S/4HANA drives fast cloud growth in 2017 results: SAP

SAP 2017 results

Luka Mucic, SAP SE

With new cloud bookings up 31 per cent in Q4 and 30 per cent on the full year 2017 at constant currencies, SAP executives expressed pleasure at the company’s preliminary results for the quarter and full year, having met all outlook metrics despite multiple guidance raises during the course of the year. The results are seen as a favourable indicator for 2018.

For the full year, new cloud bookings reached €1.45 billion, with cloud and software revenue up 8 per cent to €19.55 billion (non-IFRS at constant currencies). Cloud subscriptions and support revenue was €3.83 billion (non-IFRS at constant currencies), while software revenue was up 2 per cent to €4.87 billion (non-IFRS at constant currencies). Total revenue was €23.77 billion (non-IFRS at constant currencies).

“We promised fast cloud growth – we delivered!” said Bill McDermott, CEO, SAP.

S/4HANA adoption grew to more than 7900 customers, up about 46 per cent year over year. In Q4 alone, about 1000 additional customers signed up for S/4HANA, more than 40 per cent net new.

“The record-setting adoption of S/4HANA has ignited the entire SAP cloud,” said McDermott.

In the APJ region, cloud and software revenue was up 11 per cent (non-IFRS at constant currencies) in Q4, comparing very favourably to the Americas at 6 per cent and EMEA at 4 per cent. Cloud subscriptions and support revenue in APJ increased by 49 per cent (non-IFRS at constant currencies), highlighted by strong performance in both China and Japan, surpassing the Americas at 16 per cent but trailing EMEA at 56 per cent. Australia and Singapore both experienced double-digit growth in software revenue during the quarter.

For 2018, SAP is expecting cloud subscriptions and support revenue to increase 27 – 33 per cent to €4.8 – €5.0 billion (non-IFRS at constant currencies). For non-IFRS cloud and software revenue, the company is expecting to achieve 6 – 8 per cent growth to €20.7- €21.1 billion at constant currencies.

Total non-IFRS revenue for 2018 is projected to be €24.6 – €25.1 billion at constant currencies, representing growth of 5 – 7 per cent at constant currencies. On the profit side, the company expects its non-IFRS operating profit to reach €7.3 – €7.5 billion at constant currencies — a growth rate of 8 – 11 per cent at constant currencies.

“As promised, we initiated the margin turnaround with a Q4 non-IFRS operating margin of 35.2 per cent at constant currencies. This paves the way for the strong growth and margin expansion we expect in 2018 and beyond,” said Luka Mucic, CFO, SAP.

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