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SAP loses money as its cloud dependence rises

by on25 April 2017

Core profit drops

The expensive esoteric software outfit which makes management software which no one is really sure quite what it does, but the CEO thinks they need it, reported slightly lower-than-expected first-quarter core profit.

SAP sold more of its cloud products, which are less profitable than the full fat version which does.... er something else.

First-quarter operating profit, excluding special items, for the German software maker rose eight percent to 1.198 billion euro the company said.

That was slightly below the average of 1.229 billion euro which Wall Street analysts expected..

Revenues rose 12 percent to 5.285 billion euros, which was above average expectations of 5.179 billion.

SAP's customer base moved further to newer cloud-based and less profitable internet platforms from classic high-margin packaged software products it has sold for decades.

New cloud bookings jumped 49 percent to 215 million euro during the first quarter.

SAP's finance chief Luka Mucic said in a statement that his firm continued its rapid expansion in cloud.

"We're off to a good start to reach our full-year targets and we are confident that we will grow our profitability in 2018 and beyond."

SAP said it still expects revenue for 2017 of 23.2 to 23.6 billion euro, while operating profit is seen at 6.8-7.0 billion euro, both at constant currencies.

Last modified on 25 April 2017
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