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SAP Q3 Profit Down 10%; Raises FY Outlook

German cloud-based software company SAP SE (SAP) reported that its third-quarter profit attributable to owners of parent declined about 10% to 1.41 billion euros or 1.19 euros per share from 1.56 billion euros or 1.32 euros per share in the same quarter last year.

SAP raised its full-year 2021 outlook, reflecting the strong business performance which is expected to continue to accelerate cloud revenue growth.

The company continues to expect software licenses revenue to decline for the full year as more customers turn to the 'RISE with SAP' subscription offering for their mission-critical core processes.

The company now expects annual non-IFRS operating profit, at constant currencies, to be in the range of 8.1 billion euros - 8.3 billion euros, down 2% to flat at constant currencies. The previous range was 7.95 billion euros - 8.25 billion euros at constant currencies.

The company now projects annual non-IFRS cloud revenue at constant currencies to be in the range of 9.4 billion euros - 9.6 billion euros, up 16% to 19% at constant currencies. The previous range was 9.3 billion euros - 9.5 billion euros at constant currencies.

The company now anticipates annual non-IFRS cloud and software revenue at constant currencies to be in the range of 23.8 billion euros - 24.2 billion euros, up 2% to 4% at constant currencies. The previous range was 23.6 billion euros - 24.0 billion euros at constant currencies.

Non-IFRS earning per share for the third-quarter increased 2% year-over-year to 1.74 euros, including another strong contribution from Sapphire Ventures.

IFRS operating profit decreased 15% to 1.25 billion euros and IFRS Operating margin decreased by 4.3 percentage points to 18.2% mainly due to higher share-based compensation expenses-primarily related to Qualtrics segment.

Total revenue for the third-quarter grew 5% to 6.85 billion euros from 6.54 billion euros last year.

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