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SAP Reports Strong Q2 Performance, Updates Guidance


SAP, the German software company, has revised its guidance for the year following a successful second quarter. The company reported higher revenue and operating profit, driven by impressive growth in its core cloud business.

On a non-IFRS basis, SAP revealed that total revenue rose to €7.55 billion ($8.46 billion) compared to €7.21 billion in the same period last year. Cloud revenue also saw a significant increase from €2.80 billion to €3.32 billion. However, software-licenses revenue declined from €426 million to €316 million.

Operating profit witnessed a climb from €1.68 billion to €2.06 billion, resulting in an operating margin of 27.2%, up from 23.3%.

Analysts’ forecasts were slightly lower than the actual figures. They predicted total revenue of €7.60 billion, cloud revenue of €3.40 billion, operating profit of €1.93 billion, and an operating margin of 25.6%, according to a company-provided consensus on a non-IFRS basis.

SAP, like many other European software companies, presents its financials in two sets of numbers. While the International Financial Reporting Standards (IFRS) forms the basis of one set, which aims to establish a global reporting standard, the other set, which excludes share-based compensation, restructuring expenses, and acquisition-related charges, is more closely followed by analysts and investors.

Looking ahead to 2023, SAP has increased its expectations for non-IFRS operating profit at constant currencies to be between €8.65 billion and €8.95 billion, up from the previous range of €8.6 billion to €8.9 billion. Cloud revenue at constant currencies is now projected to range between €14 billion and €14.2 billion.

Overall, SAP’s strong performance in the second quarter and upward revision of guidance indicate a robust outlook for the company moving forward.

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