SAP Reports Strong Q3 2024 Results, Raises Outlook Amid AI Integration

SAP's Q3 2024 Performance Highlights

SAP SE has reported strong financial results for the third quarter of 2024, demonstrating significant growth in cloud revenue and progress in AI integration. The company's CEO, Christian Klein, expressed confidence in raising the 2024 financial outlook, citing remarkable development in cloud revenue growth, particularly for the Cloud ERP Suite 1

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Key financial highlights for Q3 2024 include:

• Current cloud backlog grew by 25% to €15.7 billion (29% at constant currencies)
• Cloud revenue increased by 25% to €4.35 billion (27% at constant currencies)
• Cloud ERP Suite revenue rose by 34% to €3.64 billion (36% at constant currencies)
• Total revenue was up 9% to €8.47 billion (10% at constant currencies)
• IFRS operating profit increased by 29% to €2.21 billion
• Non-IFRS operating profit grew by 27% to €2.24 billion (28% at constant currencies)

The share of more predictable revenue increased by 2 percentage points to 84% in the third quarter 2

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AI Integration and Business Innovations

SAP reported significant progress in Business AI, with groundbreaking innovations such as the SAP Knowledge Graph. The company noted that a substantial portion of cloud deals in Q3 included AI use cases, indicating growing adoption of AI technologies among its customers 1

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2024 Transformation Program

SAP's CFO, Dominik Asam, highlighted that the 2024 transformation program has already begun to yield efficiency improvements. This has allowed the company to deliver strong operating profit and free cash flow while maintaining topline momentum 2

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The transformation program, announced in January, aims to increase focus on key strategic growth areas, particularly business AI. It involves a company-wide restructuring expected to affect 9,000 to 10,000 positions, with a majority covered by voluntary leave programs and internal re-skilling measures 1

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Financial Outlook and Share Repurchase Program

SAP has raised its 2024 outlook for cloud and software revenue, operating profit, and free cash flow. The company continues to execute its share repurchase program, which was announced in September 2022 with an aggregate volume of up to €5 billion. As of September 30, 2024, SAP had repurchased 16,709,250 shares at an average price of €157.94, resulting in a purchased volume of approximately €2.64 billion 1

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Executive Board Changes

On October 19, 2024, SAP announced that Chief Technology Officer and Executive Board Member Dr. Juergen Mueller would leave the company's Executive Board, effective October 31, 2024 1

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As SAP continues to focus on AI integration and cloud services, these Q3 results demonstrate the company's strong position in the enterprise software market and its commitment to innovation in the face of a rapidly evolving technological landscape.