SAP SE (DE:SAP) recently published its Q2 earnings for 2023, backed by a strong performance in its cloud business. The shares were down by 1.27% on Thursday after the company reduced its revenue forecast for the next two quarters of the year. Overall, the shares have experienced substantial growth over the past year, with a remarkable return of 45%.
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Q2 2023 Results
For the quarter, SAP posted revenue of €7.5 billion, which was 5% higher on a year-over-year basis. As expected by analysts, the company’s cloud revenue was a standout, exhibiting substantial growth of 22% as compared to last year. The company’s cloud backlog grew by 21% to €11.54 billion, indicating strong future revenue. These positive numbers depict the continued strength and demand for the company’s cloud solutions.
On the other hand, software licenses and support revenue experienced a 4% year-on-year decline to €3.19 billion.
The company’s non-IFRS operating profit exhibited remarkable growth, surging by 28% to €2.06 billion, driven by increased cloud revenue, efficiency improvements, and the successful implementation of the next-generation delivery program.
The company also updated its full-year guidance numbers for 2023. It now anticipates €14.0 to €14.2 Billion in cloud revenue, as compared to the previously forecasted €14.0 to €14.4 Billion. The operating profit is now expected to be in a range between €8.65 and €8.95 Billion, which is slightly higher than the previous projection of €8.6 and €8.9 Billion.
Are SAP Shares a Buy?
On TipRanks, SAP stock has a Strong Buy rating based on a total of 17 recommendations. It includes 13 Buy and four Hold recommendations.
The average target price is €137.75, which implies an upside potential of 9.12% on the current trading price.
