SAP revenue in fourth quarter boosted by cloud, HANA, mobile

The company has forecast software and software-related service revenue will grow by 11 to 13 percent this year

SAP's revenue in the fourth quarter grew by 12 percent, helped by strong growth in the market for its cloud applications, its HANA in-memory database and mobile applications.

Revenue in the fourth quarter ended Dec. 31 was ¬5 billion (US$6.6 billion at the exchange rate on the last day of the quarter), up 12 percent from the same quarter a year earlier, according to IFRS (international financial reporting standards). Software and software-related service revenue for the quarter was ¬4.2 billion, up 14 percent from a year earlier.

The business software vendor also forecast Wednesday non-IFRS software and software-related service revenue growth of 11 to 13 percent at constant currencies this year, with software and cloud subscriptions revenue to increase in a range of 14 to 20 percent.

While revenue from software grew 9 percent to ¬1.9 billion in the quarter, cloud subscriptions and support revenue grew by a whopping 2,000 percent to ¬126 million from ¬6 million a year earlier. Revenue from HANA was nearly ¬200 million in software revenue in the fourth quarter, totaling almost ¬400 million for the full year, while the mobile business contributed more than ¬220 million to software revenue, SAP said.

SAP's operating profit was however down by 5 percent in the fourth quarter to ¬1.6 billion because of expenses on share-based compensation and acquisition-related charges, and net profit dropped by 8 percent in the quarter from a year earlier. The company acquired cloud-based human capital management tools company SuccessFactors in February, and cloud-based e-commerce vendor Ariba in October.

For the full year, total revenue was ¬16 billion, up by 14 percent from the previous year. Software and cloud subscription revenue of close to ¬5 billion was up 19 percent, while support revenue was ¬8 billion, an increase of 14 percent. Operating profit was down 17 percent to ¬4 billion, also impacted by costs of acquisitions and share-based compensation. Net profit was down 18 percent to ¬2.8 billion. The number of employees has gone up by 8,700 FTE (full-time equivalents) in the year, of which more than 4,800 came from acquisitions.

The company has said that its profits were also lower in 2012 because of a large reduction in the provision for the TomorrowNow litigation with Oracle in the previous year.

SAP expects full-year 2013 non-IFRS software and cloud subscriptions revenue to increase in the range of 14 to 20 percent at constant currencies. The full-year 2013 non-IFRS cloud subscription and support revenue contributing to this growth is expected to be around ¬750 million at constant currencies, it said. SAP also expects full-year non-IFRS operating profit in 2013 of up to ¬5.95 billion at constant currencies, from ¬5.21 billion in 2012.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

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