SAP’s 10% revenue growth in Q2 explained

SAP revenue Q2 2017Business software major SAP has posted revenue of €5,782 million (+10 percent) and operating profit of €926 million (–27 percent) in the second quarter 2017 ended June 30, 2017.

The drop in operating profit was due to restructuring costs.

“Our winning strategy is again validated by fast adoption of S/4HANA and our full portfolio of cloud solutions. We expect continuing momentum in the second half and confidently raise our guidance for the full year,” said SAP CEO Bill McDermott.

Cloud subscriptions and support revenue grew 29 percent to €932 million. Software revenue rose 5 percent to €1.09 billion. SAP’s cloud and software revenue was €4.76 billion (+9 percent).

S/4HANA adoption grew to more than 6,300 customers (+70 percent). SAP added approximately 500 additional customers of which around 30 percent were net new customers. Google, Centrica, and Mercadona selected S/4HANA in the second quarter.

CITIC Pacific Mining among many others adopted SAP Leonardo solutions in the second quarter.

SAP said SuccessFactors Employee Central, which is the core of HCM offering, had more than 1,800 customers in the second quarter. Companies like Vitra and Swiss Post selected SAP’s workforce management solutions in the second quarter.

SAP said EMEA region’s cloud and software revenue increased 9 percent. Cloud subscriptions and support revenue grew 48 percent in Germany and Russia. SAP had double-digit software revenue growth in Germany and MENA (Middle East and North Africa) and triple-digit software revenue growth in Russia.

In Americas, cloud and software revenue grew 8 percent and cloud subscriptions and support revenue increased 20 percent. In North America, Canada had double-digit growth in software revenue. In Latin America Mexico and Chile were highlights with double-digit software revenue growth.

In the APJ region, Cloud and software revenue was up 13 percent with cloud subscriptions and support revenue growing by 52 percent. SAP China was strong in cloud subscriptions and support revenue while Japan and Australia both had strong double-digit growth in software revenue.

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