Business software maker SAP has reported revenue of €7,554 million (+5 percent) lifted by 19 percent rise in Cloud revenue at €3,316 million in Q2 2023.
SAP has generated revenue of €1,146 million from Germany; €2,200 million from Rest of EMEA; €2,477 million from United States; €628 million from Rest of Americas; €313 million from Japan and €790 million from Rest of Asia Pacific.
Cloud revenue rose 19 percent to €3.32 billion. SAP S/4HANA cloud revenue rose 74 percent to €823 million. Software licenses revenue decreased 26 percent to €316 million. Cloud and software revenue rose to €6.50 billion. Services revenue rose 4 percent to €1.05 billion.
But SAP has slashed its full-year outlook for key cloud sales due to lower-than-anticipated transactional revenues in the second quarter. The revision in Cloud revenue outlook is despite the fact that SAP has achieved current cloud backlog of €11,537 million (+21 percent).
For the full year, SAP lowered its cloud revenue outlook to €14 billion-€14.2 billion ($15.59 billion-$15.81 billion) from €14 billion-€14.4 billion, and slightly lifted its forecast for its operating profit to €8.65 billion-€8.95 billion from €8.6 billion-€8.9 billion.
SAP has increased its cloud and software revenue outlook to €27.0 – €27.4 billion from s €26.9 – €27.4 billion for the full year.
“We’ve seen fewer public sector customers in Q2, also due to the geopolitical situation, but demand remains strong for H2,” SAP Chief Executive Officer Christian Klein said in its earnings report.
“We see significant opportunities ahead, in particular through the transformative power of AI,” Christian Klein said.
SAP expects generative AI to change its business and has pledged to invest more than $1 billion in AI-powered technology startups via its enterprise capital firm Sapphire Ventures.
SAP said second quarter 2023 cloud backlog grew by 21 percent to €11.54 billion. SAP S/4HANA current cloud backlog was up 65 percent to €3.72 billion.