SAP Shares Fall After Quarterly Cloud Sales Miss Estimates

SAP SE shares fell in New York after second-quarter sales in its cloud unit missed analyst estimates.

(Bloomberg) — SAP SE shares fell in New York after second-quarter sales in its cloud unit missed analyst estimates. 

Sales in constant currencies at the cloud unit, which is the company’s largest, rose 22% from a year earlier to €3.3 billion ($3.7 billion), the Walldorf, Germany-based company said in a statement Thursday. That compares with an average estimate of €3.41 billion by analysts in a Bloomberg survey.

SAP’s American depositary receipts fell 5.2% to $135.56 at 1:43 p.m. in New York, the biggest intraday decline in a year. 

Europe’s biggest software company slightly raised its operating profit outlook for 2023 and met overall sales forecasts in the second quarter, with revenue at constant currencies up 8% to €7.55 billion in the period. That compared to the average analyst estimate of €7.6 billion.   

SAP has moved to transition its enterprise business to cloud subscriptions from its traditional licensing models to tap the faster-growing market. Software contract spending in the second quarter fell to the lowest in three years, according to a report by tech procurement service Vendr this week, as inflation and economic uncertainty undermined sales. 

The second quarter performance “puts us on the right trajectory” to raise the operating profit outlook, Chief Financial Officer Dominik Asam said in the statement. The company now expects operating profit at constant currencies this year of €8.65 billion to €8.95 billion, an increase of €50 million to either end of the range. 

It cut its forecast for 2023 cloud revenue at constant currencies to €14 billion to €14.2 billion, lowering the upper range from €14.4 billion previously. 

The forecast for cloud revenue fell due to “some economic pressure” which pushed some deals into the second half of this year, SAP Chief Executive Officer Christian Klein said in a call with reporters, adding that some public sector clients want on-premise solutions because of geopolitical risk.

(Updates with CEO comment in eighth paragraph. A previous version of this story corrected the percentage change in cloud sales, revenue.)

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