German behemoth SAP has filed its financial results for the fourth quarter and 2015 and shows higher than expected growth in cloud and S/4HANA for the year and shows a very successful last quarter for cloud.
According to SAP the business had “exceptional momentum in the fourth quarter with fast growth in cloud,” with results for the full year showing cloud and software revenue grew by 20% exceeding the outlook of 8% growth.
New cloud bookings, increased 103% in the full year to €883 million and 75% in the fourth quarter to €344 million with revenue from cloud subscriptions and support revenue rising to €2.30 billion with operating profit at €6.35 billion ahead of its outlook of €5.6 billion.
Most of the new cloud growth for SAP in the fourth quarter was from Europe and the Middle East and the Americas. With the EMEA region showing a 53% increase in cloud and support revenue in the fourth quarter, with “very strong” double-digit growth in new cloud bookings. The Americas region saw cloud subscriptions and support revenue grow by 89% with new cloud bookings growing in double-digits.
The APJ region was back to solid double-digit growth in the fourth quarter with non-IFRS cloud and software growth of 18% including strong double-digit software revenue growth in Australia and India. Non-IFRS cloud subscriptions and support revenue in APJ grew 55%. The Company saw exceptional momentum in new cloud bookings and grew in triple-digits.
Adoption of SAP S/4HANA continues to accelerate sharply, with more than 2,700 customers across all regions and industries at the end of 2015, more than doubling quarter over quarter. SAP also flags up growth for their SuccessFactors Employee Central which has hit 1,000 customers in the fourth quarter and new cloud bookings for Customer Engagement and Commerce saw triple-digit growth in full year 2015.
SAP’s recent cloud purchases are also doing well for the business. The Business Network Group – which comprises Ariba, Fieldglass and Concur purchases – saw cloud bookings for the business network increasing 187% in the full year to €309 million. Additionally SAP also revealed that two million companies trade over $740 billion of commerce on the Ariba network, more than 32 million end users process travel and expenses with Concur, and over 1.9 million flexible workers are managed through its Fieldglass platform.
Commenting on the rise in HANA customers and the general results CEO, Bill McDermott, said."Our strength in 2015 shows that the S/4HANA innovation cycle is well underway."
Adding, "Our completeness of vision in the cloud has distinguished SAP from both legacy players and point solution providers. We beat on cloud and software, we beat on operating income and we are ever confident that SAP will remain a profitable growth business well into the future."
FULL YEAR 2015
|Full Year 2015|
|€ million, unless otherwise stated||FY 2015||FY 2014||% change||FY 2015||FY 2014||% change||% change const. curr.|
|New cloud bookings||883||436||103||N/A||N/A||N/A||N/A|
|Cloud subscriptions and support||2,286||1,087||110||2,296||1,101||109||82|
|Software licenses and support||14,931||13,228||13||14,933||13,233||13||6|
|Cloud and software||17,218||14,315||20||17,229||14,334||20||12|
|Profit after tax||3,061||3,280||–7||4,505||4,182||8|
All figures are unaudited.
Looking ahead SAP expects the growth in cloud to continue with expected full year 2016 non-IFRS cloud subscriptions and support revenue to be in a range of €2.95 - €3.05 billion at constant currencies and 2017 to grow still further €3.8 - €4.0 billion a 2015 to 2017 CAGR of 32%. As CFO, Luka Mucic explains the reasons behind their bullish figures. “We have transformed our company and made it leaner by shifting investments from noncore activities to strategic growth areas enabling us to capture the tremendous growth opportunities in the market. This puts us on a strong path for the future reflected in an increase of our 2017 ambition.”