quarter is the latest in SAP’s eight-year run of consistent, profitable growth. Our winning strategy is again validated by fast adoption of S/4 Hana and our full portfolio of cloud solutions. We expect continuing momentum in the second half and confidently raise our guidance for the full year.”

Luka Mucic, the supplier’s CFO, added: “Our fantastic momentum continued with double-digit growth in total revenue. Our cloud and software revenue growth rate in the first half of the year was at the upper end of our full-year guidance range. Based on our strong growth and cash generation we are pleased to share SAP’s success with our shareholders by initiating a share buyback of up to €500m in the second half.”

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SAP’s earnings statement mentioned its artificial intelligence-oriented toolset Leonardo, and cited Citic Pacific Mining, a Chinese-owned Australian iron ore mining company, as a notable early adopter.

In the Europe, Middle East and Africa region, total revenue was reported to be €4.7bn, in the Americas €4.6bn, and in Asia-Pacific and Japan €1.8bn.

Cloud subscriptions and support divided up were €249m, €577 and €106m in EMEA, the Amercias, and Asia-Pacific and Japan respectively: 27%, 62%, and 11%.

The Germany-headquartered supplier cited an “especially strong quarter in Germany and Russia”. Germany contributed €781m, or 32% of the region’s total. SAP also had double-digit software revenue growth in Germany and the Middle East and North Africa, as well as triple-digit software revenue growth in Russia.

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