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SAP Set to Report Q2 Earnings: Here's What You Should Know
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SAP SE (SAP - Free Report) is slated to report second-quarter 2024 results on Jul 22.
The Zacks Consensus Estimate for revenues is pegged at $8.86 billion, implying an improvement of 8.4% from the year-ago quarter. The consensus mark for earnings is pegged at $1.01 per share, indicating a year-over-year decline of 11.4%.
SAP delivered first-quarter 2024 non-IFRS earnings per share (EPS) of €0.81, which increased 8% year over year. The company reported total revenues on a non-IFRS basis of €8.04 billion, which increased 8% year over year (up 9% at constant currency or cc).
SAP’s performance in the to-be-reported quarter is expected to have benefited from strengthening cloud business. In the last reported quarter, the current cloud backlog — a key indicator of go-to-market success in cloud business — increased 27%.
Our estimate for cloud revenues (on a non-IFRS basis) for the second quarter is pegged at €4.04 billion, up 21.7% from the year-ago quarter.
Rapid adoption of Rise with SAP solution is one of the major drivers of cloud business. This solution helps companies transform business processes and operations to become more nimble, digital and intelligent. In the second quarter of 2024, Rise with SAP was selected by SKF, Mahle Group, RHI Magnesita and Roca Group, among others.
Rise with SAP solution continues to gain significant traction and will aid the company in expanding its market share in the cloud enterprise resource planning (ERP) solutions space. In the last reported quarter, Cloud ERP Suite revenues were up 31% year over year.
The company is anticipated to have gained from growing momentum in the recently launched Grow with SAP solution. Grow with SAP is designed especially for midsize customers to adopt cloud ERP and boost speed and predictability while fostering innovation.
Momentum in SAP’s business technology platform, particularly S/4HANA solutions, augurs well. More companies have begun deploying S/4HANA solutions partly or entirely in the cloud.
However, the company’s performance is affected by continued softness in the Software license and support business segment coupled with global macroeconomic weakness and geopolitical instability.
Our estimate for Software license and support business revenues (on a non-IFRS basis) for the second quarter is pegged at €2.98 billion, which is down 6.5% from the year-ago quarter.
Also, increasing research & development costs and stiff competition in the cloud space are concerns.
Recent Key Highlights
On Jun 5, 2024, SAP announced that it was set to acquire Israel-based WalkMe in an all-cash deal. The executive and supervisory boards of SAP, along with the board of directors of WalkMe, had approved the transaction for $14 per share (a 45% premium to WalkMe’s closing share price on Jun 4), bringing the total equity value to $1.5 billion.
The acquisition, which is subject to customary closing conditions and regulatory clearances, is expected to close in the third quarter of 2024. The buyout is unlikely to have any material impact on SAP’s non-IFRS EPS. Headquartered in Tel Aviv, WalkMe specializes in digital adoption platforms innovations. WalkMe aids business organizations to bolster enterprise productivity and lower risk by ensuring responsible and efficient adoption of software and the workflows powered by its platform.
On the same day, SAP announced changes to its dividend policy, which involves paying dividends amounting to at least 40% of SAP’s non-IFRS profit after tax from continuing operations. Earlier, the company policy was to pay at least 40% of the group’s IFRS profit after tax as a dividend.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for SAP this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.
SAP has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks you may consider, as our model shows that these have the right combination of elements to beat on earnings this season.
The Zacks Consensus Estimate for NOK’s to-be-reported quarter’s earnings and revenues is pegged at 5 cents per share and $5.29 billion, respectively. Shares of NOK have gained 1.8% in the past year.
Badger Meter (BMI - Free Report) has an Earnings ESP of +1.18% and presently carries a Zacks Rank #1. BMI is scheduled to report quarterly numbers on Jul 19.
The Zacks Consensus Estimate for BMI’s to-be-reported quarter’s earnings and revenues is pegged at 98 cents per share and $200.9 million, respectively. Shares of BMI have risen 34% in the past year.
Northern Trust Corporation (NTRS - Free Report) has an Earnings ESP of +1.56% and a Zacks Rank #2. NTRS is scheduled to report quarterly figures on Jul 17.
The Zacks Consensus Estimate for NTRS’ to-be-reported quarter’s earnings and revenues is pegged at $1.75 per share and $1.85 billion, respectively. Shares of NTRS have increased 28.1% in the past year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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SAP Set to Report Q2 Earnings: Here's What You Should Know
SAP SE (SAP - Free Report) is slated to report second-quarter 2024 results on Jul 22.
