SAP Q4 2019: SAP hits €8 billion revenue mark as cloud bookings surge

Cash flow across the full year has suffered, however, due to share payouts and restructuring expenses.

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SAP has reported its fourth-quarter earnings results, with strong cloud bookings and the announcement that all internal financial targets have been achieved across the full financial year.

SAP's Q4 2019 earnings (statement) reveal revenues of €8.04 billion IFRS or €8.05 billion non-IFRS, up 8 percent year-over-year with basic earnings per share of €1.37 (€1.82 non-IFRS), a reduction of 3 percent in comparison to Q4 2018 IFRS or an increase of 21 percent non-IFRS.

SAP reported an operating profit of €2.12 billion IFRS, which has decreased by 11 percent year-over-year, or up 12 percent (non-IFRS) and up 9 percent non-IFRS at constant currencies.

Over Q4 2019, cloud bookings were up 19 percent, reaching €878 million -- 17 percent at constant currencies and up 20 percent excluding Infrastructure-as-a-service (IaaS). 

Cloud and software revenue grew 8 percent year-over-year to €6.85 billion (IFRS), up 8 percent non-IFRS and 6 percent non-IFRS at constant currencies in Q4 2019. 

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In Q4 2019, SAP reported a software license revenue reduction of 4 percent year-over-year to €2 billion IFRS or down 6 percent non-IFRS at constant currencies. 

The three main business segments SAP reports on, "Applications, Technology & Services," "Qualtrics" and "Intelligent Spend Group" performed well over the fourth quarter of 2019.

Applications, Technology & Services revenue increased by 5 percent to €6.97 billion year-over-year, or up 3 percent at constant currencies.  

SAP S/4HANA added an additional 1,200 customers in Q4 2019. SAP S/4HANA now accounts for over 13,800 customers, up 24 percent year-over-year.

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In the fourth quarter, Qualtrics revenue was €156 million. New clients added during the quarter include Volkswagen Group Australia, JPMorgan Chase, Allianz SE, Alaska Airlines, ExxonMobil, Santander, and Samsung.

SAP's Intelligent Spend Group revenue was up 15 percent to €830 million year-over-year, or up 12 percent at constant currencies. 

"SAP's strategy to be the experience company powered by the intelligent enterprise is resonating," said co-CEOs Jennifer Morgan and Christian Klein in a prepared statement. "More and more customers are turning to SAP and Qualtrics to close their experience gap. At the same time, we continue to see strong adoption of S/4HANA as the core of the intelligent enterprise across all deployment models."

See also: SAP Q3 2019: Strong earnings, new Microsoft SAP HANA partnership revealed

In October, SAP reported Q3 2019 financial results including revenues of €6.79 billion IFRS, an operating profit of €1.68 billion IFRS, and cloud bookings revenue of €572 million. 

SAP says it has hit every revenue and profit target across FY 2019. Over the full year, the cloud software giant has reported total revenue of €27.55 billion, up 12 percent year-over-year non-IFRS and up 9 percent non-IFRS at constant currencies.

New cloud bookings were up 25 percent at €2.27 billion and up 31 percent excluding Infrastructure-as-a-Service (IaaS). Cloud subscriptions increased by 23 percent, surpassing the €12 billion mark by the end of the fiscal year. Overall cloud revenue for FY 2019 was €6.93 billion IFRS or €6.77 billion non-IFRS at constant currencies.

IFRS operating profits, margins, and EPS were down across the year. SAP says that this is due to the Qualtrics acquisition, restructuring charges, and share compensation. Operating profit was down 21 percent to €4.5 billion, margins decreased by 6.8 percent year-over-year, and earnings per share decreased by 18 percent IFRS to €2.80. Operating cash flow was €3.5 billion across FY 2019. 

Below is SAP's 2020 outlook, based on non-IFRS figures:

  • Total revenue is expected to be in a range of €29.2 -- €29.7 billion at constant currencies (2019: €27.63 billion), up 6 - 8 percent at
  • constant currencies
  • Cloud revenue is expected to be in a range of €8.7 -- €9 billion at constant currencies
  • Cloud and software revenue is expected to be in a range of €24.7 -- €25.1 billion at constant currencies
  • Operating profit is expected to be in a range of €8.9 -- €9.3 billion at constant currencies (2019: €8.21 billion), up 8 - 13 percent at
  • constant currencies
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