In a statement SAP said, its business activity gradually improved during the second quarter despite the impact of the coronavirus-induced global lockdown; it saw its revenues and operating profit edge up during the quarter.
The German software maker has confirmed its full-year profit outlook.
During the second quarter, SAP’s total revenues increased by 2% to $7.64 billion (6.74 billion euros). Although SAP’s software licenses, its cash-cow, saw a slump and was down by 18%, its cloud revenues were up by the same amount.
“Software licenses revenue, while still below normal levels, recovered more than expected”, said SAP in a pre-released earnings statement, and went on to add, the revenue showed a strong sequential improvement compared to the first quarter.
The company’s operating profit increased by 7% to 1.96 billion euros following a cap in new hiring and cost cuts – which include spending less on travel and staging more virtual events.
“Our quick response to the crisis on the cost side drove strong operating profit and margin expansion,” said Chief Financial Officer Luka Mucic in a statement.
The company will continue to invest in innovation to emerge from the COVID-19 crisis even stronger, said SAP.
SAP, Europe’s most valuable tech company, confirmed its 2020 outlook for an operating profit, adjusted for special items, in a range of 8.1 billion-8.7 billion euros – a fall of 1%-6% at constant currencies.
Incidentally, SAP had trimmed its earnings guidance in April since the Wuhan coronavirus pandemic had led to customers placing their orders on hold.
“The outlook continues to be based on the assumption of a gradually improving demand environment in the third and fourth quarter as economies reopen further and population lockdowns ease”, said SAP.
SAP plans on publishing a full second-quarter earnings on July 27.