SAP SE (SAP) Reports Y/Y Increase In Q1 Earnings, Ups View
Zacks Investment Research | Apr 23, 2018 10:54PM ET
SAP SE (DE:SAPG) (NYSE:SAP) reported first-quarter 2018 IFRS earnings per share of €0.59 (71 cents), reflecting a surge of 37% on a year-over-year basis. The year-over-year improvement was primarily attributable to a notable increase in operating profit. However, the bottom line fell short of the Zacks Consensus Estimate of 87 cents per share.
Total revenues, on IFRS basis, for the quarter were €5.26 billion ($6.42 billion), almost flat year over year and also missed the Zacks Consensus Estimate of $6.51 billion. A flourishing cloud business, along with strong growth of support revenues, aided top-line growth during the quarter.
New cloud bookings — a key indicator of sales success in cloud business — were up an impressive 25% (at constant currency) to €245 million in the reported quarter. The company's customer experience solutions witnessed triple digit year-over-year growth in new cloud bookings. During the quarter, Jaguar Land Rover, Coca-Cola, and Unilever (LON:ULVR) were added to SAP's customer experience solutions client base.
Inside the Headlines
Cloud and Software business, which includes Cloud Subscriptions & Support and Software licenses & support, reported first-quarter revenues of €4.35 billion, up 0.5% year over year.
Cloud Subscriptions & Support garnered revenues of €1.07 billion in the quarter, up 18% year over year. On the other hand, Software licenses & support reported revenues of €3.28 billion, down 4% on a year-over-year basis.
The EMEA region observed phenomenal growth in Cloud subscriptions and support revenues, particularly in Germany. SAP also witnessed double-digit software revenue growth in the United Kingdom.
In the APJ region, SAP witnessed strong performance of cloud and software revenues and cloud subscriptions, led by robust performance in Japan, China. Australia, China and India, which recorded double-digit growth in software revenues.
The company reported IFRS operating profit of €1.03 billion, up 52% on a year-over-year basis. Operating margin of 23.6% increased 800 basis points (bps) increase from the year-ago quarter.
The impressive profit and resultant margin was attributed to the positive impact of the adoption of IFRS 15 in 2018.
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