SAP in Newtown Square Ups Outlook as More Companies Switch IT to Cloud

Image via SAP.

Things are looking good at the German business software group SAP as more companies swith their IT operations to the cloud,  w rites Supantha Mukherjee for Reuters.

SAP, with its American headquarters in Newtown Square, raised its full-year outlook for a third time based on a strong showing in the third quarter.

“We see record adoption of our applications and our platform,” Chief Executive Officer Christian Klein said in a statement. “This has resulted in strong acceleration of our cloud growth.”

SAP expects cloud revenue to grow by 16 to 19 percent in the year. That means estimated gains of 2 to 4 percent in tis overall cloud and software revenue.

The software company is moving to subscription-based cloud services, away from software licenses with upfront fees.

It launched Rise with SAP, an all-in-one digital transformation package, in January.

Operating profit is expected to stay the same or drop 2 percent for the year. That’s actually an improvement from a previous forecast that showed it staying the same to dropping 4 percent.

Adjusted revenue rose 5 percent to 6.68 billion euros ($7.70 billion) for the third quarter ended Sept. 30. 

Adjusted earnings per share rose 2 percent to 1.74 euros.

Read more at Reuters about SAP’s boost from increased cloud shift.