SAP is set to announce its third-quarter results on Wednesday. Here is a breakdown of what you should know:
Revenue Forecast
The German business-software company is expected to report non-IFRS total revenue of €7.73 billion ($8.16 billion). This represents a 3% year-on-year growth. Non-IFRS cloud revenue is projected to reach €3.53 billion, showing an impressive 18% increase.
Operating Profit Forecast
SAP is anticipated to disclose a 6% growth in non-IFRS operating profit, totaling €2.19 billion. This translates to a 28.4% non-IFRS operating margin.
What to Watch
Guidance
After a successful second quarter that led to higher revenue and operating profit, SAP adjusted its guidance for the year in July. Citi analysts predict that SAP will reaffirm its outlook, which aims for non-IFRS operating profit between €8.65 billion and €8.95 billion, and constant currency cloud revenue of €14 billion to €14.2 billion.
Artificial Intelligence
With an increasing number of companies investing in artificial intelligence, Citi analysts expect this topic to feature prominently in SAP’s results. Notably, SAP recently named Microsoft’s Walter Sun as the global head of artificial intelligence. This strategic move highlights SAP’s efforts to gain a larger share in the rapidly growing market.
