BERLIN, July 19 (Xinhua) -- SAP raised its revenue forecast for the second time in 2018 on Thursday as its cloud-computing division continued to grow rapidly during the second quarter (Q2) of the year.
The Walldorf-based software corporation recorded gross earnings of 1.21 billion euros (1.4 billion U.S. dollars) from cloud subscriptions and related support services in Q2, up by 30 percent compared with the same period last year. The share of total SAP revenue accounted for by the cloud-computing division and other software support services rose by two percentage points to 66 percent.
In Q1, proceeds from rented online software had already grown by 31 percent to break the mark of one billion euros for the first time in corporate history. The continuation of this upward trend in Q2 enabled the Dax-listed company to compensate for negative currency effects and achieve a greater than anticipated increase in gross revenue of 4 percent to 6 billion euros.
The company hereby also benefited from a one-off effect of switching its accounting method to the IFRS15 standard at the start of the year. Overall, operating profits increased by 4 percent to 1.64 billion euros and were thus roughly in line with analysts' prior expectations. Net profits in Q2 were measured at 720 million euros (plus eight percent) while the operating margin increased slightly to 27.3 percent.
SAP has invested heavily in new forms of business software which can be rented online through the cloud as opposed to its traditional licensed proprietary software products. The German company has recently been able to outperform U.S. rivals such as Oracle and Salesforce in the buoyant cloud market and believes that it can succeed in sustaining the current growth trajectory within the coming years.
Founded in 1972, SAP had a gross annual revenue of 23.4 billion euros in 2017. (1 euro=1.16 U.S. dollar)
