SAP Raises 2024 Guidance, AI Contributes to Q3 Earnings Beat

SAP AG had a strong third quarter with earnings and revenue surpassing analysts' expectations

In a press release, SAP said its revenue for the quarter rose 11% to €7.84 billion, with a rise in current cloud backlog of 30% and cloud revenue up 20%. The company saw growth across all regions and businesses and raised its full-year outlook.

SAP's intelligent cloud business continues to be a growth driver for the company

SAP's intelligent cloud business, which includes its cloud ERP, CRM, and data analytics offerings, saw revenue grow 22% to €3.08 billion. This growth was driven by strong demand for SAP's S/4HANA cloud ERP solution and its SuccessFactors human capital management (HCM) suite.

SAP is seeing strong demand for its RISE with SAP offering

SAP's RISE with SAP offering, which provides a comprehensive cloud solution for businesses, is also seeing strong demand. SAP said that it has signed more than 1,000 RISE with SAP contracts to date.

AI is playing a key role in SAP's growth

AI is playing a key role in SAP's growth. The company is using AI to enhance its cloud offerings, including its S/4HANA cloud ERP solution and its SuccessFactors HCM suite. SAP is also using AI to develop new products and services, such as its AI-powered conversational AI, SAP CoPilot.

SAP raises 2024 guidance on the strength of its cloud business

Based on its strong performance in the third quarter, SAP has raised its full-year outlook. The company now expects revenue to grow between 11% and 13% in 2023, up from its previous guidance of 9% to 11%. SAP also expects its cloud revenue to grow between 25% and 27% in 2023, up from its previous guidance of 22% to 24%.

Conclusion

SAP's strong third quarter results and raised guidance indicate that the company is well-positioned to continue its growth in the years to come. The company's focus on cloud, AI, and RISE with SAP is paying off, and it is seeing strong demand for its offerings. SAP is a leader in the enterprise software market, and its continued growth is a positive sign for the industry as a whole.