TMCnet News
SAP Sees Good Cloud Growth, But Euro Concerns Loom Executive Editor, TMC German software giant SAP (News - Alert) says it's seeing fast growth in its cloud business and solid performance in its core business. But reports indicate that SAP, which reported $3.7 billion in revenues for the first quarter, missed consensus estimates, which were at $3.82 billion. The company reportedly pointed to the strong Euro and its move to subscription-based services as key factors in that outcome, adding that its software and software-related service revenues would fall 6 percentage points this quarter if exchange rates remain at March levels. At last look, SAP's stock was trading on the NYSE at $80, down 1.72 percent. The good news is that SAP in the first quarter saw a slightly increased operating margin, which was up 7 percent on a non-IFRS constant currency basis, and strong operating cash flow, which increased by 9 percent. The company's non-IFRS cloud subscriptions and support revenue for the quarter increased 38 percent at constant currencies (32 percent at actual currencies). Its non-IFRS software and support revenue increased at 7 percent constant and 2 percent actual currencies. And its non-IFRS software and related service revenue grew 9 percent and 4 percent, which puts SAP ahead of its annual outlook growth range. SAP's customer engagement platforms and SAP Cloud for Sales are seeing triple-digital growth in software and cloud subscriptions and support revenue. SAP's annual cloud revenue run rate is approaching $1.5 billion. And, the company says it offers the most comprehensive HR cloud solution on the market. SAP HANA, which launched in June 2011, saw strong adoption in the first quarter, with more than 3,200 customers. Meanwhile, more than 1,200 startups in 57 countries are building SAP HANA applications; in fact, 60 of them already have commercially available offerings on that front. And SAP has joined forces with consulting giant Accenture (News - Alert) to establish a business solutions group through which the companies will jointly develop industry-specific, cloud-base solutions powered by SAP HANA. Edited by Maurice Nagle |