FRANKFURT, April 24 (Reuters) - Germany’s SAP announced upbeat results in the seasonally tough first quarter, saying it was gaining market share on its competitors in the cloud and its margin recovery was on track.
SAP, Europe’s largest tech company, also raised its sales and profits guidance for 2018 to take into account the $2.4 billion acquisition of U.S. sales software firm Callidus that was announced in January.
“Our results demonstrate strong top line and bottom line results,” Chief Executive Bill McDermott told reporters on a conference call. “We’re gaining share fast and we’re outpacing our toughest competitors pretty handily.”
SAP now expects total revenues this year at 24.8-25.3 billion euros ($30.28-$30.89 billion), representing growth of 5.5-7.5 percent, up from an earlier expectation of 5-7 percent growth.
Non-IFRS operating profits rose 14 percent in constant currency to 1.235 billion euros, compared to the average forecast of 1.19 billion euros in a Reuters poll of 15 analysts.
Cloud subscription and support revenues, SAP’s growth driver, grew by 18 percent to exceed 1 billion euros for the first time. At constant currencies they rose 31 percent, to which McDermott said: “Wow.”
SAP has faced significant currency headwinds due to the strong euro and both the company and analysts focus on key metrics after adjustment for currency effects to get an underlying picture of performance. ($1 = 0.8191 euros) (Reporting by Douglas Busvine and Eric Auchard Editing by Tom Sims)