SAP Reports 34 Percent Cloud Sales Growth In Q1, Continued S/4HANA Momentum


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SAP's momentum in its cloud software sales continued into the first quarter of 2017 with the company reporting 49 percent growth in new cloud bookings and 34 percent growth in cloud revenue, the company said Tuesday.

SAP reported that total revenue in the first quarter ended March 31 was 5.29 billion Euro (U.S. $5.76 billion), up 12 percent from 4.73 billion Euro (U.S. $5.15 billion) in last year's first quarter.

Despite the double-digit revenue growth, a report on the Seeking Alpha website said revenue was 230 million Euro (U.S. $250.5 million) less than financial analysts' consensus expectations.

[Related: SAP Readies Apple iOS SDK For Release, Anticipates Wave Of Innovation From Channel Partners]

While new cloud service bookings were up 49 percent in the quarter, cloud subscription and support revenue in the first quarter was 905 million Euro (U.S. $985.5 million), up 34 percent from 677 million Euro (U.S. $737.2 million) one year ago.

Software licenses and support revenue grew 8 percent in the first quarter to 3.42 billion Euro (U.S. $3.73 billion) from 3.17 billion Euro (U.S. $3.45 billion) one year earlier. Cloud and software revenue combined was 4.33 billion Euro (U.S. $4.71 billion), up 12 percent from 3.85 billion Euro (U.S. $4.19 billion) one year ago

"The facts show that we are executing our winning strategy at scale," said CEO Bill McDermott in a call with financial analysts. "Our customers are endorsing the unique breadth and depth of SAP core cloud networks and all come with soaring adoption for our new innovation on a global basis. We believe SAP is the only company in the business software industry to deliver soaring cloud growth and double-digit license growth."

SAP, based in Waldorf, Germany, also reported continued sales momentum for SAP S/4HANA, the company's flagship line of business applications, in the quarter. The company added 400 customers for the software suite, about half of which are net new SAP customers, bringing the S/4HANA customer base to 5,800

SAP's profitability took a hit in the quarter, however. Operating profit of 673 million Euro (U.S. $733.2 million) marked a 17 percent decline from the same quarter one year earlier. Profit after tax, 530 million Euro (U.S. $577.5 million), was down 7 percent year over year from 570 million Euro (U.S. $621.1 million) one year ago.

Earnings per share were 0.43 Euro, down 9 percent from 0.48 Euro in last year's first quarter and missing analysts' expectations by 0.05 Euro.

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