:max_bytes(150000):strip_icc()/GettyImages-2164282750-2c350ce4295e4190be5748d24c971980.jpg "SAP Stock Hits Record High as Demand for Its Cloud Products Soars")
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Key Takeaways
- SAP beat third-quarter profit and sales estimates on soaring sales of the business software maker’s cloud offerings.
- The company also is seeing strong demand for its artificial intelligence (AI) products.
- SAP raised its sales outlook and its U.S.-listed shares hit a record high.
American depositary receipts (ADRs) of SAP (SAP) traded at an all-time high Tuesday, a day after the German business software giant reported better-than-anticipated results and boosted its sales outlook on booming demand for its cloud products.
SAP posted third-quarter earnings per share (EPS) of 1.25 euros ($1.35), with revenue rising 9% to 8.47 billion euros ($9.16 billion). Both were above consensus estimates of analysts polled by Visible Alpha.
Cloud revenue jumped 25% to EUR4.35 billion, and total cloud and software sales were up 11% to EUR7.43 billion. The company noted that its current cloud backlog also increased 25% to EUR15.4 billion.
CEO Says Progress Made on Business AI
Chief Executive Officer (CEO) Christian Klein explained that while demand for its cloud products was solid, “even more importantly, we are making strong progress” on business artificial intelligence (AI), adding that “a significant part of our cloud deals in Q3 included AI use cases.”
SAP now expects full-year cloud and software revenue of EUR29.5 billion to EUR29.8 billion, raising the midpoint of its previous outlook by EUR400 million. It sees free cash flow in the range of EUR3.5 billion to EUR4.0 billion, up from the earlier prediction of EUR3.5 billion.
SAP ADRs recently were up about 2% to $233.41 after touching a record $237.71 earlier Tuesday morning. They are more than 50% higher this year.
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