SAP reported 23% net profit decrease in Q1 2015

The German business software provider SAP reported 23% net profit decrease in Q1 2015, which is another sign of the company’s transition to Internet-based software. SAP net profit for the period ended March 31, reached 414 million EUR compared to 534 million EUR in the same period last year. At the same time the company reported non-business profit of 697 million EUR, an increase of 5%, based on its own calculations, which are not recognized under international financial reporting standards. This figure was below expectations of analysts who had forecast level of 755 million EUR.

The revenue rose with 22% to 4.5 billion EUR, driven by increased demand for cloud offerings. The revenue based only cloud subscriptions, jumped more than 100% to 503 million EUR. The company benefit from the weak EUR in the first quarter, but the effect was “weakened by charges related to the acquisition”, said Chief Financial Officer Luka Mucic.

The SAP CEO Bill McDermott shifted the focus away from traditional software, expecting that long-term growth of the company will be connected to the cloud activities. As part of these efforts, McDermott oversaw last year’s acquisition of US-based computing company Concur Technologies Inc for 8.3 billion USD. In February, the company launched a new design of its core business software S/4HANA, which can operate in the cloud and hardware. The company said that so far more than 370 client application.

SAP reiterated its guidance for 2015 and said it expects non-profit operating profit to be between 5.6 billion EUR and 5.9 billion EUR.