SAP cloud offerings, most especially the Business Transformation as a Service (BTaaS) offering RISE with SAP, propelled the German software giant’s preliminary 2021 quarter four and full-year business results.
Coming from a high-performing third quarter underpinned by a strong cloud business, SAP has shared another solid fourth-quarter preliminary financial results contributing to a promising 2021 yearend performance. SAP solutions and services that support mission-critical processes have been embraced by enterprises worldwide not only for business continuity but for them to accelerate business transformation amidst the continued disruption of the COVID-19 pandemic.
Explaining about SAP’s cloud strategy, CEO Christian Klein stated:
“The magnitude of our cloud strength is evident. More and more companies are choosing SAP to help them transform their businesses, build resilient supply chains and become sustainable enterprises as they move to the cloud. This momentum is reflected in the tremendous success of “RISE with SAP”, our signature cloud offering, as well as excellent growth across our entire portfolio. Our growth acceleration points to even greater potential ahead.”
SAP welcomed the year with the unveiling of RISE with SAP designed to help businesses transform holistically into intelligent enterprises with a fast time to value and in the way that best suits them. Apart from garnering a strong uptake from enterprises from various industries like New Zealand’s Zespri, the UK’s Inchcape plc, NBA, and Energizer, the subscription-based offering gained support from SAP long-term business partners including Blackline, Dell Technologies, EY, Google Cloud, and IBM and developed solutions to complement RISE with SAP.
2021 Preliminary Financials Propelled by SAP Cloud Offerings
SAP stated that all 2021 figures released are preliminary data based on the initial review of the company’s fourth-quarter and full-year ended December 31, 2021 business performance. Below are the highlights of the release:
Q4 Performance
- 28% increase in cloud revenue to €2.61 billion and 24% increase at constant currencies
- 32% growth in current cloud backlog–which accelerated faster than forecast– to €9.45 billion and 26% increase at constant currencies
- 65% growth in SAP S/4HANA cloud revenue to €329 million and 61% increase at constant currencies
- 84% increase in SAP S/4HANA current cloud backlog to €1.71 billion and 76% increase at constant currencies
- 6% growth in cloud and software revenue to €6.99 billion and 3% increase at constant currencies
Full-Year Results
- 17% increase in IFRS cloud revenue and 16% increase in non-IFRS cloud revenue to €9.42 billion (up 19% to €9.59 billion at constant currencies)
- 46% SAP S/4HANA cloud revenue to €1.09 billion and 47% increase at constant currencies, which exceeded its €1 billion cloud revenue target
- 4% increase in cloud and software revenue versus last year to €24.08 billion and 5% growth to €24.41 billion at constant currencies, which surpassed the revised full-year outlook
The report also stated that the Qualtrics IPO in February and SAP’s increasing share price have affected the company’s IFRS operating profit and operating margin this year.
Sharing about a stellar last quarter performance and business outlook, SAP CFO Luka Mucic commented:
“ I am proud that our team has delivered an exceptional year with strong results, far exceeding our expectations. After three quarters of home runs with our cloud momentum, we hit it out of the park this quarter. We are confident that we will continue our Q4 current cloud backlog growth in 2022. This is reflected in our accelerated cloud guidance for 2022 as we make great progress towards our mid-term ambition.”
Based on 2021’s preliminary financial performance, specifically on hitting the high end of the revised 2021 cloud revenue outlook range, the multinational tech company is forecasting continued business growth in 2022 driven by SAP cloud offerings.
