SAP Q3 results light up the cloud sky

SAP Q3 results have been announced for this year, with a cloud revenue boost expected to continue accelerating through 2023. Total revenue is up 15 percent, with the cloud revenue increasing by 38 percent and 25 percent at constant currency.

This quarter sees a significant jump in international financial reporting standards (IFRS) cloud gross profit, with a rise to 44 percent, while non-IFRS cloud gross profit increases to 42 percent and 30 percent at constant currencies. In addition, the current cloud backlog, which marks the contractually committed cloud revenue expected over the next year, is up by 38 percent and 26 percent at constant currencies. Specifically, the SAP S/4HANA revenue enjoyed a jump of 98 percent, with a backlog up 108 percent, and 90 percent at constant currencies.

Meanwhile, the IFRS operating profit is down one percent, non-IFRS operating profit is flat and down eight percent at constant currencies, representing a significant improvement from the Q2 results.

Christian Klein, SAP CEO, said: “Our cloud solutions are the answer, as customers turn to us to help them future-proof their businesses. This trust in SAP is reflected in our accelerating cloud momentum. With a recurring revenue share of more than 80 percent, it’s clear that our transformation has reached an important inflection point, paving the way for continued growth in the future.”

SAP CFO, Luka Mucic, said: “We have delivered a strong cloud quarter with accelerating momentum across all key cloud indicators. We’re at an important inflection point in our transformation which we anticipate will lead to accelerating revenue growth and double-digit operating profit growth in 2023.”