SAP, the world’s largest ERP systems vendor and 12th largest technology company, said late on Wednesday that its outlook for the full year would be strong.
The company bounced back from the COVID-19 slowdown with revenue and operating profit edging up.
“Our quick response to the crisis on the cost side drove strong operating profit and margin expansion,” Chief Financial Officer Luka Mucic said in a statement.
SAP said it will continue to invest in innovation to emerge from the COVID-19 crisis even stronger.
Europe’s most valuable technology company confirmed its 2020 outlook for an operating profit, adjusted for special items, in a range of 8.1 billion-8.7 billion euros, a fall of 1 per cent-6 per cent at constant currencies.
Total revenue grew 2 per cent year-on-year to €6.74 billion (IFRS), up 1 per cent to €6.74 billion (non-IFRS) and up 1 per cent (non-IFRS at constant currencies).
Software licenses revenue, while still below normal levels, recovered more than expected., the company said in a statement. In particular, the APJ region had a strong recovery in software licenses revenue.
Cloud revenue in the second quarter was impacted by lower pay-as-you-go transactional revenue as a result of the COVID-19 crisis. Current cloud backlog remained strong with continued high demand for digital supply chain, e-commerce, cloud platform and Qualtrics solutions.
In the second quarter, cloud revenue grew 21 per cent year-on-year to €2.04 billion (IFRS), up 19 per cent to €2.04 billion (non-IFRS) and up 18 per cent (non-IFRS at constant currencies).
Current cloud backlog is expected to be up 20 per cent to €6.65 billion (up 21 per cent at constant currencies).
Software licenses revenue was down 18 per cent year-on-year to €0.77 billion (IFRS and non-IFRS) and down 18 per cent (non-IFRS at constant currencies), a strong sequential improvement compared with the first quarter. Cloud and software revenue grew 4 per cent year-on-year to €5.71 billion (IFRS), up 3 per cent to €5.71 billion (non-IFRS) and up 3 per cent (non-IFRS at constant currencies).
Shares in SAP jumped 7 per cent on Thursday to the top of Germany’s blue-chip index.