SAP posted fourth-quarter 2020 non-IFRS earnings, which fell -7% year-over-year to €1.69 per share ($2.02). The Zacks Consensus Estimate for earnings was $2.00.
The software company’s revenues fell -6% from the year-ago quarter to €7.541 billion ($8.993 billion), (down 2% constant currency or cc). The Zacks Consensus Estimate was $9.09 billion.
Cloud revenues rose +7% year-over-year to €2.04 billion on a non-IFRS basis (up +13% at cc).
Software licenses revenues of €4.54 billion fell -8% year-over-year (down 4% at cc) year over year.
Cloud revenues related to Software as a Service (SaaS)/Platform as a Service (PaaS) increased +13% at cc to €1.937 billion. Cloud revenues related to Infrastructure as a Service (IaaS) climbed +17% year over year at cc to €224 million.
The company’s services business (accounting for 12.7% of total revenues) generated revenue of €960 million, down -20% year-over-year (down -16% at cc).
Looking ahead, SAP expects to benefit from “expedited shift to the cloud” in 2021. The company believes that the COVID-19 crisis impacts will start to decrease due to vaccine roll outs, and that will lead to "gradual improvement” in demand environment in the second half of 2021.
The company predicts cloud revenues to range between €9.1 billion to €9.5 billion on a non-IFRS basis, (+13%-+18% at cc.). It projects non-IFRS cloud and software revenues in the range of €23.3 billion to €23.8 billion (flat to up 2% at cc). Non-IFRS operating profit at cc is forecast in the range of €7.8 billion to €8.2 billion (down 1% to 6% at cc.).