WALLDORF — SAP SE (NYSE: SAP) today announced its financial results for the third quarter 2020 ended September 30, 2020.
Strong Double-Digit Growth in EPS and Cash Flow
SAP Accelerates Transition to Cloud, Targets More than €22 Billion
in Cloud Revenue by 2025
- Current Cloud Backlog of €6.6 Billion, Up 16% At Constant Currencies
- 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 EPS Up 26%; Non-IFRS EPS 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
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%.
Christian Klein, CEO
In Q3 we continued to improve our operating margin against a strong prior year comparison amidst a challenging environment. Earnings per share and cash flow grew even more rapidly. This allows us to raise our 2020 free cash flow outlook even beyond the target communicated last November. Our expedited move to the cloud will ensure we continue our path as a cloud growth company while we remain focused on cost efficiency. These actions and our resilient business model position us well to meet our new ambition targets as uncertainty recedes.
Luka Mucic, CFO