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SAP's Q4 Earnings & Revenues Up Y/Y on Cloud Demand, 2025 View Updated
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SAP SE (SAP - Free Report) reported fourth-quarter 2024 non-IFRS earnings per share (EPS) of €1.40, which increased 24% from the year-ago quarter.
Stay up-to-date with all quarterly releases: See ZacksEarnings Calendar.
SAP achieved significant strides in cloud adoption, with half of the fourth-quarter cloud order entries incorporating artificial intelligence (AI) capabilities. This highlights SAP's growing focus on Business AI, which is poised to play a pivotal role in driving revenue growth through 2027. The company expects to continue its transformation journey, aligning with the ambitious goals of its "Ambition 2025" strategy.
Driven by momentum in the cloud business, SAP reported total revenues on a non-IFRS basis of €9.38 billion, which increased 11% year over year (up 10% at constant currency or cc).
Cloud Results
The current cloud backlog — a key indicator of go-to-market success in cloud business — surged 32% (up 29% at cc) to €18.08 billion. As of Dec. 31, 2024, the total cloud backlog was up 43% (up 40% at cc) to €63.29 billion.
On a non-IFRS basis, the Cloud and software segment (88.2% of total revenues) registered revenues of €8.27 billion, rising 12% year over year (up 11% at cc).
Cloud revenues were €4.71 billion, up 27% year over year (both at nominal and cc basis) on a non-IFRS basis, powered by a solid 35% growth in Cloud ERP Suite revenues, reaching €3.95 billion. SAP’s cloud business gained robust momentum across China, France, India, Italy, South Korea and the Netherlands. It remained strong in Canada, Germany, Japan and the United States.
Software licenses and support revenues totaled €3.56 billion, which decreased 3% (down 4% at cc) year over year. Non-IFRS software license revenues of €0.68 billion declined 18% (down 19% at cc) year over year.
Services business (11.8% of total revenues) posted revenues of €1.11 billion, up 2% year over year (both at nominal and cc basis).
Expanding Clientele Bodes Well
Rise with SAP solution was adopted by clients, including BASF, BERNMOBIL, BP International, Brose, Chevron Corporation, Colgate-Palmolive, Conagra Brands, dm-drogerie markt, EY, Ford Motor Company, Fressnapf, Freudenberg, FrieslandCampina, Hannover Medical School, K+S, Lanxess, Menasha Corporation, Mitie, NTPC, NTT DATA, Red Bull, Robert Bosch, Schaeffler Technologies, Schindler Group, The South Carolina Department of Administration, STADA Arzneimittel and voestalpine.
In the reported quarter, Coles Group, Commerz Real, General Motors, H.B. Fuller, Hyundai Glovis, MAHLE International, SKF Group and Trent Limited went live on SAP S/4HANA Cloud.
The "GROW with SAP" solution, which focuses on aiding smaller businesses to adopt cloud ERP solutions quickly and efficiently, saw notable wins from companies like ACTUM Digital, CiboVita, Databricks, Inetum, Medical University of Vienna, msg systems, North Yorkshire Council, Outreach and Warrington Borough Council.
Major global brands across various industries, including ABB, AOK Federal Association, B. Braun Group, Bayer, Digital China, KNAPP, Mengniu, Migros, Mondi, PwC Germany, SA Power Networks, Salling Group, SICK, Unity Programme, Ayala Land, Carlisle Companies, CP Foods, IBM and Tchibo, adopted SAP’s solutions.
Margin Details
Non-IFRS gross profit of €6.97 billion increased 12% from the year-ago quarter (both at normal and cc).
Non-IFRS Cloud gross profit increased 30% year over year to €3.46 billion (up 29% at cc) Non-IFRS Cloud gross margin was 73.5%.
Non-IFRS operating profit of €2.44 billion increased 24% from the year-ago quarter’s figure (both at normal and cc). The uptick is fueled by strong results in SAP's software licenses and support segment, along with the effective execution of the 2024 transformation plan.
SAP reported non-IFRS operating expenses of €6.94 billion, up 7% from the year-ago quarter’s level (up 6% at cc).
Balance Sheet & Cash Flow
As of Dec. 31, 2024, SAP had cash and cash equivalents of €9.609 billion compared with €10 billion as of Sept. 30, 2024.
For the year ended on Dec. 31, 2024, the company generated operating cash of €5.22 billion compared with €6.33 billion in the prior year.
