ChannelBiz UK

SAP reports plunging profits despite new cloud business

Like IBM this week, despite trumpeting more cloud business for the year, SAP has posted a fall in profits for the last 12 months.

SAP said sales were actually up by 18 percent to 20.8 billion euros. However, operating profits were down 2 percent to 4.25 billion euros, and profits after tax slumped 7 percent to 3.06 billion euros.

Global headcount at SAP went up 3 percent to 77,000. SAP put some gloss on the results by saying that cloud subscriptions and support revenue was €2.29 billion for the year (2014: €1.09 billion), an increase of 110 percent.

Software license revenue was €4.84 billion (2014: €4.40 billion), an increase of 10 percent. Software licenses and support revenue was €14.93 billion (2014: €13.23 billion), an increase of 13 percent. Cloud and software revenue was €17.22 billion (2014: €14.32 billion), an increase of 20 percent.

“By 2017 SAP continues to expect its rapidly growing cloud subscriptions and support revenue to be close to software license revenue, and is expected to exceed software license revenue in 2018. At that time, SAP expects to reach a scale in its cloud business that will clear the way for accelerated operating profit expansion,” said SAP.

@AntonySavvas

Antony Savvas

York, UK-based Antony Savvas has been a technology journalist for 25 years and has expertise in all major areas of enterprise and consumer IT. He has worked for a number of leading technology magazines and websites and his work is syndicated across the internet. He also undertakes corporate work for some of the world's leading technology companies.