SAP announces strong sales and earnings in advance. The transition to the cloud continues.
late thursday pre-announced better-than-expected fourth quarter financial results, as well as strong initial guidance for 2022. The German enterprise application software giant has moved more of its business to the cloud, and the latest results show that the company is making considerable progress.
For the quarter, SAP (ticker: SAP) reported revenue of €7.98 billion, up 6% from a year ago, or 3% after adjusting for exchange rates , ahead of the Street consensus forecast of 7.71 billion euros. Cloud revenue was €2.61 billion, up 28%, or 24% at constant exchange rates. Software licensing revenue was €1.46 billion, down 14% or 17% constant currency as the company continues to move customers to cloud versions of its software. Earnings on an adjusted basis came in at 1.86 euros per share, well above the Street consensus of 1.63 euros.
The company hit the top of its previous guidance ranges for the full year on most metrics. On an adjusted basis, constant currency cloud revenue was $9.59 billion for the year, at the upper end of the company’s forecast. Global sales amounted to 27.84 billion euros, up 2%, or 3% at constant exchange rates.
SAP said its current cloud backlog accelerated faster than expected during the quarter, rising 32% to 9.45 billion euros. For S/4 HANA, the cloud-based version of the company’s flagship enterprise resource planning software, backlog grew 84% to €1.71 billion.
“The magnitude of the strength of our cloud is evident,” SAP CEO Christian Klein said in a statement. “More companies are choosing SAP to help them transform their businesses, build resilient supply chains, and become sustainable businesses as they migrate to the cloud…Our accelerating growth indicates even greater potential.”
For 2022, the company forecasts cloud revenue of 11.55 billion to 11.85 billion, up 23% to 26% in constant currency, with combined cloud and software revenue of 25 billion to 25 .5 billion euros, up from 4% to 6%. The company expects adjusted operating profit of 7.8 billion to 8.25 billion euros, stable at a decline of 5%.
SAP also announced a new €1 billion share buyback program, with the shares to be used for the company’s equity compensation plan.
By late trading, SAP’s U.S.-listed CDTs were up 2% at $138.50.
Write to Eric J. Savitz at [email protected]