Strong cloud growth and more than 500 new SAP S/4HANA customers have brought SAP record revenue and profits in Q2 2016.
“Our groundbreaking new architecture is accelerating momentum across all businesses – cloud, core and business networks. As a result, SAP delivered a unique trifecta of double digit growth in software, cloud and operating income. Our S/4HANA pipeline has never been stronger and we confidently reiterate our full year guidance,” said Bill McDermott, SAP CEO.
Second quarter IFRS cloud subscriptions and support revenue grew 30 per cent year to €720 million, while new cloud bookings were up 28 per cent year over year in Q2, reaching €255 million. Software and support revenue increased marginally by 4 per cent year over year, but with the strength of the cloud business, IFRS cloud and software revenue increased 7 per cent to €4.36 billion. IFRS operating profit was also up 81 per cent to €1.27 billion.
“We did what we said we would do – we delivered a strong Q2. I am proud how SAP is navigating ahead with extraordinary success across all business dimensions. Driven by our customer led innovation and our successful business transformation we outperformed the competition in top and bottom line growth,” said Luka Mucic, SAP CFO.
SAP pointed to S/4HANA as adding extra momentum to its performance, particularly as around 40 per cent of the S/4HANA deals signed in the quarter are new SAP customers. Among those choosing the new platform in Q2 were The Hershey Company (USA), the Targin Group (Russia), Cathay Pacific (Hong Kong), and Roy Hill Holdings (Australia). There are now more than 3700 customers of S/4HANA, according to the vendor.
SAP reported double-digit growth across its on-premise and cloud customer engagement and commerce (CEC) offering during Q2, while in the Business Networks area, encompassing Ariba, Fieldglass and Concur, cloud subscriptions and support revenue was up 21 per cent.
At the regional level, in APJ, cloud and software revenue was also up 7 per cent (IFRS), with cloud subscriptions and support revenue growing by 44 per cent (IFRS). China and India delivered double-digit software licence revenue growth, while Japan was a standout with almost triple-digit growth. These three countries also had double-digit cloud subscriptions and support.
In the EMEA region, cloud subscriptions and support revenue was up 38 per cent (IFRS), and overall cloud and software revenue was up 7 per cent. The strongest performing countries France, the Netherlands, Switzerland, Germany, Russia and Southern Europe. North America also had a sold second quarter, bringing its half year performance back on track, with the Americas cloud revenue up by 26 per cent (IFRS), increasing its total cloud and software revenue by 8 per cent (IFRS). While Latin America continues to be troubled by political and macroeconomic instability, SAP saw double-digit growth in software license revenue in Brazil and Mexico.
