SAP reported a solid first quarter but did not meet analyst expectations as cloud products made up the bulk of sales in the first financial report of the year.
In the company's Q1 2017 financial report (statement), ending March 31, SAP reported first quarter revenue of €5.285 billion, or $0.64 per share -- an increase of 12 percent year-on-year.
Operating profit, excluding special items, rose eight percent to €1.198 billion. The results just missed the mark according to Reuters analysts who, on average, expected operating profit of €1.229 billion in this quarter.
Operating cash flow was reported at €2.87 billion, an increase of 16 percent year-over-year. Net debt was €460 million, sliced by €2.8 billion in comparison to 2016.
SAP said cloud bookings were up 49 percent in comparison to Q4 2016 -- 44 percent at constant currencies -- and reached €215 million.
IFRS cloud subscriptions and support revenue grew 34 percent year-over-year to €905 million. Non-IFRS cloud subscriptions and support revenue grew 34 percent year-over-year to €906 million. Cloud subscriptions and support revenue, alongside software support revenue, claimed a total of 69 percent of SAP's overall revenue in Q1.
S/4HANA adoption grew to more than 5,800 customers in the first quarter, with roughly 400 new customers joining the fold.
"SAP's outstanding first quarter results are a decisive follow-on to our record setting 2016," said Bill McDermott, SAP CEO. "Led by S/4HANA, we are seeing mass customer adoption of our solutions globally. Our inspired workforce is firmly committed to staying focused on the success of our customers and shareholders."
SAP expects full year 2017 non-IFRS cloud subscriptions and support revenue to be in the range of €3.8 billion to €4.0 billion at constant currencies in comparison to €2.99 billion last year. In addition, the tech giant expects operating profit to be in the range of €6.8 billion to €7 billion, an increase from €6.63 billion in 2016.