SAP Beats On Q2 Earnings, Raises FY21 Cloud & Software Revenue Outlook

SAP SE (NYSE: SAP) reported a second-quarter FY21 revenue decline of 1% year-on-year to €6.67 billion at par with the analyst consensus of €6.7 billion.

• The current cloud backlog increased 17% Y/Y to €7.77 billion.
• Cloud revenue grew 11% Y/Y to €2.28 billion; S/4HANA cloud revenue rose 33% Y/Y to €257 million, and Software licenses and support revenue decreased 5% Y/Y to €3.5 billion.
• Cloud and software revenue rose 1% Y/Y to €5.75 billion, while Services revenue declined 11% Y/Y to €0.92 billion.
• Segment revenue in AT&S was flat at € 5.62 billion, Qualtrics segment revenue increased 25% Y/Y to €211 million, and Services segment revenue declined 7% Y/Y to €796 million.
• Non-GAAP operating margin contracted 30 basis points to 28.8%.
• Non-GAAP EPS was €1.75, beat the analyst consensus by €0.58.
• SAP generated €3.77 billion in operating cash flow during the six months ended Jun. 30.
• SAP saw strong adoption of its cloud portfolio as customers select SAP for their business transformation.
• Outlook: SAP raised FY21 outlook for cloud revenue in constant currencies from €9.2 billion– €9.5 billion to €9.3 billion – €9.5 billion.
•  The company increased the Cloud and software revenue at constant currencies outlook from €23.4 billion – €23.8 billion to the new range of €23.6 billion – €24.0 billion.
• It continues to expect an operating cash flow of €6.0 billion.
• Price action: SAP shares traded lower by 3.10% at $139.64 in the premarket session on the last check Wednesday.