Cloud subscriptions and support revenue more than doubled to 600m euros in the quarter, while the company’s on-premise licence sales recovered from a weak second quarter, growing 4 percent.
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Analyst Daud Khan at Berenberg said that the fourth-quarter remained critical for SAP to reach its full-year targets.
SAP’s third-quarter operating profit rose 19 percent to 1.62 billion euros (£1.06bn), beating analyst estimates that topped at 1.59bn euros.
On the other hand, the company’s flagship offering – S/4HANA – continues to go strong, driven by its increased adaptability and a broader range of available applications.
Europe’s largest software maker said it was sticking to its outlook for the full year for non-IFRS operating profit of 5.6bil euros (RM26.6bil) to 5.9bil euros (RM28.1bil) at constant currencies, which represents flat growth to a rise of as much as 5% from 5.6bil euros (RM26.6bil) last year. The stock had gained 3.8 percent this year through Monday.
It has been seen that SAP and other companies including Oracle have been inclining in the direction towards the transition to computing as a service over the Internet. Redwood City, California-based Oracle last month reported fiscal first-quarter revenue that fell short of analysts projections, crimped by a slowdown in software license sales amid a shift to cloud products.
The Non-IFRS total revenue was €4.99bn, which is also up by 17% from the €4.26bn it reported during the previous year.
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“Our robust double-digit progress in cloud and software program income was primarily pushed by wonderful leads to mature markets”, SAP’s chief monetary officer Luka Mucic stated in a press release, including that he anticipated continued volatility and financial challenges in rising markets. The company is on track to boost cloud revenue by about 30 percent this year when excluding the impact of acquisitions, analysts at Jefferies said in a note.
