SAP Q2 Results Show Ongoing Growth Despite COVID-19 Pandemic
SAP (SE) released their final Q2 and Half-year statement today, showing mostly positive results and growth. The results as listed below can be seen in their PDF summaries.
Following the COVID-19 pandemic, software licenses revenue recovered more than expected, although still lower than usual, down 18% at €0.77 billion. Cloud revenue reached €2.04 billion (up 19% IFRS & non-IFRS), but ultimately was impacted by lower pay-as-you-go revenues. Operating cash flow was €3.77 billion, up 41% year-over-year and free cash flow was up 59% year-over-year at €3.12 billion. Earnings per share was at €0.73 (IFRS), up 54% and up 7% to €1.17 (non-IFRS) year-over-year.
Considering the effect the global pandemic has had on businesses, SAP is doing well in the market despite massive changes in other business operations and cashflow.
Here are the main results in focus, as stated in SAP's Quarterly report:
Strong Current Cloud Backlog of €6.65 Billion, Up 21% At Constant Currencies
IFRS Cloud Gross Margin Up 3.4pp; Non-IFRS Cloud Gross Margin Up 1.6pp
IFRS Operating Margin Up 6.6pp; Non-IFRS Operating Margin Up 1.8pp
IFRS EPS At €0.73, Up 54%; Non-IFRS EPS At €1.17, Up 7%
Operating Cash Flow Up 41%, Free Cash Flow Up 59% in First Six Months
As for SAP S/4HANA, there are now 14,600 customers. 500 new customers were added in Q2, meaning there was a 22% increase year-over-year.
More than 640 customers selected SAP SuccessFactors HXM solutions in Q2.
SAP Customer Experience (CX) almost doubled new cloud business year over year in Q2.
SAP Fieldglass added more than 760,000 new external workers during the second quarter.
Concur segment revenue was down 4% to €379 million year-over-year (down 5%).
In the second quarter, Qualtrics segment revenue was up 34% to €168 million year-over-year (up 32%) reaching 11,800 customers.
In the second quarter, Services segment revenue was down 6% to €796 million year-over-year (down 6%).
In the second half of the year, cloud revenue is expected to reach €8.3 billion - €8.7 billion for Non-IFRS cloud (It was €7.01 billion in 2019), while cloud and software revenue (Non-IFRS) is expected to be €23.4 - €24.0 billion (in 2019 it was €23.09 billion).
View the Quarterly Q2 Statement for the full list of results.
View the 2020 Half-Year Report to gain insight into SAP's investments, trends, profit, the IT market and more.
SAP is the market leader in enterprise application software, helping companies of all sizes and in all industries run at their best. Using machine learning, Internet of Things (IoT), and advanced analytics technologies SAP helps turn customers’ businesses into intelligent enterprises. Their end-to-end suite of applications and services enables more than 440,000 business and public customers to operate profitably, adapt continuously, and make a difference. For more information visit: www.SAP.com
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