Why SAP Shares Are Surging Today

SAP SE (NYSE: SAP) shares are rising by around 5% after the company reported Q3 FY23 financial results.

SAP reported revenue growth of 4% Y/Y to €7.744 billion. Total revenue was up 9% Y/Y in constant currencies (CC).

Cloud revenue increased 16% Y/Y (+23% Y/Y in CC) to €3.472 billion. 

Software licenses and support revenue declined 6% Y/Y (-2% Y/Y in CC) to €3.208 billion. 

Cloud and software revenue grew 4% Y/Y (+9% Y/Y in CC) to €6.679 billion.

Current Cloud backlog was up 19% Y/Y (+25% Y/Y in CC) to €12.3 billion. 

Non-IFRS cloud gross margin was up 2.9 percentage points to 73.7% at CC.

Non-IFRS operating profit rose 10% Y/Y (+16% Y/Y in CC) to €2.28 billion, led by the resilience of the on-premise business and continued operational discipline. 

Non-IFRS EPS (basic) from continuing operations rose 32% Y/Y to €1.45.

As of September 29, SAP had repurchased shares worth about €902 million.

"Our Q3 results are yet another proof point that we have entered the next phase of our transformation. We accelerated cloud growth across our portfolio and significantly expanded our cloud gross margins. Our strong focus on innovation, including our latest SAP Business AI capabilities, ensure SAP's continued resiliency in the face of tough macroeconomic conditions and increasing geopolitical tensions," said Christian Klein, CEO

FY23 Outlook Reiterated: At CC, SAP expects cloud revenue of €14.0 billion – €14.2 billion, cloud and software revenue of €27.0 billion – €27.4 billion, and non-IFRS operating profit of €8.65 billion – €8.95 billion. 

Also Read: SAP Helps Customers In Driving Business Transformation With LeanIX Buyout

Price Action: SAP shares are up 4.58% at $133.45 premarket on the last check Thursday.