SAP SE today announced its financial results for the fourth quarter and twelve months ended December 31, 2014.
- Cloud Business Surges – Guidance Achieved as Non-IFRS Cloud Subscriptions and Support Revenue Jumped 72% in Fourth Quarter and Increased 45% in Full Year
- Cloud Subscriptions and Support Backlog Increased 94%, Exceeding €2.3 Billion at Year-End
- Strong HANA Momentum – More Than 5,800 HANA Customers and More Than 1,850 Suite on HANA Customers
- Software and Software-Related Service Revenue Guidance Achieved Despite the Accelerated Shift from Upfront to More Ratable Revenue
- Operating Profit Guidance Achieved While Significantly Expanding the Company’s Cloud Delivery Capabilities
- Targeting €7.5 - €8.0 Billion in Cloud Subscriptions and Support Revenue and €26 - €28 Billion Total Revenue by 2020
SAP delivered exceptionally strong growth in the cloud and continues to lead in this industry-wide transformation. Full year non-IFRS cloud subscriptions and support revenue increased 45% at actual and constant currencies to €1.10 billion(1).
The company also showed a solid software and software-related service revenue performance despite the accelerated shift from upfront software revenue to more subscription-based cloud revenue. Non-IFRS software and software-related service revenue grew 7% at constant currencies (6% at actual currencies to €14.87 billion) achieving the full year target of 6% - 8% growth at constant currencies. Non-IFRS operating profit increased by 3% at constant currencies to €5.63 billion (3% at actual currencies to €5.64 billion), achieving the full year outlook of €5.6 - €5.8 billion at constant currencies.
“In 2014 we delivered on our Run Simple strategy to help our customers transform their businesses. SAP's strong growth is driven by the HANA platform, the broadest cloud portfolio and the largest business network in the world,” said Bill McDermott, CEO of SAP. “SAP powers the clear path to growth for businesses in the 21st century: run real-time, run networked, run simple. We will continue to push relentlessly toward a much more predictable business model and are once again raising our cloud ambition to grow 7X from 2014 through 2020.”
“We had exceptional growth in our cloud business and have significantly lifted the total of cloud backlog and non-IFRS deferred cloud revenue to more than €3 billion. This is committed business that will drive strong cloud growth in the future,” said Luka Mucic, CFO of SAP. “We expect cloud subscriptions to exceed software license revenue in 2018. At that time SAP expects to reach a scale in its cloud business that will clear the way for accelerated operating profit expansion.”
SAP is the fastest growing enterprise cloud company at scale(2) with fourth quarter non-IFRS cloud subscriptions and support revenue increasing 72% year-over-year (59% at constant currencies). The annual total cloud revenue run rate now exceeds €1.7 billion(3) or $2.0 billion(4). Non-IFRS calculated cloud billings increased 104% (78% at constant currencies) in the fourth quarter(5). Non-IFRS deferred cloud subscriptions and support revenue was €699 million as of December 31, 2014, a year-over-year increase of 56% (40% at constant currencies)(6). The Company’s cloud subscriptions and support backlog(7) as of December 31, 2014 was €2.3 billion, a year-over-year increase of 94%.
SAP’s acquisition of Concur in December 2014 propels the world’s largest business network into the $1.2 trillion corporate travel and expense market. More than 1.7 million connected companies trade over $700 billion of frictionless commerce(1) on this network – more than Amazon, eBay and Alibaba all combined.
SAP’s intense focus on next-generation customer engagement is also fueling growth. Its hybris omni-channel e-commerce platform, combined with Cloud for Sales, once again saw strong revenue contribution in 2014 with triple-digit growth in software revenue and cloud subscriptions and support revenue combined.
SAP HANA, the platform for real-time business applications, had a phenomenal year and continues to be a major growth engine for SAP. The Company saw continued broad market adoption of SAP HANA across all industries and regions as customers recognize the compelling business benefits of SAP HANA. SAP now has more than 5,800 HANA customers and more than 1,850 customers for SAP Business Suite on HANA. SAP HANA is also evolving into a leading development platform.
In its services business, SAP is radically simplifing the way it engages with customers and delivers services to its customers: Under the new ONE Service approach, SAP provides one service portfolio, out of one global organization and under one contract. To execute on ONE Service SAP has combined all lines of services under one organizational umbrella.
To view an unabridged version of this press release, visit: http://global.sap.com/news-reader/index.epx?articleId=24021
