SAP's revenue in the fourth quarter grew by 12 percent, helped by strong growth in the market for its cloud applications, its HANA in-memory database and mobile applications.
Revenue in the fourth quarter ended Dec. 31 was €5 billion ($6.6 billion at the exchange rate on the last day of the quarter), up 12 percent from the same quarter a year earlier, according to IFRS (international financial reporting standards). Software and software-related service revenue for the quarter was €4.2 billion, up 14 percent from a year earlier.
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The business software vendor also forecast Wednesday non-IFRS software and software-related service revenue growth of 11 to 13 percent at constant currencies this year, with software and cloud subscriptions revenue to increase in a range of 14 to 20 percent.
While revenue from software grew 9 percent to €1.9 billion in the quarter, cloud subscriptions and support revenue grew by a whopping 2,000 percent to €126 million from €6 million a year earlier. Revenue from HANA was nearly €200 million in software revenue in the fourth quarter, totaling almost €400 million for the full year, while the mobile business contributed more than €220 million to software revenue, SAP said.
HANA is "the fastest growing product in the history of the enterprise software business," co-CEO Jim Hagemann Snabe claimed during a conference call with analysts on Wednesday.
SAP has said it now has about 1,000 HANA customers. The number that has actually gone live on the system is "approaching 200," executive board member and technology chief Vishal Sikka said during the call. There are also about 300 implementations of HANA One, a service that runs on Amazon Web Services, Sikka said.
HANA revenue is expected to reach €650 million to €700 million this year, according to SAP. In addition, the number of customers that begin running SAP's flagship Business Suite on top of HANA should get to "triple digits" this year, Sikka said.
SAP launched the new Business Suite capabilities earlier this month. Over time it hopes to displace rival databases, such as Oracle's, from its customer installed base with HANA.
"These are complex systems," and there are "complex choices customers have to make," Sikka said.
SAP's operating profit was however down by 5 percent in the fourth quarter to €1.6 billion because of expenses on share-based compensation and acquisition-related charges, and net profit dropped by 8 percent in the quarter from a year earlier. The company acquired cloud-based human capital management tools company SuccessFactors in February, and cloud-based e-commerce vendor Ariba in October.
For the full year, total revenue was €16 billion, up by 14 percent from the previous year. Software and cloud subscription revenue of close to €5 billion was up 19 percent, while support revenue was €8 billion, an increase of 14 percent. Operating profit was down 17 percent to €4 billion, also impacted by costs of acquisitions and share-based compensation. Net profit was down 18 percent to €2.8 billion. The number of employees has gone up by 8,700 FTE (full-time equivalents) in the year, of which more than 4,800 came from acquisitions.