Back to top

Analyst Blog

SAP AG (SAP - Analyst Report) reported fourth-quarter non-IFRS earnings per share of €1.11 ($1.62), which increased 20.6% year over year and surpassed the Zacks Consensus Estimate of $1.59 a share by 1.9%. The company’s flagship innovation, SAP HANA, continued to be a growth driver along with its cloud business, Ariba.

Total revenue generated in the fourth quarter of 2013 was €5.1 billion ($6.9 billion), up 7% year over year at constant currency. Revenues were in line with the Zacks Consensus Estimate of $6.9 billion.

Revenues by Segment

Software & Could Subscriptions: This segment includes Software and Maintenance revenues.  The segment garnered revenues of €2.1 billion ($2.8 billion) in the quarter, up 6% year over year at constant currency.

Support Revenues: The segment reported revenues of €2.3 billion ($3.1 billion), up 10% year over year at constant currency.

Software and Software-Related Service Revenues: This sub-segment includes Support, Subscription and other software-related services revenues. Revenues in this segment grew 8% year over year to €4.4 billion ($5.9 billion).

Revenues by Region

The EMEA region reported high single-digit growth, with non-IFRS software and cloud subscription revenue increasing 9% at constant currencies. This increase was primarily driven by high double-digit growth in cloud subscription and support revenue across the region and strong double-digit software revenue growth at constant currencies in Germany, France, Russia, Middle East and Africa.

Non-IFRS software and cloud subscription revenue in the Asia Pacific Japan (APJ) region continued its trend of double-digit growth at constant currencies, driven by a strong performance in China.

The Americas region saw single-digit revenue growth at constant currencies in the fourth quarter in the non-IFRS software and cloud subscription segment. This was the result of the transition to the cloud and a tough year-over-year comparison in software revenue.

Cash and Balance Sheet

Operating profit grew 15% year over year to €2.1 billion ($2.8 billion) in the quarter.

Operating cash flow was €3.83 billion ($5.2 billion), increasing marginally year-over-year while free cash flow was €3.27 billion ($4.6 billion) decreasing slightly year-over-year. Free cash flow was 19% of total revenue and cash and cash equivalents grew 31.4% year over year to €3.3 billion ($4.5 billion).


Concurrent with the earnings release, management provided guidance for fiscal 2014.

The company expects full year 2014 non-IFRS cloud subscription and support revenues to be in the range of €950 to €1,000 million, at constant currencies. The upper end of this range represents a growth rate of 32%. 

The company expects full-year 2014 non-IFRS software and software-related service revenue to increase by 6%– 8% at constant currency and full-year 2014 non-IFRS operating profit to be in the range of €5.8 billion to €6.0 billion at constant currency.

This apart, the company also provided mid-term 2014 guidance. SAP expects the combination of a stable, highly-profitable core and fast-growing cloud business to deliver continued growth and margin expansion. The company aims to further increase its total revenue to at least €20 billion and total revenue from its cloud business including cloud-related professional services to approximately €2 billion by 2015.

SAP currently holds a Zacks Rank #3 (Hold). Better-ranked stocks in the sector include American Software, Inc. (AMSWA), CA Technologies (CA - Analyst Report), both carrying a Zacks Rank #1 (Strong Buy) and Concur Technologies Inc. (CNQR - Analyst Report) carrying a Zacks Rank #2 (Buy). 


Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UNITED THER… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%