SAP SE (SAP) Q2 Earnings Fall Y/Y, Revenues Miss, View Up
Zacks Investment Research | Jul 19, 2017 10:36PM ET
SAP SE (DE:SAPG) (NYSE:SAP) reported second-quarter 2017 IFRS earnings per share of €0.56 (62 cents), which reflects a decline of 17.7% on a year-over-year basis. An increase in the share-based compensation expenses and restructuring related expenses proved to be a drag on the bottom line.
Total IFRS revenues for the first quarter were €5,782 million ($6,358.1 million), up 10% year over year. However, the figure fell short of the Zacks Consensus Estimate of $6,175 million. Robust performance of both the company’s segments, namely, Cloud and Software and Services, drove top-line growth.
Also, new cloud bookings – a key indicator of sales success in cloud business – were significantly up 33% to €340 million ($373.9 million) in the reported quarter.
Inside the Headlines
Cloud and Software business, which includes Cloud Subscriptions & Support, and Software licenses & support, reported revenues of €4,757 million ($5,230.9 million), up 9% year over year. Individually, Cloud Subscriptions & Support garnered revenues of €932 million ($1024.9 million) in the quarter, up 29% year over year. Software licenses and support reported revenues of €3,826 million ($4,207.2 million), up 5% on a year-over-year basis.
In addition, for the reported quarter, Services revenues rose 17% year over year to €1,024 million ($1,126.0 million). Overall, IFRS Cloud and software revenues witnessed the highest increase in APJ (up 52%), followed by EMEA region (up 48%) and the Americas (up 20%). This was mainly driven by IFRS Cloud Subscriptions & Support strength.
In the EMEA region, Cloud subscriptions and support revenue growth was driven by strong performance of Germany and Russia. Also, stellar growth in software revenue in Germany and MENA (Middle East and North Africa) proved conducive to overall performance in the EMEA region.
For the Americas, impressive software revenue growth in Canada, Mexico and Chile acted as tailwinds. For the APJ region, impressive cloud subscriptions and software revenue growth in China, along with that in Japan and Australia, acted as catalysts.
SAP reported IFRS operating margin of 16.0%, down 820 basis points from the figure recorded a year ago. Additionally, the company recorded an almost 27% drop in its operating profit, which came in at €926 million ($1,018.3 million).
SAP SE Price, Consensus and EPS Surprise
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