SAP has announced its cloud subscriptions and support hit €905 million (£768.7m) in the first quarter of 2017, up 34% from the previous year, with new cloud bookings up 49% to €215m.
It’s the continuation of a long-running theme for the German software giant, with the company trying to shift its revenue base over from traditional software to cloud for the past few years. Software licenses and support remains strong however, up to €3.42bn from €3.17bn this time last year at an 8% increase. Overall, cloud and software revenue was at €4.32bn and total revenue at €5.28bn, each up 12% from Q116.
Despite this, operating profit was down 17% year on year at €673m, while profit after tax was down 7% to €530m. SAP increased its employee base from 78,230 to 85,751 over the past 12 months.
Discussing the cloud figures, Luka Mucic, SAP chief financial officer said in a statement: “This outstanding achievement further validates our investment decisions to drive further growth. We’re off to a good start to reach our full year targets and we are confident that we will grow our profitability in 2018 and beyond.”
SAP reiterated its 2017 outlook, which argues full year 2017 non-IFRS cloud subscriptions and support revenue will be between €3.8bn and €4bn.
One of the areas SAP has been looking into of late is artificial intelligence, announcing in February the latest offering for S/4HANA, its public cloud, which aimed to provide a roadmap for the ‘next generation of cloud ERP’, as the company put it. S/4HANA was updated with a new architecture of in-memory in combination with contextual analytics, digital assistant capabilities and machine learning, aiming to help customers adopt and adjust business processes based on real-time data and insight.
Bill McDermott, SAP CEO, added: “SAP’s outstanding first quarter results are a decisive follow-on to our record setting 2016. Led by S/4HANA, we are seeing mass customer adoption of our solutions globally.
“Our inspired workforce is firmly committed to staying focused on the success of our customers and shareholders.”
You can read the full financial statement here (pdf).
Picture credit: SAP
