Cloud boosts SAP revenue, even as demand falls in Asia

The company saw revenue growth in the first quarter in all regions except Asia Pacific and Japan

SAP reported strong growth in cloud subscription and support revenue in the first quarter, even as the company saw a decline in software and cloud subscription revenue in the Asia-Pacific and Japan region.

The business software company said Friday that total revenue grew 7 percent to €3.6 billion (US$4.6 billion), according to IFRS (international financial reporting standards).

The company's profit for the quarter was €520 million, an increase of 17 percent from a year earlier.

Software and software-related service revenue was €2.9 billion, up 11 percent year on year, while revenue from software and cloud subscriptions grew 19 percent to €794 million. Support revenue grew 8 percent year on year to €2.1 billion.

Revenue from HANA, the company's in-memory database, tripled year on year, adding €86 million to software revenue in the quarter. SAP also reported double-digit growth in its mobile business.

But the highest growth was in the company's cloud business. Its cloud subscription and support revenue was €137 million, up 373 percent year on year. SAP, however, holds that the cloud subscription revenue for the quarter is not a correct measure of performance in the cloud computing market as SAP cloud subscription and support revenue includes only proportionate revenue recognized in the quarter of multi-year, non-cancellable cloud subscription contracts entered with customers.

The "deferred cloud subscription and support revenue," which includes committed future cloud subscription and support revenue already paid by the customer for subsequent quarters of the year, was €344 million, up by over 100 percent from the same quarter last year.

The 2013 revenue and profit figures include the revenue and profit from SAP's acquisition of cloud-based human capital management tools company SuccessFactors and cloud-based e-commerce vendor Ariba. The comparative first quarter numbers for 2012 only include SuccessFactors starting on Feb. 21, and do not include Ariba as the acquisition did not occur until Oct. 1, SAP said.

The company has forecast full-year 2013 non-IFRS software and cloud subscription revenue will grow in the range of 14 to 20 percent at constant currencies, helped by full-year non-IFRS cloud subscription and support revenue of around €750 million at constant currencies. It expects non-IFRS software and software-related service revenue in the year to increase in the range of 11 to 13 percent at constant currencies. The company also expects non-IFRS operating profit in the year to be in the range of €5.85 billion to €5.95 billion at constant currencies, up from €5.21 billion in 2012.

Tags business issuesapplicationsSAPfinancial resultssoftware

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John Ribeiro

IDG News Service

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