SAP Revenue Falls in Latest Quarter

SAP SE (NYSE:SAP) reported around 4% year-over-year drop in revenue for the third quarter and lowered its revenue outlook for the year.

The German-based company reported Current Cloud Backlog of €6.6 Billion, Up 16% At Constant Currencies

Its IFRS Cloud Gross Margin Up 1.8pp; Non-IFRS Cloud Gross Margin Up 0.7pp At Constant Currencies. IFRS Operating Margin Down 2.2pp; Non-IFRS Operating Margin Up 1.3pp At Constant Currencies On Strong Prior Year Comparison

IFRS Earnings Per Sshare were up 26%; Non-IFRS EPS were up 31%

Operating Cash Flow Up 54%, Free Cash Flow Up 79% Year-To-Date. Updates 2020 Outlook and Mid-Term Ambition

Targeting Significant Expansion of Cloud Revenue to More than €22 Billion, Share of More Predictable Revenue of Approximately 85%, Non-IFRS Cloud Gross Margin of Approximately 80% by 2025.

Targeting Double-Digit Non-IFRS Operating Profit Growth from 2023 to 2025

CEO Christian Klein said, “COVID-19 has created an inflection point for our customers. The move to the cloud combined with a true business transformation has become a must for enterprises, to gain resiliency and position them to emerge stronger out of the crisis.

“Together with our customers and partners we will co-innovate and reinvent how businesses run in a digital world. SAP will accelerate growth in the cloud to more than €22 billion in 2025 and expand the share of more predictable revenue to approximately 85%.”

SAP shares retreated $32.23, or 21.5%, to $117.45.