SAP, the German business-software company, is set to release its second quarter results on Thursday. Here’s what you need to know:
According to a company-provided consensus, SAP is expected to post non-IFRS total revenue of €7.56 billion ($8.50 billion). This forecast represents a 5% year-on-year growth. The cloud revenue is projected to reach €3.40 billion, reflecting a significant 22% increase.
Operating Profit Forecast
SAP is anticipated to report a 15% growth in non-IFRS operating profit, reaching €1.93 billion with an operating margin of 25.6%.
What to Watch For
In April, SAP made adjustments to its yearly guidance due to the divestment of its Qualtrics stake. Analysts from Citi and UBS expect no further changes to be made during this announcement. SAP’s guidance includes a target non-IFRS operating profit, ranging from €8.6 billion to €8.9 billion at constant currencies. Their cloud revenue target at constant currencies falls between €14 billion and €14.4 billion.
Investors are increasingly investing in artificial intelligence; hence Jefferies analysts believe there may be questions regarding SAP’s investment in this technology. Citi’s Amit Harchandani predicts that artificial intelligence will be a key topic discussed during SAP’s earnings call.