- Operating Profit Up Double-Digit
- Raises 2018 Outlook and 2020 Ambition
- – Cloud Revenue Growth Accelerates, Up 30% (IFRS) and Up 40% (Non-IFRS at Constant Currencies), Outpacing Competition
- – New Cloud Bookings Up 29% at Constant Currencies on Top of a Strong Prior Year Quarter
- – Strong Digital Core Innovation Cycle – 600 S/4HANA Customers Added in Q2, S/4HANA Customer Count Now Close to 9,000
- – Double-Digit Operating Profit Growth Continues, Up 13% (IFRS) and Up 12% (Non-IFRS at Constant Currencies)
SAP SE (NYSE: SAP) today announced its financial results for the second quarter ended June 30, 2018.
“The 4th generation of enterprise applications has taken another major step forward with C/4HANA. Together with S/4HANA, SAP customers are finally able to focus their entire business on delivering a personalized experience to their customers. The intelligent enterprise is the elixir to bridge silos inside fractured businesses and beyond so CEOs get a single view of the customer. SAP is presenting a clear strategy, customers are already validating it in Q2 and we are increasing guidance as a signal that a new wave of growth has been unleashed.” – Bill McDermott, CEO
“This quarter is exemplary for the road we have chosen: rapidly transforming the company to the cloud while substantially growing profits and margins. I am very confident that this momentum will continue to expand. That’s why we raised our 2018 outlook and 2020 ambition.” – Luka Mucic, CFO
- Business Highlights
- Financial Highlights
- Second Quarter 2018.
New cloud bookings1 grew 24% (29% at constant currencies) in the second quarter and reached €421 million. Cloud subscriptions and support revenue grew 30% year over year to €1.21 billion (IFRS), up 40% (non-IFRS at constant currencies).2 Software revenue was down 9% year over year to €996 million (IFRS), down 5% (non-IFRS at constant currencies). New cloud and software license order entry3 grew 12% at constant currencies year over year in the second quarter. Cloud and software revenue grew 4% year over year to €4.94 billion (IFRS), up 10% (non-IFRS at constant currencies). Total revenue grew 4% year over year to €6.00 billion (IFRS), up 10% (non-IFRS at constant currencies).
SAP’s rapidly expanding cloud business together with solid growth in support revenue continued to drive the share of more predictable revenue. The total of cloud subscriptions & support revenue and software support revenue as a percentage of total revenue grew 2 percentage points year-over-year to 66% in the second quarter.
Second quarter operating profit was up 13% year over year to €1.04 billion (IFRS), up 12% (non-IFRS at constant currencies). As announced in January 2018, the Company expects a positive revenue and profit impact from the adoption of IFRS 15 in 2018. In the second quarter, this positive impact on SAP’s operating profit was around €54 million. Earnings per share increased 8% to €0.60 (IFRS) and increased 5% to €0.98 (non-IFRS).
Operating cash flow for the first six months was €2.99 billion, down 15% year over year. The decrease in operating cash flow was mainly due to timing of stock based compensation payments, currency headwinds as well as higher tax and insurance payments. Free cash flow decreased 25% year over year to €2.17 billion. Free cash flow was also lower due to the previously announced additional CapEx for 2018. At the end of the second quarter, net liquidity was -€2.97 billion.