A logo on the SAP exhibition space at the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris, France June 15, 2022. REUTERS
FRANKFURT, Oct 22 (Reuters) – Shares in SAP (SAPG.DE), were up 4.4% in Lang & Schwarz pre-market trade on Tuesday after the German software company raised full-year targets on strong cloud business in the third quarter.
Cloud revenue grew 27%, adjusted for currency effects, to 4.35 billion euros ($4.71 billion) in the third quarter, boosted by Cloud ERP Suite resource planning program sales, which increased by 36%.
Artificial intelligence was a key growth driver, according to CEO Christian Klein. “Around 30% of our cloud contracts in the third quarter included AI use scenarios,” he said late on Monday.
Operating profit grew by 28% to 2.24 billion euros, exceeding expectations, due to cost-cutting measures and a comparatively low number of new hires, CFO Dominik Asam said.
The company expects the cost of an ongoing restructuring at around 3 billion euros as it evaluates up to 10,000 of its roughly 100,000 jobs to prepare for the emerging era of AI.
On this basis, the Walldorf-based group raised its full-year cloud and software revenue target to 29.5-29.8 billion euros for the full year instead of 29-29.5 billion euros.
2024 operating profit is now seen at 7.8 billion euros after a previous forecast of 7.6-7.9 billion euros.
Reporting by Hakan Ersan, Writing by Miranda Murray
