SAP raises full year outlook to keep pace with accelerating cloud momentum

After an initial review of its third quarter 2021 performance, SAP has announced its preliminary financial results for the third quarter ended September 30, 2021. All figures are approximate due to the preliminary nature of the announcement.

Cloud momentum has accelerated in the third quarter, with cloud revenue increasing by 20 percent to €2.39bn, current cloud backlog up 24 percent to €8.17bn and SAP S/4HANA current cloud backlog up 60 percent to €1.28bn. S/4HANA cloud revenue growth accelerated as anticipated, up 46 percent to €276m, while non-IFRS operating profit is also up by 2 percent.

Services revenue dipped 6 percent year on year to €0.93bn, with SAP attributing this decline primarily to the November 2020 divestiture of SAP Digital Interconnect. Total revenue grew by 5 percent year on year at €6.84bn.

In light of its strong business performance, which is expected to continue to accelerate cloud revenue growth, SAP is now raising its full-year 2021 outlook. The company continues to expect a software licenses revenue decline for the full year as more customers turn to the ‘RISE with SAP’ subscription offering for their mission-critical core processes.

Christian Klein, CEO at SAP, said: “Our strategy is clearly working. Customers are choosing SAP for their business transformation in the cloud. We see record adoption of our applications and our platform. This has resulted in strong acceleration of our cloud growth.”

Luka Mucic, CFO at SAP, added: “This has been an excellent quarter across all key financial metrics. We are seeing sustained, strong progress in SAP’s transformation. Our cloud business is growing at an accelerating pace and has led to our improved full year outlook.”