The Zacks Consensus Estimate for revenues is pegged at $8.86 billion, implying an improvement of 8.4% from the year-ago quarter. The consensus mark for earnings is pegged at $1.01 per share, indicating a year-over-year decline of 11.4%.
SAP delivered first-quarter 2024 non-IFRS earnings per share (EPS) of €0.81, which increased 8% year over year. The company reported total revenues on a non-IFRS basis of €8.04 billion, which increased 8% year over year (up 9% at constant currency or cc).
SAP SE Price and EPS Surprise
SAP SE price-eps-surprise | SAP SE Quote
Factors to Note
SAP’s performance in the to-be-reported quarter is expected to have benefited from strengthening cloud business. In the last reported quarter, the current cloud backlog — a key indicator of go-to-market success in cloud business — increased 27%.
Our estimate for cloud revenues (on a non-IFRS basis) for the second quarter is pegged at €4.04 billion, up 21.7% from the year-ago quarter.
Rapid adoption of Rise with SAP solution is one of the major drivers of cloud business. This solution helps companies transform business processes and operations to become more nimble, digital and intelligent. In the second quarter of 2024, Rise with SAP was selected by SKF, Mahle Group, RHI Magnesita and Roca Group, among others.
Rise with SAP solution continues to gain significant traction and will aid the company in expanding its market share in the cloud enterprise resource planning (ERP) solutions space. In the last reported quarter, Cloud ERP Suite revenues were up 31% year over year.
The company is anticipated to have gained from growing momentum in the recently launched Grow with SAP solution. Grow with SAP is designed especially for midsize customers to adopt cloud ERP and boost speed and predictability while fostering innovation.
Momentum in SAP’s business technology platform, particularly S/4HANA solutions, augurs well. More companies have begun deploying S/4HANA solutions partly or entirely in the cloud.
However, the company’s performance is affected by continued softness in the Software license and support business segment coupled with global macroeconomic weakness and geopolitical instability.
Our estimate for Software license and support business revenues (on a non-IFRS basis) for the second quarter is pegged at €2.98 billion, which is down 6.5% from the year-ago quarter.
Also, increasing research & development costs and stiff competition in the cloud space are concerns.
Recent Key Highlights
On Jun 5, 2024, SAP announced that it was set to acquire Israel-based WalkMe in an all-cash deal. The executive and supervisory boards of SAP, along with the board of directors of WalkMe, had approved the transaction for $14 per share (a 45% premium to WalkMe’s closing share price on Jun 4), bringing the total equity value to $1.5 billion.
The acquisition, which is subject to customary closing conditions and regulatory clearances, is expected to close in the third quarter of 2024. The buyout is unlikely to have any material impact on SAP’s non-IFRS EPS. Headquartered in Tel Aviv, WalkMe specializes in digital adoption platforms innovations. WalkMe aids business organizations to bolster enterprise productivity and lower risk by ensuring responsible and efficient adoption of software and the workflows powered by its platform.
On the same day, SAP announced changes to its dividend policy, which involves paying dividends amounting to at least 40% of SAP’s non-IFRS profit after tax from continuing operations. Earlier, the company policy was to pay at least 40% of the group’s IFRS profit after tax as a dividend.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for SAP this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.
SAP has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks you may consider, as our model shows that these have the right combination of elements to beat on earnings this season.
Nokia (NOK - Free Report) has an Earnings ESP of +24.14% and currently sports a Zacks Rank #2. NOK is scheduled to report quarterly earnings on Jul 18. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for NOK’s to-be-reported quarter’s earnings and revenues is pegged at 5 cents per share and $5.29 billion, respectively. Shares of NOK have gained 1.8% in the past year.
Badger Meter (BMI - Free Report) has an Earnings ESP of +1.18% and presently carries a Zacks Rank #1. BMI is scheduled to report quarterly numbers on Jul 19.
The Zacks Consensus Estimate for BMI’s to-be-reported quarter’s earnings and revenues is pegged at 98 cents per share and $200.9 million, respectively. Shares of BMI have risen 34% in the past year.
Northern Trust Corporation (NTRS - Free Report) has an Earnings ESP of +1.56% and a Zacks Rank #2. NTRS is scheduled to report quarterly figures on Jul 17.
The Zacks Consensus Estimate for NTRS’ to-be-reported quarter’s earnings and revenues is pegged at $1.75 per share and $1.85 billion, respectively. Shares of NTRS have increased 28.1% in the past year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.