DAX heavyweight SAP reported on a successful third quarter on Wednesday evening after the US stock market closed. Thanks to robust demand, the Walldorf-based group's growth in the important cloud division has accelerated somewhat again. SAP increased sales in the three months to the end of September by a total of 13 percent to 10.3 billion euros.
Cloud software alone generated 26 percent more revenue. Experts on the capital market pay particular attention to this forward-looking indicator because it largely provides conclusions about future sales development. The operating result (EBIT) adjusted for special effects climbed by 18 percent to 3.03 billion euros. That was also more than expected. The bottom line is that profits grew by eleven percent to 2.27 billion euros.
The numbers were pleasing, so the share depositary receipts (ADS) traded in New York initially rose by around four percent, but were unable to maintain these initial gains. In the DAX, however, the share was unable to continue the positive New York trend in the early afternoon in a weaker overall market environment and instead fell slightly.
"An excellent quarter"
Specifically, CEO Christian Klein became a little more confident than recently about cloud revenue for the year as a whole. Customers continued to invest heavily in the company's AI offerings. As in the previous quarter, the volume of cloud orders grew by 26 percent on a currency-adjusted basis to 24.1 billion euros. Sales in this division rose by 25 percent to 6.67 billion euros and slightly exceeded market expectations.
Klein expects cloud revenues to reach the upper end of the forecast range of 23 to 25 percent growth after adjusting for currency effects. As a result, the total revenue from cloud products and conventional software licenses will also develop more favorably than previously thought. Klein spoke of an “excellent third quarter”.
For the first time, SAP exceeded ten billion euros in sales revenue and more than three billion euros in adjusted operating profit in one quarter, said CFO Asam. But he also referred to the important fourth quarter and dampened the euphoria somewhat. SAP usually receives around half of the bookings for the entire year in the final quarter - a bad mood could weigh on the numbers and also mean a lower path for the coming year.
Corporate restructuring is paying off
A main reason for the successful development at SAP is that things are going smoothly with the pivot to cloud software that Klein intensified years ago. He also relies on the effects of artificial intelligence. New in-house AI agents are increasingly guiding customers through the products.
Investors recently worried that in-house software could be replaced easily and cheaper by freely available, AI-generated products - which not only caused problems for SAP shares, but also for papers across the entire industry. These worries have increasingly evaporated, as AI no longer seems to be a threat, but more and more a tool that helps.
The share has therefore made up a lot of ground since the end of July, after previously slipping significantly. Since its low in July at under 130 euros, SAP shares have now gained more than half again. Most recently, the price mark of 200 euros was exceeded again in the DAX.
DAX gives back gains from the previous day
After the advances of the previous day, prices on the stock market are going downhill again today. The main reason is the weakly received quarterly figures from the technology sector from giants such as Tesla, Meta and IBM from the evening before. Well-known concerns about high oil prices and rising bond yields are also resurfacing. French ten-year government bonds are trending significantly weaker and are yielding a new high of 5.10 percent.
“The quarterly reports from Tesla, Meta, IBM and SAP are not enough to consolidate confidence in the technology sector and especially in the chip sector,” wrote stock market newsletter author Hans Bernecker. The day before, billions in profits from the space and AI company SpaceX had only temporarily alleviated the recent worries.
