SAP Releases Q4 and 2018 Results

SAP Announces Preliminary Fourth Quarter and Full Year 2018 Results on www.sap.com. The results continue to show growth for SAP HANA and SAP S/4HANA. This growth mirrors Approyo's growth and accolades throughout 2019 and align with our vision as the premier SAP Platform as a service partner.

SAP Hits or Exceeds All Raised Outlook Metrics - Targets More Than 3x Cloud Revenue by 2023

• Cloud Subscription and Support Revenue Up 32% (IFRS) and Up 38% (Non-IFRS at Constant Currencies)  in FY 2018 
• Cloud Backlog Increased 30%, Exceeding €10 Billion at Year-End  
• Cloud and Software Revenue Up 5% (IFRS) and Up 10% (Non-IFRS at Constant Currencies) in FY 2018
• Cloud and Software Order Entry Exceeds €10 Billion, Up 14% at Constant Currencies in FY 2018
• Operating Profit Up 17% (IFRS) and Up 10% (Non-IFRS at Constant Currencies) in FY 2018  
• Guiding for Up to 39% Non-IFRS Cloud Subscription and Support Revenue Growth and Up to 10% Non-IFRS Cloud and Software Revenue Growth in 2019 at Constant Currencies  
• Guiding for Up to 11.5% Non-IFRS Operating Profit Growth in 2019 at Constant Currencies – Faster Than  Total Revenue Growth
• Targeting More Than €35 Billion in Total Revenue by 2023 

Full Year 2018 Highlights:
Even after multiple guidance raises during the year SAP met or exceeded all of its 2018 outlook metrics.

For the full year new cloud bookings were €1.81 billion, up 25% (up 28% at constant currencies). Cloud subscriptions and support backlog increased 30%, reaching €10 billion at year-end. Cloud subscriptions and support revenue was €4.99 billion (IFRS) or €5.21 billion (non-IFRS at constant currencies), achieving the full year outlook (€5.15 to €5.25 billion non-IFRS at constant currencies). Software revenue decreased 5 % year over year to €4.65 billion (IFRS), flat year over year (non-IFRS at constant currencies). New cloud and software license order entry exceeded €10 billion and grew by 14% at constant currencies year over year in the full year. Cloud and software revenue was €20.62 billion (IFRS) or €21.58 billion (non-IFRS at constant currencies), exceeding the full year outlook (€21.15 to €21.35 billion non-IFRS at constant currencies). Total revenue was €24.71 billion (IFRS) or €25.96 billion (non-IFRS at constant currencies), exceeding the full year outlook (€25.20 to €25.50 billion non-IFRS at constant currencies).

SAP’s rapidly expanding cloud business together with solid growth in support revenue continued to drive the share of more predictable revenue. The total of non-IFRS cloud subscriptions & support revenue and non-IFRS software support revenue was 65% of non-IFRS total revenue for the full year 2018, up 2 percentage points.

For the full year, operating profit was €5.71 billion (IFRS) or €7.48 billion (non-IFRS at constant currencies), achieving the full year outlook (€7.425 to €7.525 billion non-IFRS at constant currencies). Earnings per share increased 2% to €3.42 (IFRS) and decreased 2% to €4.35 (non-IFRS).

Operating cash flow for the full year was €4.30 billion, a decrease of 15% year over year. Free cash flow decreased 25% year over year to €2.84 billion. At year end, net liquidity was –€2.49 billion.

Fourth Quarter 2018 highlights
In the fourth quarter, new cloud bookings were €736 million, up 25% (23% at constant currencies). Cloud subscriptions and support revenue grew 41% year over year to €1.41 billion (IFRS), up 40% (non-IFRS at constant currencies). Software revenue grew 1% year over year to €2.09 billion (IFRS), up 8% (non-IFRS at constant currencies). New cloud and software license order entry grew 18% at constant currencies year over year. Cloud and software revenue grew 9% year over year to €6.32 billion (IFRS), up 11% (non-IFRS at constant currencies). Total revenue grew 9% year over year to €7.43 billion (IFRS), up 13% (non-IFRS at constant currencies).

In the fourth quarter operating profit increased by 22% year over year to €2.40 billion (IFRS), up 8% (non-IFRS at constant currencies). Earnings per share decreased 8% to €1.41 (IFRS) and decreased 15% to €1.51 (non-IFRS).

SAP S/4HANA
SAP S/4HANA is at the core of the Intelligent Enterprise. With S/4HANA, customers automate more and more of their business processes enabling employees to focus on higher-value tasks. It detects patterns, predicts outcomes and suggests actions empowering companies across all industries to reinvent their business models for the digital economy.

S/4HANA adoption grew to approximately 10,500 customers, up 33% year over year. In the fourth quarter, more than 40% of the additional S/4HANA customers were net new.

Business Outlook 2019 
Reflecting SAP’s strong cloud and overall business momentum as well as the Qualtrics acquisition with a January 23rd, 2019 closing date, the Company is providing the following 2019 outlook:

• Non-IFRS cloud subscriptions and support revenue is expected to be in a range of €6.7 − €7.0 billion at constant currencies (2018: €5.03 billion), up 33% – 39% at constant currencies.  
• Non-IFRS cloud and software revenue is expected to be in a range of €22.4 – €22.7 billion at constant currencies (2018: €20.66 billion), up 8.5% – 10% at constant currencies.  
• Non-IFRS operating profit is expected to be in a range of €7.7 – €8.0 billion at constant currencies (2018: €7.16 billion), up 7.5% – 11.5% at constant currencies.  
• In addition, SAP expects total revenues to increase strongly, at a rate slightly lower than operating profit.
• The comparative numbers for 2018 do not include Qualtrics. Callidus revenue and profits are included in the comparative numbers from the April 5th, 2018 acquisition close date. 
• While SAP’s full-year 2019 business outlook is at constant currencies, actual currency reported figures are expected to be impacted by currency exchange rate fluctuations as the Company progresses through the year. 

Read the full results: https://www.sap.com/docs/download/investors/2018/sap-2018-q4-statement.pdf