Trade war and economic issues in Asia held down SAP’s results for the second quarter ended June 30. But in his usual cheerleading fashion, CEO Bill McDermott this week dismissed the impact as a blip.

“The pipeline is Asia is the highest it has been,” McDermott said during the earning’s webcast for the quarter. “Whatever didn’t happen, will happen.” That means he viewed the problem as primarily deals slipping into the future. Revenue for the most recently ended period hit about $7.47 billion, an 11-percent increase over a year ago. Cloud and software revenue of $6.19 billion was up 1 percent over last year’s corresponding period.  Operating profit dropped to $931.2 million, down 27 percent and aftertax profit of roughly $665.4 million, off 19 percent, both on an IFRS basis. However, on a non-IFRS basis operating profit rose 11 percent to approximately $2.05 billion and after-tax profit reached roughly $1.48 billion, up 12 percent. The difference on the IFRS side was equity-based compensation, which was impacted by acquisition, and by the fact that more German workers than anticipated accepted voluntary retirement.  On an IFRS bases, cloud and software revenue increased to about $6.19 billion, an increase of 11 percent. McDermott noted the company plans to continue adding to its sales force with that countered by reduction in G&A, which he said is possible because of the impact of S/4 Hana. He predicted there will be an increase in revenue per employee.

Last modified on Friday, 19 July 2019
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