SAP Announces Third Quarter and Nine Months 2015 Results

October 20, 2015 | WALLDORF, Germany – SAP SE (NYSE: SAP) today announced its financial results for the third quarter and nine months ended September 30, 2015.

• Strong Growth in New Cloud Bookings: Up 102%
• Non-IFRS Cloud and Software Revenue Up 19% to €4.12 Billion
• HANA Continues to Soar – SAP S/4HANA Customer Count Exceeds 1,300
• Non-IFRS Operating Profit Increased 19% to €1.62 Billion, Non-IFRS Earnings per Share Increased 16% to €0.98
• Reiterates Full Year 2015 Outlook

SAP again delivered strong growth in the cloud, outpacing most pure cloud competitors even without the contribution from the Concur acquisition. Third quarter non-IFRS cloud subscriptions and support revenue grew 116% year-over-year (90% at constant currencies) to €600 million.⁽¹⁾ New cloud bookings, the key measure for SAP’s sales success in the cloud, increased 102% in the third quarter to €216 million.⁽²⁾

The Company had very strong top and bottom line growth in the third quarter. Non-IFRS cloud and software revenue increased 19% (12% at constant currencies) to €4.12 billion. Non-IFRS operating profit increased 19% (15% at constant currencies) to €1.62 billion.

“SAP is enabling companies to Run Simple,” said SAP CEO Bill McDermott. “Whether it’s optimizing the customer experience, collaborating with partners across a digital network, engaging your workforce or managing your core operations with S/4HANA – we are helping our customers go digital. The HANA database and platform are the foundation for a ‘live system strategy’ enabling companies to capture the immense Internet of Things opportunity. This new architecture defeats complexity and radically increases speed so businesses can execute their mission in real-time. Our strong Q3 results are the latest validation of our strategy.”

“What I am particularly pleased about is that our operating profit grew even faster than our revenue. This reflects the positive impact of our business transformation and our continued focus on operating excellence across all of our lines of business, as shown in particular by an almost 9 percentage point year-over-year increase in our cloud gross margin,” said SAP CFO Luka Mucic. “In addition, we continued to increase our operating and free cash flow. In fact, we exceeded €3.2 billion for the first nine months in operating cash flow, while free cash flow marked an 8% increase year-over-year.”

BUSINESS HIGHLIGHTS IN THE THIRD QUARTER 2015

Continued Momentum in Human Capital Management and Customer Engagement and Commerce
Customers continue to turn to SAP to manage their global workforce, both permanent and flexible. SuccessFactors Employee Central, which is the core of our Human Capital Management offerings, is localized for 73 countries and the number of customers has increased 79% to more than 800 in just 12 months. SAP is increasingly winning against its key HCM competitors, especially in markets outside of the United States.

SAP saw excellent growth in its Customer Engagement and Commerce solutions. SAP helps businesses manage the shift from traditional CRM to real-time customer engagement where the lines between marketing, sales, service, and commerce are fading. SAP is unique in that it can help businesses connect the front-office and back-office in real-time and fulfill ecommerce in one end to end value chain. New cloud bookings for Customer Engagement and Commerce saw strong double-digit growth.

Exceptional SAP S/4HANA Traction 
Customer adoption of SAP HANA continues to surge on the back of high demand for our new digital core solution SAP S/4HANA. SAP S/4HANA’s robust early traction continues with more than 1,300 SAP S/4HANA customers by the end of the third quarter across all industries and regions. SAP S/4HANA enabled strong growth across our portfolio and allows customers to turn insight into action by seamlessly connecting their entire value chain in real time.

Strong Business Network Momentum – Triple Digit Growth, Concur Accelerates 
SAP is digitizing ecosystem collaborations with its Business Network solutions. Total revenue in the SAP Business Network segment was €412 million (€358 million at constant currencies) in the third quarter, a year-over-year increase of 159% (125% at constant currencies). Concur’s new business momentum has seen a significant increase since the acquisition with further acceleration of bookings in the third quarter 2015.

Approximately 1.9 million connected companies trade over $730 billion of commerce⁽³⁾ on the Ariba network, approximately 30 million end users process travel and expenses with Concur annually and customers are managing 1.7 million flexible workers with the Fieldglass platform annually.

Regional Performance
The EMEA region had an outstanding performance in the third quarter, with a 13% increase in non-IFRS cloud and software revenue. Non-IFRS cloud subscriptions and support revenue grew by 67% with high double-digit growth in new cloud bookings. Highlights in the region include strong software license performance in Germany and France.

The Americas region had strong double-digit growth, with non-IFRS cloud and software revenue rising 32%. Cloud subscriptions and support revenue in the region grew 139% with new cloud bookings growing by triple-digits. An improved performance in Latin America which stabilized amid macroeconomic challenges contributed to this growth.

In the APJ region, non-IFRS cloud subscriptions and support revenue grew 88%, driving non-IFRS cloud and software revenue up 8%. New cloud bookings grew by double-digits. In the APJ region SAP had strong growth in India and South Korea across cloud and software.