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SAP Set to Report Q2 Earnings: Here's What You Should Know
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SAP SE (SAP - Free Report) is slated to report second-quarter 2023 results on Jul 20.
The Zacks Consensus Estimate for revenues is pegged at $8.38 billion, implying an improvement of 4.6% from the year-ago quarter’s reported figure. The consensus mark for earnings is pegged at $1.26 per share, indicating a year-over-year increase of 23.5%.
SAP reported first-quarter 2023 non-IFRS earnings of €1.08 ($1.16) per share, up 8% from the year-ago quarter’s levels. Driven by strength in cloud business, SAP reported total revenues, on a non-IFRS basis, of €7.441 billion ($7.983 billion), increasing 10% year over year (up 9% at constant currency or cc).
SAP’s performance in the to-be-reported quarter is likely to have benefited from continued momentum in cloud business. In the last reported quarter, the current cloud backlog — a key indicator of go-to-market success in cloud business — increased 25%.
SAP’s cloud efforts have received a major push from rapid adoption of Rise with SAP solution. This solution helps companies to transform their business processes and operations to become more nimble, digital and intelligent. RISE with SAP solution continues to gain significant traction and will aid the company drive its market share in the cloud ERP solutions’ space.
SAP is also likely to have benefited from the growing momentum in SAP Business Technology Platform, and SAP Ariba and SAP Signavio solutions.
Apart from that, frequent product launches are likely to have boosted the top line. In March, the company announced the launch of Grow with SAP. The new offering is designed especially for midsize customers to adopt cloud ERP, and boost speed and predictability while fostering innovation.
The company’s restructuring plan is expected to better align its operating model and go-to-market approach with its accelerated cloud transformation. As part of increasing focus on cloud operations, SAP completed the earlier-announced sale of its entire stake in Qualtrics to Silver Lake and Canada Pension Plan Investment Board in June 2023. SAP had acquired Qualtrics in 2019.
However, global macroeconomic weakness, geopolitical instability and continued softness in software licenses are major headwinds for SAP. Stiff competition in the cloud space, and increasing research & development and sales & marketing expenses are added concerns.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for SAP this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
SAP has an Earnings ESP of -3.18% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks you may consider as our model shows that these have the right combination of elements to beat on earnings this season.
The Zacks Consensus Estimate for CDNS’ to-be-reported quarter’s earnings and revenues is pegged at $1.18 per share and $973.2 million, respectively. Shares of CDNS have gained 55.3% in the past year.
Tyler Technologies (TYL - Free Report) has an Earnings ESP of +0.54% and presently carries a Zacks Rank #1. TYL is scheduled to report quarterly numbers on Jul 26.
The Zacks Consensus Estimate for TYL’s to-be-reported quarter’s earnings and revenues is pegged at $1.86 per share and $490.7 million, respectively. Shares of TYL have improved 20.8% in the past year.
Visa (V - Free Report) has an Earnings ESP of +0.26% and a Zacks Rank #2. V is scheduled to report quarterly figures on Jul 25.
The Zacks Consensus Estimate for V’s to-be-reported quarter’s earnings and revenues is pegged at $2.10 per share and $8.05 billion, respectively. Shares of V have increased 17.3% in the past year
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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SAP Set to Report Q2 Earnings: Here's What You Should Know
SAP SE (SAP - Free Report) is slated to report second-quarter 2023 results on Jul 20.
The Zacks Consensus Estimate for revenues is pegged at $8.38 billion, implying an improvement of 4.6% from the year-ago quarter’s reported figure. The consensus mark for earnings is pegged at $1.26 per share, indicating a year-over-year increase of 23.5%.
SAP reported first-quarter 2023 non-IFRS earnings of €1.08 ($1.16) per share, up 8% from the year-ago quarter’s levels. Driven by strength in cloud business, SAP reported total revenues, on a non-IFRS basis, of €7.441 billion ($7.983 billion), increasing 10% year over year (up 9% at constant currency or cc).
SAP SE Price and EPS Surprise
SAP SE price-eps-surprise | SAP SE Quote
Factors to Note
SAP’s performance in the to-be-reported quarter is likely to have benefited from continued momentum in cloud business. In the last reported quarter, the current cloud backlog — a key indicator of go-to-market success in cloud business — increased 25%.
SAP’s cloud efforts have received a major push from rapid adoption of Rise with SAP solution. This solution helps companies to transform their business processes and operations to become more nimble, digital and intelligent. RISE with SAP solution continues to gain significant traction and will aid the company drive its market share in the cloud ERP solutions’ space.
SAP is also likely to have benefited from the growing momentum in SAP Business Technology Platform, and SAP Ariba and SAP Signavio solutions.
Apart from that, frequent product launches are likely to have boosted the top line. In March, the company announced the launch of Grow with SAP. The new offering is designed especially for midsize customers to adopt cloud ERP, and boost speed and predictability while fostering innovation.
The company’s restructuring plan is expected to better align its operating model and go-to-market approach with its accelerated cloud transformation. As part of increasing focus on cloud operations, SAP completed the earlier-announced sale of its entire stake in Qualtrics to Silver Lake and Canada Pension Plan Investment Board in June 2023. SAP had acquired Qualtrics in 2019.
However, global macroeconomic weakness, geopolitical instability and continued softness in software licenses are major headwinds for SAP. Stiff competition in the cloud space, and increasing research & development and sales & marketing expenses are added concerns.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for SAP this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
SAP has an Earnings ESP of -3.18% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks you may consider as our model shows that these have the right combination of elements to beat on earnings this season.
Cadence Design Systems (CDNS - Free Report) has an Earnings ESP of +0.67% and currently sports a Zacks Rank #1. CDNS is scheduled to report quarterly earnings on Jul 24. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CDNS’ to-be-reported quarter’s earnings and revenues is pegged at $1.18 per share and $973.2 million, respectively. Shares of CDNS have gained 55.3% in the past year.
Tyler Technologies (TYL - Free Report) has an Earnings ESP of +0.54% and presently carries a Zacks Rank #1. TYL is scheduled to report quarterly numbers on Jul 26.
The Zacks Consensus Estimate for TYL’s to-be-reported quarter’s earnings and revenues is pegged at $1.86 per share and $490.7 million, respectively. Shares of TYL have improved 20.8% in the past year.
Visa (V - Free Report) has an Earnings ESP of +0.26% and a Zacks Rank #2. V is scheduled to report quarterly figures on Jul 25.
The Zacks Consensus Estimate for V’s to-be-reported quarter’s earnings and revenues is pegged at $2.10 per share and $8.05 billion, respectively. Shares of V have increased 17.3% in the past year
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.