OREANDA-NEWS. After an initial review of its third quarter 2015 performance, SAP SE (NYSE: SAP) today announced its preliminary financial results for the third quarter and nine months ended September 30, 2015.

SAP again delivered strong growth in the cloud, outpacing most pure cloud competitors even without the contribution from the Concur acquisition. Third quarter non-IFRS cloud subscriptions and support revenue grew 116% year-over-year (90% at constant currencies) to €600 million. New cloud bookings, the key measure for SAP’s sales success in the cloud, increased 102% in the third quarter to €216 million.

The Company had very strong top and bottom line growth. Non-IFRS cloud and software revenue increased 19% (12% at constant currencies) to €4.12 billion. Non-IFRS operating profit increased 19% (15% at constant currencies) to €1.62 billion. Non-IFRS basic earnings per share was €0.98 (2014: €0.84), an increase of 16%.

“SAP is uniquely positioned to help our customers become digital businesses. Our flagship S/4HANA is rapidly gaining market share. HANA is redefining the database industry as the standard real-time platform. Our cloud solutions for workforce engagement are best in class and our omni-channel customer experience solutions are growing faster than best of breed competitors. Our HANA Cloud Platform for the Internet of Things and Business Networks for inter-enterprise collaboration are redefining the business software industry. We are firmly reiterating our full year guidance”, said SAP CEO Bill McDermott.

SAP CFO Luka Mucic said: “Our strong double-digit growth in cloud and software revenue was mainly driven by excellent results in mature markets. SAP’s global resilience helped us also sail through stormy waters in emerging markets where we expect to continue to see volatility and economic challenges. Our surge in operating profit reflects our business transformation’s continued success and the improving profitability of our cloud offerings.”

FINANCIAL RESULTS IN THE THIRD QUARTER 2015

All 2015 figures in this release are approximate due to the preliminary nature of the announcement.

  Third Quarter 20151)
  IFRS Non-IFRS2)
€ billion, unless otherwise stated Q3 2015 Q3 2014 % change Q3 2015 Q3 2014 % change % change const. curr.
               
Cloud subscriptions and support 0.60 0.28 116% 0.60 0.28 116% 90%
    Software licenses 1.01 0.95 7% 1.02 0.95 7% 4%
    Software support 2.51 2.23 12% 2.51 2.23 12% 6%
Software licenses and support 3.52 3.18 11% 3.52 3.18 11% 6%
Cloud and software 4.12 3.46 19% 4.12 3.46 19% 12%
Total revenue 4.98 4.25 17% 4.99 4.26 17% 10%
Operating profit 1.21 1.16 5% 1.62 1.36 19% 15%
Operating margin (in %) 24.3 27.2 –2.9pp 32.4 31.8 0.6pp 1.3pp
Basic earnings per share (€) 0.75 0.74 2% 0.98 0.84 16%  

1) All figures are unaudited.
2) For a detailed description of SAP’s non-IFRS measures see Explanation of Non-IFRS Measures online.

IFRS cloud subscriptions and support revenue was €0.60 billion (2014: €0.28 billion), an increase of 116%. Non-IFRS cloud subscriptions and support revenue was €0.60 billion (2014: €0.28 billion), an increase of 116% (90% at constant currencies). IFRS software licenses revenue was €1.01 billion (2014: €0.95 billion), an increase of 7%. Non-IFRS software licenses revenue was €1.02 billion (2014: €0.95 billion), an increase of 7% (a increase of 4% at constant currencies). IFRS software licenses and support revenue was €3.52 billion (2014: €3.18 billion), an increase of 11%. Non-IFRS software licenses and support revenue was €3.52 billion (2014: €3.18 billion), an increase of 11% (6% at constant currencies). IFRS cloud and software revenue was €4.12 billion (2014: €3.46 billion), an increase of 19%. Non-IFRS cloud and software revenue was €4.12 billion (2014: €3.46 billion), an increase of 19% (12% at constant currencies). IFRS total revenue was €4.98 billion (2014: €4.25 billion), an increase of 17%. Non-IFRS total revenue was €4.99 billion (2014: €4.26 billion), an increase of 17% (10% at constant currencies).

