In April, SAP lowered its targets in response to the sale of US data analytics subsidiary Qualtrics.
(Photo: Reuters)
Dusseldorf Profits are rising again, but the cloud business is doing a little worse than expected: SAP disappointed shareholders with mixed figures for the second quarter. The course of the software manufacturer continued to fall after the publication on Thursday evening and was listed at almost 122 euros in late trading, around five percent less than in the morning.
In the strategically important cloud business, SAP increased sales by just 19 percent to around 3.3 billion euros. The group also lowered the upper end of the forecast range for the key figure by 200 million euros. At EUR 7.6 billion, total sales also fell short of analysts’ expectations.
Board spokesman Christian Klein pointed out that in view of the difficult economic environment, some contracts had dragged on. In addition, due to the geopolitical crises, some customers prefer to introduce classic software installations instead of cloud products – especially in the public sector.
A side effect: The business with software licenses, which is being phased out at SAP, shrank less than expected with a minus of 26 percent and brought in 316 million euros. All key figures refer to the continued business without Qualtrics – SAP had sold the online market researcher in June.
However, demand for the second half of the year is still high, emphasized Klein: “SAP continues to develop well despite a difficult macroeconomic environment.” He also emphasized the long-term potential of new technologies such as artificial intelligence, which will double the group’s market potential to one trillion euros. Most recently, SAP invested an undisclosed sum in the start-ups Aleph Alpha, Cohere and Anthropic, which develop so-called generative AI in the style of ChatGPT.
SAP increases forecast slightly
The profitability of the software manufacturer developed clearly positively. Operating profit rose 28 percent to 1.4 billion euros and the operating margin rose 4.4 percentage points to 27.2 percent. The management therefore increased the forecast range for the entire financial year by 50 million euros to 8.65 to 8.95 billion euros.
One important reason: In the first half of the year, SAP ended the harmonization of the cloud infrastructure that had been ongoing since 2020. CFO Dominik Asam also referred to the “spending discipline throughout the organization”. In addition, the effects of the Ukraine war are gradually no longer being felt so strongly.
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