© Reuters. FILE PHOTO: The logo of the German software company SAP is shown on May 12, 2016 at the headquarters in Walldorf. REUTERS / Ralph Orlowski / File Photo
By Supantha Mukherjee
STOCKHOLM (Reuters) – German enterprise software group SAP has raised its annual outlook for the third time after posting a strong third quarter result as more and more customers move their IT operations to the cloud.
SAP now expects cloud revenue to grow 16% to 19% for the full year, which will contribute to a 2 to 4% increase in total cloud and software revenue, it said in a statement late Tuesday.
Operating profit is expected to decline unchanged by 2% for the year, an improvement over the previous forecast from unchanged to 4%.
In January, SAP, moving from software licenses with upfront fees to subscription-based cloud services, launched Rise with SAP, an all-in-one package for digital transformation.
“We see a record acceptance of our applications and our platform,” said CEO Christian Klein in a statement. “This has greatly accelerated our cloud growth.”
SAP has raised its forecast for cloud and software revenue for the full year by 200 million euros to 23.8 to 24.2 billion euros.
The cloud backlog for the flagship S / 4HANA database increased 58% on a currency-neutral basis, and the current cloud backlog – a measure of business inbound – grew 22% in the third quarter.
Adjusted revenue rose 5% to EUR 6.68 billion ($ 7.70 billion) in the third quarter ended September 30, the company reported in a preliminary income statement. SAP is expected to release full results on October 21.
Adjusted earnings per share rose 2% to 1.74 euros, again supported by its profitable venture capital investments, Sapphire Ventures.
($ 1 = 0.8672 euros)
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