Rampant cloud growth struggled to offset falling profits for SAP, Europe’s largest software company, during the firm’s second quarter.
Post-tax profits tumbled 16 per cent to 469m euro ($508.2m) while total revenue increased by a fifth, to 4.9bn euro ($5.3bn) for SAP’s three months to June 30, 2015. Earnings per share fell 16 per cent to 0.39 euro ($0.42) under IFRS reporting.
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The fall came despite growth in cloud and on prem with cloud subscriptions and support gaining fastest.
Cloud subscriptions and support was up 129 per cent to 552m euro ($598.2m) with cloud and software up 21 per cent to 4.06bn euro ($4.39bn).
Unfortunately for SAP, cloud remains a relatively small percentage of its overall business.
Software licenses and support, still the biggest earner for this giant, grew, too, just not by as much: 13 per cent to 3.51bn euro ($3.8bn).
SAP blamed the profits fall on acquisition-related costs, higher stock-based compensation spending and restructuring.
The giant has lost 10 per cent of its workforce in the last 12-months; it copped to the latest cut, three percent, in March this year.
It denied the losses were part of cost-cutting, rather to help growth.
SAP’s current head count stands at 67,651. ®