Cloud helped SAP cushion sagging Q3 revenues

Source :Sify
Author :Finance Desk
Last Updated: Mon, Oct 26th, 2020, 17:27:04hrs

Berlin: The Cloud have cushioned ERP Software technology provider SAP AG's revenues for the quarter ending September.  

The German global software major saw revenues slipping four percent (year on year) down to 6.54 billion euros ($7.76 billion) for third quarter of this year.  

Cloud revenues zoomed by 10 percent to 1.98 billion euros, the company stated in a report. However, the combined revenue from software and cloud services slipped by two per cent to 5.5 billion euros.  

Operating profit of the company fell one per cent to 2.07 billion euros in the quarter ending on September 30.  

"Covid-19 has created an inflection point for our customers. The move to the cloud combined with a true business transformation has become a must for enterprises, to gain resiliency and position them to emerge stronger out of the crisis," SAP CEO Christian Klein said in the statement.

"Together with our customers and partners we will co-innovate and reinvent how businesses run in a digital world."

SAP said it will accelerate growth in the cloud and that the company is targeting more than 22 billion euros in cloud revenue 2025.

The company plans to accelerate the modernisation of its cloud delivery, arriving at a harmonised delivery infrastructure earlier than planned.

As a result, SAP will significantly increase the efficiency and resiliency of its cloud delivery operations.

Further, SAP said it will increase R&D investments to accelerate its customers' transformation in the cloud and to establish a leading position in new categories like Industry Cloud.

"In Q3 we continued to improve our operating margin against a strong prior year comparison amidst a challenging environment. Earnings per share and cash flow grew even more rapidly," SAP Chief Financial Officer Luka Mucic said.

Revenues of another software major - IBM were also down. IBM hit a hat-trick of revenue decline for the third quarter and Cloud revenues helped IBM stay afloat.  

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With Agency Inputs