October 22, 2019 / 5:34 AM / a month ago

Germany's Software AG confirms outlook as strategy overhaul bears fruit

BERLIN (Reuters) - Germany’s Software AG (SOWGn.DE) reported on Tuesday a 5% rise in third-quarter revenue driven by strong growth in its Adabas & Natural (A&N) database line and confirmed its 2019 guidance.

Operating profit in the business software firm, Germany’s oldest listed tech company, rose 8% in the third quarter to 59 million euros ($66 million).

“We are pointing in the right direction,” said Chief Executive Sanjay Brahmawar, saying a strategy overhaul he launched after starting the job last year was bearing fruit.

The third-quarter recovery was helped by new business at the company’s A&N unit, while its Digital Business Platform line recovered after restructuring its sales team in North America.

Software AG confirmed its 2019 target for operating margins of 28-30%.

Among new deals announced, Software is teaming up with Marketo, a marketing software firm owned by Adobe (ADBE.O).

Revenues from the recently created Cloud and Internet line dropped 6% in the third quarter, although Software AG expects a pickup in the final quarter, traditionally the busiest time of the year.

Shares in the Darmstadt-based firm rose 4.9% in premarket trade at Lang&Schwarz.

Reporting by Riham Alkousaa; Editing by Douglas Busvine and Edmund Blair

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