SAP Releases Q1 Preliminary Results, Showing IT Spending Growth After Covid-19 Disruption
After review of its first-quarter 2021 performance, SAP SE announced its preliminary results, showing exceptional IT spending growth. As we know, Covid-19 caused disruption amongst businesses around the world, SAP included. Not only was IT spending lower, but lack of in-person events led to approximately $42 million in lost revenue. 2021 on the other hand, has started off with a positive outlook.
SAP experienced the highest growth across cloud and software in five years. The company experienced a 7% rise in cloud revenue, reaching $2.57 billion (€2.15 billion) by the end of the first quarter on March 31, 2021. Cloud backlog is also up 19% at constant currencies, reaching $9.1 billion (€7.63 billion).
Highlighting 'Rise with SAP', Christian Klein, CEO of SAP says it has been one of the greatest successes for the company this year. “We are seeing very strong growth across all our applications. And we are just getting started. Our new offering ‘RISE with SAP’ is rapidly becoming a massive accelerator to our customers’ business transformations with our platform at the center." he says.
Here are the other results SAP announced:
IFRS Cloud Revenue Up 7%; Non-IFRS Cloud Revenue Up 13% At Constant Currencies
IFRS Software Licenses Revenue Up 7%; Non-IFRS Software Licenses Revenue Up 11% At Constant Currencies, Fastest Growth in Five Years
IFRS Cloud & Software Revenue Up 1%; Non-IFRS Cloud & Software Revenue Up 6% At Constant Currencies
IFRS Operating Profit Down 21%; Non-IFRS Operating Profit Sharply Up 24% At Constant Currencies
IFRS Operating Margin Down 3.4pp; Non-IFRS Operating Margin Up 4.9pp At Constant Currencies
IFRS EPS Up 29%; Non-IFRS EPS Up 63%
Raises Full-Year Outlook
As for the rest of 2021, SAP predicts that cloud revenue growth will accelerate once again. Software license revenue is expected to continually decline with the growth of 'Rise with SAP'.
They also predict:
$11.0 - 11.4 billion (€9.2 – 9.5 billion) non-IFRS cloud revenue, up 14%-18% at constant currencies.
$28.0 - 28.5 billion (€23.4 – 23.8 billion) non-IFRS cloud and software revenue, up 1% to 2% at constant currencies.
$9.3 - 9.8 billion (€7.8 – 8.2 billion) non-IFRS operating profit, down 1% to 6% at constant currencies.
The share of more predictable revenue (defined as the total of cloud revenue and software support revenue) to reach approximately 75%.
View the full report on www.sap.com
(SAP’s first quarter 2021 quarterly statement will be published on April 22, 2021 and will be available for download at www.sap.com/investor.)