For 2024, free cash flow was €4.113 billion compared with €5.093 billion in 2023.
In May 2023, SAP announced a repurchase program with an aggregate volume of up to €5 billion and an expiry date of Dec. 31, 2025. As of Dec. 31, 2024, SAP repurchased 18,429,480 shares at an average price of €162.46, resulting in payouts of nearly €3 billion under the program.
Financial Outlook and 2025 Ambitions
SAP’s outlook for 2025 updates and replaces its previous Ambition 2025 plan. For 2025, management now anticipates cloud revenues in the range of €21.6-€21.9 billion, suggesting an increase of 26-28% at cc on a year-over-year basis. The prior view was €17.14 billion at cc.
Cloud and software revenues are now expected in the range of €33.1-€33.6 billion, with an increase of 11-13% at cc on a year-over-year basis. The prior view was €29.83 billion at cc.
It now projects 2025 non-IFRS operating profit in the range of €10.3-€10.6 billion, indicating a rise of 26-30% at cc on a year-over-year basis. The prior view was €8.15 billion at cc.
Free cash flow is now estimated to be around €8 billion at actual currencies. Prior view was €4.22 billion.
Seagate Technology Holdings plc (STX - Free Report) reported second-quarter fiscal 2025 non-GAAP earnings of $2.03 per share, beating the Zacks Consensus Estimate by 7.98%. The company reported non-GAAP earnings of 12 cents per share in the year-ago quarter.
In the past year, STX shares has gained 16.8%.
Simulations Plus, Inc. (SLP - Free Report) reported first-quarter fiscal 2025 adjusted earnings of 17 cents per share, which declined 5.6% year over year. The figure, however, missed the Zacks Consensus Estimate of 18 cents per share.
Shares of SLP declined 14.4% in the past year.
BlackBerry (BB - Free Report) reported the third-quarter fiscal 2025 non-GAAP earnings per share (EPS) of 2 cents. The figure was better than the company’s estimate of a loss of 1 cent to EPS of 1 cent. In the year-ago quarter, it reported a non-GAAP EPS of 1 cent.
Shares of BB gained 36.9% in the past year.
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SAP's Q4 Earnings & Revenues Up Y/Y on Cloud Demand, 2025 View Updated
SAP SE (SAP - Free Report) reported fourth-quarter 2024 non-IFRS earnings per share (EPS) of €1.40, which increased 24% from the year-ago quarter.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
SAP achieved significant strides in cloud adoption, with half of the fourth-quarter cloud order entries incorporating artificial intelligence (AI) capabilities. This highlights SAP's growing focus on Business AI, which is poised to play a pivotal role in driving revenue growth through 2027. The company expects to continue its transformation journey, aligning with the ambitious goals of its "Ambition 2025" strategy.
Driven by momentum in the cloud business, SAP reported total revenues on a non-IFRS basis of €9.38 billion, which increased 11% year over year (up 10% at constant currency or cc).
Cloud Results
The current cloud backlog — a key indicator of go-to-market success in cloud business — surged 32% (up 29% at cc) to €18.08 billion. As of Dec. 31, 2024, the total cloud backlog was up 43% (up 40% at cc) to €63.29 billion.
SAP SE Price, Consensus and EPS Surprise
SAP SE price-consensus-eps-surprise-chart | SAP SE Quote
On a non-IFRS basis, the Cloud and software segment (88.2% of total revenues) registered revenues of €8.27 billion, rising 12% year over year (up 11% at cc).
Cloud revenues were €4.71 billion, up 27% year over year (both at nominal and cc basis) on a non-IFRS basis, powered by a solid 35% growth in Cloud ERP Suite revenues, reaching €3.95 billion. SAP’s cloud business gained robust momentum across China, France, India, Italy, South Korea and the Netherlands. It remained strong in Canada, Germany, Japan and the United States.
Software licenses and support revenues totaled €3.56 billion, which decreased 3% (down 4% at cc) year over year. Non-IFRS software license revenues of €0.68 billion declined 18% (down 19% at cc) year over year.
Services business (11.8% of total revenues) posted revenues of €1.11 billion, up 2% year over year (both at nominal and cc basis).