IFRS operating profit was €1.21 billion (2014: €1.16 billion), a increase of 5%. Non-IFRS operating profit was €1.62 billion (2014: €1.36 billion), an increase of 19% (an increase of 15% at constant currencies). IFRS operating margin was 24.3% (2014: 27.2%), a decrease of 2.9 percentage points. Non-IFRS operating margin was 32.4% (2014: 31.8%), a increase of 0.6 percentage points (1.3 percentage points at constant currencies).

FINANCIAL RESULTS IN THE FIRST NINE MONTHS 2015

  Nine Months 20151)
  IFRS Non-IFRS2)
€ billion, unless otherwise stated 9M 2015 9M 2014 % change 9M 2015 9M 2014 % change % change const. curr.
               
Cloud subscriptions and support 1.65 0.74 124% 1.66 0.74 124% 92%
    Software licenses 2.69 2.53 6% 2.69 2.53 6% –1%
    Software support 7.49 6.49 16% 7.49 6.49 15% 7%
Software licenses and support 10.18 9.02 13% 10.18 9.02 13% 4%
Cloud and software 11.84 9.76 21% 11.85 9.76 21% 11%
Total revenue 14.45 12.10 19% 14.46 12.11 19% 9%
Operating profit 2.55 2.58 –1% 4.07 3.51 16% 5%
Operating margin (in %) 17.7 21.3 –3.6pp 28.1 29.0 –0.9pp –1.0pp
Basic earnings per share (€) 1.49 1.65 –10% 2.37 2.19 8%  

1) All figures are unaudited.
2) For a detailed description of SAP’s non-IFRS measures see Explanation of Non-IFRS Measures online.

IFRS cloud subscriptions and support revenue was €1.65 billion (2014: €0.74 billion), an increase of 124%. Non-IFRS cloud subscriptions and support revenue was €1.66 billion (2014: €0.74 billion), an increase of 124% (92% at constant currencies). IFRS software licenses revenue was €2.69 billion (2014: €2.53 billion), an increase of 6%. Non-IFRS software licenses revenue was €2.69 billion (2014: €2.53 billion), an increase of 6% (a decrease of 1% at constant currencies). IFRS software licenses and support revenue was €10.18 billion (2014: €9.02 billion), an increase of 13%. Non-IFRS software licenses and support revenue was €10.18 billion (2014: €9.02 billion), an increase of 13% (4% at constant currencies). IFRS cloud and software revenue was €11.84 billion (2014: €9.76 billion), an increase of 21%. Non-IFRS cloud and software revenue was €11.85 billion (2014: €9.76 billion), an increase of 21% (11% at constant currencies). IFRS total revenue was €14.45 billion (2014: €12.10 billion), an increase of 19%. Non-IFRS total revenue was €14.46 billion (2014: €12.11 billion), an increase of 19% (9% at constant currencies).

IFRS operating profit was €2.55 billion (2014: €2.58 billion), a decrease of 1%. Non-IFRS operating profit was €4.07 billion (2014: €3.51 billion), an increase of 16% (a increase of 5% at constant currencies). IFRS operating margin was 17.7% (2014: 21.3%), a decrease of 3.6 percentage points. Non-IFRS operating margin was 28.1% (2014: 29.0%), a decrease of 0.9 percentage points (1.0 percentage points at constant currencies).

BUSINESS OUTLOOK 2015

The Company reiterates the following 2015 outlook:

  • Based on the strong momentum in SAP’s cloud business the Company expects full-year 2015 non-IFRS cloud subscriptions and support revenue to be in a range of €1.95 – €2.05 billion at constant currencies (2014: €1.10 billion). The upper end of this range represents a growth rate of 86% at constant currencies. Concur and Fieldglass are expected to contribute approximately 50 percentage points to this growth.
  • The Company expects full year 2015 non-IFRS cloud and software revenue to increase by 8% – 10% at constant currencies (2014: €14.33 billion).
  • The Company expects full-year 2015 non-IFRS operating profit to be in a range of €5.6 billion – €5.9 billion at constant currencies (2014: €5.64 billion).

The company will report its complete third quarter and nine months 2015 results on October 20th.