SAP drives continued cloud momentum with Q4 results

SAP building | SAP Q4

SAP has announced its Q4 and FY 2022 results, with figures suggesting continued results are coming from the cloud.

The full year saw total revenue up 11 percent to €30.8bn, five percent at constant currencies, and cloud revenue up 33 percent to €12.5bn, up 24 percent at constant currencies.

2022 saw S/4HANA cloud revenue up 91 percent to €2bn, up 79 percent at constant currencies, with an additional backlog rise of 84 percent to over €3.1bn, 82 percent at constant currencies. Q4 S/4HANA cloud revenue further consistently accelerated, up to 101 percent and up 90 percent at constant currencies.

At year end, current total cloud backlog exceeded €12bn for the year, up 27 percent and up 24 percent at constant currencies. The figure is stated to be €62m lower due SAP’s decision to wind down its business operations in Russia and Belarus.

IFRS cloud gross profit grew 38 percent for the year, while non-IFRS cloud gross profit rose 37 percent, up 28 percent at constant currencies.

Elsewhere, software licenses revenue fell 37 percent to €2bn, down 39 percent at constant currencies for 2022. Despite lower software licenses revenue, cloud and software revenue rose ten percent to €26.5bn and up four percent at constant currencies. Services revenue was up 16 percent to €4.3bn and up nine percent at constant currencies.

IFRS operating profit stayed flat at €4.6bn, and non-IFRS operating profit was down two percent to €8bn decreasing seven percent at constant currencies for the year. In the fourth quarter, IFRS operating profit was up 17 percent and non-IFRS operating profit rose five percent, up two percent at constant currencies.

For 2022, IFRS earnings per share decreased 56 percent to €1.96 and non-IFRS earnings per share decreased 39 percent to €4.08. In Q4, IFRS earnings per share decreased 62 percent to €0.47 and non-IFRS earnings per share decreased 46 percent to €1.00. The decline is said to reflect a contribution to financial income by Sapphire Ventures that, mainly due to market conditions, was significantly lower than in the same period last year.

Looking ahead, SAP’s 2023 outlook anticipates accelerating top line and double-digit non-IFRS operating profit growth with targeted restructuring in the coming year reflecting a focus on strategic growth areas and accelerated cloud transformation.

SAP has also decided the explore a sale of its stake in Qualtrics, a global enterprise specializing in building technology to close experience gaps.

Christian Klein, CEO, SAP, said: “SAP is more resilient than ever. We end 2022 with continued strong cloud momentum and a return to operating profit growth in the fourth quarter, marking an important inflection point. Heading into 2023, this gives us great confidence in delivering on our promise of accelerating top line and double-digit non-IFRS operating profit growth. As we enter the next chapter of SAP, I want to thank Luka for his great partnership on this journey.”

Luka Mucic, CFO, SAP, said: “In my 37th and final earnings for SAP, I am proud that the SAP team is announcing excellent results and continued cloud momentum. We are on track to deliver our growth and profitability commitments for 2023. I am extremely confident in the continued success of SAP’s most exciting transformation in its history. Thank you to the wonderful SAP family that I have been part of for 27 years.”