SAP profits dented despite cloud expansion

On-prem software business up

SAP has reported a drop in net profits for its most recent quarter and for 2015 despite an accelerating cloud business.

Europe’s largest software firm saw net profit down two per cent to 1.2bn euro ($1.3bn) despite a growth in revenue of 16 per cent to 6.3bn ($6.8bn) euro.

SAP was reporting for the period to December 31.

As ever, cloud was SAP’s fastest growing business segment but it was on-prem software helped account for the majority of the money SAP made.

Cloud subscriptions and support grew 81 per cent and accounted for 632m euro (687m).

Cloud and software increased 18 per cent to 5.3bn euro ($5.7bn) while the on-prem software business – licenses and support – were up 13 per cent to 4.7bn euro ($5.1bn).

For the year, SAP’s post-tax profits were dented by seven per cent to 3bn euro ($3.2bn) on total revenue of 20.7bn ($22.5bn), up 18 per cent.

Again, cloud was fastest growing – 110 per cent to 2.2bn euro ($2.3bn) - while cloud and software grew second fastest by 20 per cent to 17.2bn euro ($18.7bn).

Software licenses and support – SAP’s traditional business – was up 13 per cent to 14.9bn ($16.2bn).

SAP did not address falling profits in its announcement. ®

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