Benzinga | Jul 21, 2021 06:19AM EDT

SAP Beats On Q2 Earnings, Raises FY21 Cloud & Software Revenue Outlook

SAP SE (NYSE: SAP) reported a second-quarter FY21 revenue decline of 1% year-on-year to (euro)6.67 billion at par with the analyst consensus of (euro)6.7 billion.

* The current cloud backlog increased 17% Y/Y to (euro)7.77 billion.

* Cloud revenue grew 11% Y/Y to (euro)2.28 billion; S/4HANA cloud revenue rose 33% Y/Y to (euro)257 million, and Software licenses and support revenue decreased 5% Y/Y to (euro)3.5 billion.

* Cloud and software revenue rose 1% Y/Y to (euro)5.75 billion, while Services revenue declined 11% Y/Y to (euro)0.92 billion.

* Segment revenue in AT&S was flat at (euro) 5.62 billion, Qualtrics segment revenue increased 25% Y/Y to (euro)211 million, and Services segment revenue declined 7% Y/Y to (euro)796 million.

* Non-GAAP operating margin contracted 30 basis points to 28.8%.

* Non-GAAP EPS was (euro)1.75, beat the analyst consensus by (euro)0.58.

* SAP generated (euro)3.77 billion in operating cash flow during the six months ended Jun. 30.

* SAP saw strong adoption of its cloud portfolio as customers select SAP for their business transformation.

* Outlook: SAP raised FY21 outlook for cloud revenue in constant currencies from (euro)9.2 billion-- (euro)9.5 billion to (euro)9.3 billion -- (euro)9.5 billion.

* The company increased the Cloud and software revenue at constant currencies outlook from (euro)23.4 billion -- (euro)23.8 billion to the new range of (euro)23.6 billion -- (euro)24.0 billion.

* It continues to expect an operating cash flow of (euro)6.0 billion.

* Price action: SAP shares traded lower by 3.10% at $139.64 in the premarket session on the last check Wednesday.