SAP reveals Q2 earnings, beating rivals in Cloud

SAP revenue in Q2 2016
Business software major SAP today announced its financial results for the second quarter ended June 30, 2016. SAP is ahead of its main rival in Cloud business.

IBM and Oracle are the two main rivals in Cloud.

“Our new architecture is accelerating momentum across all businesses – cloud, core, and business networks. As a result, SAP delivered a unique trifecta of double digit growth in software, cloud and operating income,” said Bill McDermott, CEO of SAP.

IDC forecasts public cloud IaaS revenues to more than triple, from $12.6 billion in 2015 to $43.6 billion in 2020, with a compound annual growth rate (CAGR) of 28.2 percent over the five-year forecast period. The public cloud IaaS market is dominated by a few large service providers, led by Amazon.

SAP said its cloud subscriptions and support revenue grew 30 percent to €720 million. New cloud bookings rose 28 percent to €255 million.

The total of cloud subscriptions & support revenue and software support revenue reached 63 percent of total revenue in the second quarter 2016.

SAP is significantly outpacing its main competitor in cloud and software revenue. Cloud and software revenue was €4.36 billion (+7 percent).

SAP added more than 500 SAP S/4HANA customers, of which approximately 40 percent are net new SAP customers. The Hershey Company (USA), the Targin Group (Russia), Cathay Pacific (Hong Kong) and Roy Hill Holdings Pty Ltd. (Australia) selected SAP S/4HANA in the second quarter.

The number of customers for SAP SuccessFactors Employee Central exceeded 1,250 at the end of the second quarter.

Cloud subscriptions and support revenue in the SAP Business Network segment was up 21 percent at constant currencies.

SAP says that approximately 2.2 million connected companies trade over $820 billion of commerce on the Ariba network, more than 42 million end users process travel and expenses effortlessly with Concur and customers managed over 2.6 million flexible workers in approximately 130 countries with the Fieldglass platform over the past 12 months.

In the EMEA region, cloud and software revenue increased 7 percent. Cloud subscriptions and support revenue grew 38 percent.

In the Americas region, SAP grew cloud and software revenue by 8 percent and cloud subscriptions and support revenue by 26 percent.

In the APJ region, SAP said its cloud and software revenue rose 7 percent, with cloud subscriptions and support revenue growing by 44 percent. In APJ, SAP had strong double-digit software licenses revenue growth in China and India, whereas Japan had almost triple-digit growth. India, China and Japan also had double-digit growth in cloud subscriptions and support revenue.