SAP Financials 2019: How the Software Giant Performed

SAP Financials 2019: How the Software Giant Performed

SAP just revealed the preliminary results of its financials for 2019 which covers the fourth quarter of the year which ended on December 31, 2019. They proudly announced that the software giant hit all its targets for the year with better figures than the results revealed for 2018.

SAP Financial Highlights for the Full Year 2019

SAP’s new cloud bookings amounted to €2.27 billion, which is up 25% and up 31% without the infrastructure-as-a-services (IaaS). The cloud subscriptions and support backlog raised by 23%, which exceeds the €12 billion by the end of the year.

The total IFRS cloud revenue amounted to €6.93 billion or non-IFRS at constant currencies cloud revenue of €6.77 billion, leading SAP to achieve its target financials for 2019.

Meanwhile, software licences revenue lowered by 2% year over year to €4.53 billion; however, new cloud and software license order entry have exceeded €11.5 billion and even grew by 10% year over year.

SAP achieved the full-year outlook of €22.4 to €22.7 billion non-IFRS at constant currencies with the IFRS cloud and software revenue hitting €23.01 billion or non-IFRS at constant currencies cloud and software revenue of €22.49 billion.

SAP shows IFRS total revenue of up to 12% year over year to €27.55 billion. The non-IFRS total revenue is also up 12%, and non-IFRS at constant currencies was up 9%.

SAP also added that the share of more predictable revenue increased by 2 per centage points year-over-year to 67% for the entire 2019.

IFRS cloud gross margin increased by 4.9 per centage points year-over-year to 63.5%, and the non-IFRS cloud gross margin increased by 5.2 per centage points year-over-year to 68.2%.

The IFRS earnings per share decreased by 18%, but the non-IFRS earnings increased by 18% for the financial year 2019.

Segment Performance for the Fourth Quarter 2019

The SAP financials for 2019 divides the reportable segments into three categories: Applications, Technology & Services, Intelligent Spend Group (ISG), and Qualtrics.

For Applications, Technology & Services, SAP reported the performance of the SAP S/4HANA, the core of the Intelligent Enterprise, to have added approximately 1,200 customers in the quarter. This has now been added to the previous numbers and totaling to more than 13,800 customers—40% of which were net new.

The SAP SuccessFactors Human Experience Management (HXM) Suite, which leverages the power of Qualtrics and has helped customers get real-time insights on organisation behaviors and sentiments, received more than 450 customers since its launch in 2019.

SAP C/4HANA, which integrates with SAP S/4HANA and leverages the benefits of Qualtrics Customer Experience Management to understand customers better, is being used by companies such as Aldo Group, Carhartt, Chevron, Intersport Deutschland, Nielsen Company and Royal Dutch Shell.

SAP’s business technology platform and analytics cloud solutions were chosen by companies such as Allegiant Travel Company, Barclaycard, GetYourGuide, and Telecom Italia during the fourth quarter.

ISG’s segment revenue in the fourth quarter was up 15%. Coca-Cola Hellenic Bottling Company, Electrolux, GEA Group, Karcher, New York Yankees, and Repsol joined the league of ISG users in the fourth quarter.

Lastly, Qualtrics gained a segment revenue of €152 million. To date, 11,450 customers trust in the Qualtrics XM Platform with Allianz SE, Alaska Airlines, ExxonMobil, JPMorgan Chase, Samsung Group, Santander, and Volkswagen Group Australia joining in the fourth quarter.

Co-CEOs, Jennifer Morgan, and Christian Klein noted that becoming an experience company powered by the intelligent enterprise is part of SAP’s strategy. The pointed out how more customers are leveraging SAP and Qualtrics to address the experience gap.

They added:

“…we continue to see strong adoption of S/4HANA as the core of the intelligent enterprise across all deployment models.”

Luka Mucic, SAP CFO, shared that SAP has been hitting its targets for the fifth year in a row, further stating that the steady increase in non-IFRS profits and margins is something to be proud of. He added:

“This success would not have been possible without the dedication, innovative spirit, and discipline of our people.”

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