Shares of SAP rose 4.4% in premarket trading at Lang & Schwarz on Tuesday after the German software company raised its full-year targets due to strong cloud business in the third quarter.
Third-quarter cloud revenue rose 27% on a currency-neutral basis to 4.35 billion euros ($4.71 billion), with revenue from its Cloud ERP Suite resource planning program increasing 36%.
Artificial intelligence was an important growth driver, according to CEO Christian Klein. “Around 30% of our cloud contracts in the third quarter included AI usage scenarios,” he said late Monday evening.
Operating profit grew 28% to 2.24 billion euros, exceeding expectations, due to cost-cutting measures and a comparatively low number of new hires, said Chief Financial Officer Dominik Asam.
The company expects costs of around 3 billion euros for an ongoing restructuring that will involve reviewing up to 10,000 of the approximately 100,000 jobs to prepare for the emerging era of AI.
On this basis, the Walldorf-based group raised its sales target for the full year in the cloud and software area to 29.5-29.8 billion euros instead of 29-29.5 billion euros.
Operating profit for 2024 is now seen at 7.8 billion euros, down from a previous forecast of 7.6-7.9 billion euros.
($1 = 0,9243 Euro)
