SAP SE Sees Significant Growth in Q4 and Full Year Earnings

SAP SE reported a strong earnings growth, with a 35% increase in Q4 profit after tax. The company exceeded expectations with a significant jump in basic earnings per share, indicating robust financial health and positive outlook.

Date: 28-01-2025

AI Rating: 8

Overview of SAP SE's Performance
SAP SE has reported impressive figures for the fourth quarter, indicating robust financial health and a likely positive impact on its stock price.

Earnings Per Share (EPS)
The basic earnings per share (EPS) from continuing operations increased to 1.37 euros from 1.05 euros, representing a strong growth of approximately 30.2%. This impressive rise will likely bolster investor confidence as higher EPS typically reflects greater profitability and can lead to an increase in stock price.

Revenue Growth
Total revenue for the fourth quarter reached 9.38 billion euros, marking an 11% increase from the prior year. The cloud revenue category performed exceptionally well, soaring by 27%. This growth indicates SAP's successful strategy in boosting its cloud services, which is crucial as digital transformation accelerates across industries. As a result, investors may view this growth favorably, potentially increasing demand for SAP shares.

Net Income
The reported profit after tax from continuing operations was 1.6 billion euros, up by 35%. This increase in net income suggests a robust business operation, further enhancing the outlook for investors.

Free Cash Flow (FCF)
The report does not provide information about free cash flow, which limits an understanding of liquidity and capital available for reinvestment purposes. However, the overall strong earnings could imply sufficient cash generation capacity.

Return on Equity (ROE)
The report does not disclose any specific data related to return on equity, which is vital for assessing the efficiency of utilizing shareholder funds.

Outlook for 2025
SAP's forecasts for significant revenue growth in cloud services (21.6 - 21.9 billion euros) and a slight declination in current cloud backlog growth may reflect cautious yet optimistic future expectations. The projected growth of 26% to 28% in cloud revenue at constant currencies is particularly positive. Overall, this guidance supports a favorable expectation for future performance, solidifying the confidence among investors.

Stocks: SAP