Despite slower than anticipated growth in the first quarter of 2016, SAP SE has reiterated its outlook for the year, citing a robust pipeline and increasing momentum as evidence of its continued strength.
In the preliminary results for the first quarter, non-IFRS cloud and software revenue increased 5 per cent to €3.85 billion, while cloud revenue is up 33 per cent. IFRS earnings per share is up 37 per cent, while non-IFRS earnings per share up 9 per cent.
Luka Mucic, CFO, SAP, said “While EMEA and APJ showed solid execution, the Americas got off to a slower start. We successfully transformed our business in 2015, contributing to the strong rise in earnings per share. With a robust pipeline across our entire portfolio we are on track to achieve our full year outlook.”
In the Americas, continuing political and macroeconomic instability in Latin America, particularly in Brazil, were a drag on first quarter performance, and North America had a slower start to the year, following a strong fourth quarter in 2015.
SAP’s momentum with S/4HANA continued with the company adding more than 500 customers in the quarter, of which 30 per cent were net new SAP customers.
“SAP’s fundamental growth drivers are rock solid – from our best-in-class S/4HANA applications to our completeness of vision in the cloud,” said Bill McDermott, CEO, SAP. “We expect increasing momentum as the year progresses, fully consistent with our guidance for the full year. SAP continues to be a highly profitable growth company.”
SAP SE now expects full year 2016 non-IFRS cloud subscriptions and support revenue to be in the range of €2.95 – 3.05 billion (compared with €2.3 billion in 2015). The company expects full year 2016 non-IFRS cloud and software revenue to increase by 6-8 per cent at constant currencies.
