Benzinga | Jan 29, 2021 09:21AM EST

SAP Saw Strong Cloud Demand In Q4, Expects FY21 Operating Profit Decline

* SAP SE (NYSE: SAP) reported a revenue decline of 6% year-on-year to (euro)7.54 billion in the fourth quarter of FY20.

* The e-commerce solution exuded robust performance, more than doubling the cloud revenue due to their increased demand during the pandemic.

* The cloud revenue grew 8% year-on-year to (euro)2.04 billion. It was negatively impacted by lower transactional revenue from Concur due to reduced business travel amidst the pandemic.

* The software license revenue declined 15% to (euro)1.70 billion), and the cloud and software revenue declined 4% to (euro)6.58 billion.

* The gross margin for cloud expanded 210 basis points to 67.2%.

* The operating profit rose 26% to (euro)2.66 billion, with a margin expansion of 910 basis points to 35.2%.

* The adjusted EPS (euro)1.69 was down 7% Y/Y, beating consensus by (euro)0.13.

* Operating cash flow for fiscal 2020 almost doubled Y/Y to (euro)7.2 billion.

* SAP's expedited shift to the cloud will drive long-term, sustainable growth while significantly increasing the resiliency and predictability of our business," said SAP CFO Luka Mucic.

* Outlook: SAP expects FY21 cloud revenue growth of 13% to 18%, cloud and software revenue growth of 0% to 2%, operating profit decline of 1% to 6%.

* The share of cloud revenue and software support revenue could expand by 300 basis points to 75%. The cash flow expectations stand lower at (euro)6.0 billion in anticipation of discreetly lower profit, higher expected income tax payments, and adverse currency movement.

* Price action: SAP's shares were down by 0.82% at $129.37 on the last check Friday.