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SAP announced a solid Q4 2013, with the softare giant growing both on premise and cloud-based software segments

SAP announced a solid Q4 2013, with the softare giant growing both on premise and cloud-based software segments

SAP announced a solid fourth quarter Friday as attempts to grow its cloud business continue to pay dividends. Traditional software sales improved for the enterprise software giant and its cloud subscription and HANA revenues also increased.

Revenue from traditional software sales improved over the previous quarter, growing by 3.5 per cent year on year (-2 per cent in non-IFRS) in the fourth quarter ending December 31, 2013, from €1.94bn in Q4 2012 to €1.9bn, an improvement on the five per cent decline the company experienced in Q3. Operating profit rose 13 per cent to €1.8bn.

The company’s cloud subscription revenue swelled by 66 per cent (39 per cent in constant currencies) this past quarter. The company raked in €758m in cloud subscription revenue during the 2013 fiscal year, including revenue generated from Ariba and SuccessFactors, which is up 130 per cent from the €343m it generated during the 2012 fiscal year.

The company exceeded its full year revenue targets by about €37m.

“SAP invested significantly in innovation and successfully scaled its cloud business while maintaining operational discipline and reaching our 2013 operating profit outlook,” said Werner Brandt, chief financial officer of SAP. “SAP expanded its non-IFRS operating margin by 140 basis points at constant currencies driven by operational excellence despite the margin impact from acquisitions and our momentum in the cloud.”

The company also achieved reasonable results with its HANA in-memory platform, with revenue jumping 69 per cent year on year to €664m at constant currencies, well within the company’s expectations (€650-700m). It would seem little will delay the company from reaching its self-imposed goal of generating €1bn in HANA revenues.

SAP spokesman Daniel Reinhardt told Business Cloud News that the company is pleased with the fact that it grew its on premise and cloud software business at the same time at a time when most companies claim the two are diametrically opposed, though he acknowledged the strong currency headwinds – particularly eastward – that have generated some fairly big differences in the IFRS to constant currency figures.

That said, it’s possible that its recent push in the Asia Pacific region might be in part responsible for its renewed growth this quarter, but we’ll have to wait for a more detailed report later this month. The company will report its full Q4 results on January 21, including an outlook for 2014.

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