German business software group SAP raised its full-year outlook for a third time on the back of a strong showing in the third quarter as more customers shift their IT operations to the cloud.
SAP now expects cloud revenue to grow by 16 percent to 19 percent in the year as a whole, helping its overall cloud and software revenue to gain by two percent to four percent, it said in a statement.
Operating profit is expected to be flat to down two percent for the year, an improvement from its earlier forecast of unchanged to down four percent.
SAP, which is moving to subscription-based cloud services from software licences with up-front fees, launched Rise with SAP, an all-in-one digital transformation package in January.
“We see record adoption of our applications and our platform,” CEOChristian Klein said in a statement. “This has resulted in strong acceleration of our cloud growth.”
SAP raised its forecast for cloud and software revenue for the full year by 200 million euros (A$314 million) to 23.8 billion-24.2 billion euros (A$37.4 billion to $38 billion).
The cloud backlog for flagship database S/4 HANA was up 58 percent at constant currencies and current cloud backlog – a measure of incoming business – reported a 22 percent growth during the third quarter.
Adjusted revenue rose five percent to 6.68 billion euros (A$10.5 billion) for the third quarter ended September 30, the company reported in a preliminary earnings statement.
SAP is expected to release full results on Oct. 21.