SAP (SAP) Reports Upbeat Preliminary Q1 Results Driven by Cloud
Zacks Investment Research | Apr 14, 2021 04:08AM ET
SAP SE (DE:SAPG) SAP recently reported upbeat preliminary first-quarter 2021 results and raised its outlook for 2021. The company will release final first-quarter 2021 results in detail on Apr 22, 2021.
In the first quarter, SAP stated that it witnessed accelerating trends in its new cloud business along with strong uptake of the company’s new offering “RISE with SAP.” The company also cliched several deals for its Enterprise Resource Planning (ERP) and digital supply chain solutions.
However, movement restrictions across the globe owing to the coronavirus crisis continue to negatively impact Concur business revenues.
Further, lower spend on travel and virtualized events as well as reduction in facility-related costs accelerated margin expansion amid the challenging macro environment.
industry ’s rally of 50.2% in the past year.
h3 A Look at Preliminary Q1 Numbers/h3For the first quarter of 2021, on a non-IFRS basis, cloud revenues jumped 7% (up 13% at constant currency) to €2.15 billion. Current cloud backlog increased 15% (up 19% at cc) to €7.63 billion.
The company further noted that non-IFRS software licenses revenues of €0.48 billion, rose 7% (up 11% at cc) year over year.
On a non-IFRS basis, cloud and software business reported revenues of €5.43 billion, up 1% year over year (up 6% at cc).
SAP reported first quarter total revenues, on a non-IFRS basis, of €6.35 billion. The figure was down 3% year over year but increased 2% at constant currency.
SAP’s non-IFRS operating profit came in at €1.74 billion, representing 17% (up 24% at cc) year-over-year growth.
h3 2021 Outlook Revised Upwards/h3Driven by strength in its new cloud business and expectations of macroeconomic improvement owing to global vaccine rollout, SAP raised its 2021 outlook.
For 2021, SAP anticipates non-IFRS cloud revenues in the range of €9.2-€9.5 billion, up 14-18% at cc. The company earlier had projected cloud revenues in the range of €9.1-€9.5 billion on a non-IFRS basis, up 13-18% at cc.
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Non-IFRS cloud and software revenue is now projected between €23.4 billion and €23.8 billion, up 1-2% at cc. The company earlier had projected non-IFRS cloud and software revenues in the range of €23.3-23.8 billion, flat to up 2% at cc
However, non-IFRS operating profit at cc is expected in the range of €7.8-€8.2 billion, down 1- 6% at cc.
h3 Zacks Rank & Stocks to Consider/h3Currently, SAP carries a Zacks Rank #3 (Hold).
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