(Bloomberg) — SAP SE reported first-quarter cloud revenue in line with analysts, as surging demand for artificial intelligence fueled growth at the German software maker.
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Adjusted cloud revenue in the quarter rose 25% at constant currencies from a year earlier to 3.9 billion euros ($4.2 billion), it said Monday. the Walldorf-based company in a statement. That compares with the average estimate of 3.9 billion euros from analysts surveyed by Bloomberg.
Europe’s largest software company is looking to migrate its customers from its legacy on-premises software to the cloud, where it offers AI services to businesses to sweeten the deal. This year, SAP announced discounts of up to 50% for existing customers to accelerate the transition to subscription models that lead to higher average spend per customer.
“We are off to a good start in 2024 and are confident that we will achieve our goals for the year,” CEO Christian Klein said in the release. “Looking ahead, we have powerful growth drivers: commercial AI, cross-selling across our cloud portfolio, and winning new customers, particularly in the mid-market. »
Read more: SAP sees AI as a shortcut to faster cloud revenue growth
The company has joined a general industry trend of integrating AI tools into virtually all of its products. As part of this initiative, SAP has invested in startups Aleph Alpha GmbH, Anthropic PBC and Cohere.
SAP announced a restructuring program in January as part of an increased focus on growth areas such as cloud technology and AI. The move affects some 8,000 jobs and will cost around €2 billion, most of which will be recognized in the first half of the year.
These results are SAP’s first to include share-based compensation expenses in its non-IFRS reporting, while gains and losses related to equity investments are excluded.
SAP shares rose 0.2% to 166.10 euros on Monday in Frankfurt. The stock is up 19% so far this year.
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