Expanding Clientele Bodes Well
Rise with SAP solution was adopted by clients, including BASF, BERNMOBIL, BP International, Brose, Chevron Corporation, Colgate-Palmolive, Conagra Brands, dm-drogerie markt, EY, Ford Motor Company, Fressnapf, Freudenberg, FrieslandCampina, Hannover Medical School, K+S, Lanxess, Menasha Corporation, Mitie, NTPC, NTT DATA, Red Bull, Robert Bosch, Schaeffler Technologies, Schindler Group, The South Carolina Department of Administration, STADA Arzneimittel and voestalpine.
In the reported quarter, Coles Group, Commerz Real, General Motors, H.B. Fuller, Hyundai Glovis, MAHLE International, SKF Group and Trent Limited went live on SAP S/4HANA Cloud.
The "GROW with SAP" solution, which focuses on aiding smaller businesses to adopt cloud ERP solutions quickly and efficiently, saw notable wins from companies like ACTUM Digital, CiboVita, Databricks, Inetum, Medical University of Vienna, msg systems, North Yorkshire Council, Outreach and Warrington Borough Council.
Major global brands across various industries, including ABB, AOK Federal Association, B. Braun Group, Bayer, Digital China, KNAPP, Mengniu, Migros, Mondi, PwC Germany, SA Power Networks, Salling Group, SICK, Unity Programme, Ayala Land, Carlisle Companies, CP Foods, IBM and Tchibo, adopted SAP’s solutions.
Margin Details
Non-IFRS gross profit of €6.97 billion increased 12% from the year-ago quarter (both at normal and cc).
Non-IFRS Cloud gross profit increased 30% year over year to €3.46 billion (up 29% at cc) Non-IFRS Cloud gross margin was 73.5%.
Non-IFRS operating profit of €2.44 billion increased 24% from the year-ago quarter’s figure (both at normal and cc). The uptick is fueled by strong results in SAP's software licenses and support segment, along with the effective execution of the 2024 transformation plan.
SAP reported non-IFRS operating expenses of €6.94 billion, up 7% from the year-ago quarter’s level (up 6% at cc).
Balance Sheet & Cash Flow
As of Dec. 31, 2024, SAP had cash and cash equivalents of €9.609 billion compared with €10 billion as of Sept. 30, 2024.
For the year ended on Dec. 31, 2024, the company generated operating cash of €5.22 billion compared with €6.33 billion in the prior year.
For 2024, free cash flow was €4.113 billion compared with €5.093 billion in 2023.
In May 2023, SAP announced a repurchase program with an aggregate volume of up to €5 billion and an expiry date of Dec. 31, 2025. As of Dec. 31, 2024, SAP repurchased 18,429,480 shares at an average price of €162.46, resulting in payouts of nearly €3 billion under the program.
Financial Outlook and 2025 Ambitions
SAP’s outlook for 2025 updates and replaces its previous Ambition 2025 plan. For 2025, management now anticipates cloud revenues in the range of €21.6-€21.9 billion, suggesting an increase of 26-28% at cc on a year-over-year basis. The prior view was €17.14 billion at cc.
Cloud and software revenues are now expected in the range of €33.1-€33.6 billion, with an increase of 11-13% at cc on a year-over-year basis. The prior view was €29.83 billion at cc.
It now projects 2025 non-IFRS operating profit in the range of €10.3-€10.6 billion, indicating a rise of 26-30% at cc on a year-over-year basis. The prior view was €8.15 billion at cc.
Free cash flow is now estimated to be around €8 billion at actual currencies. Prior view was €4.22 billion.
SAP’s Zacks Rank
SAP currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Performance of Other Companies
Seagate Technology Holdings plc (STX - Free Report) reported second-quarter fiscal 2025 non-GAAP earnings of $2.03 per share, beating the Zacks Consensus Estimate by 7.98%. The company reported non-GAAP earnings of 12 cents per share in the year-ago quarter.
In the past year, STX shares has gained 16.8%.
Simulations Plus, Inc. (SLP - Free Report) reported first-quarter fiscal 2025 adjusted earnings of 17 cents per share, which declined 5.6% year over year. The figure, however, missed the Zacks Consensus Estimate of 18 cents per share.
Shares of SLP declined 14.4% in the past year.
BlackBerry (BB - Free Report) reported the third-quarter fiscal 2025 non-GAAP earnings per share (EPS) of 2 cents. The figure was better than the company’s estimate of a loss of 1 cent to EPS of 1 cent. In the year-ago quarter, it reported a non-GAAP EPS of 1 cent.
Shares of BB gained 36.9% in the past year.