SAP second-quarter profit up 73%

German software company SAP reported a 73% jump in net profit for the second quarter on the back of healthy cloud growth and lower restructuring costs.

Net profit rose to €816m from €471 in the second quarter of 2015 as revenue increased by 5% to €5.24bn, with cloud subscriptions and support revenue up 30% to €720m. Revenue for software licenses and support was up 4% to €3.64bn.

Operating profit for the period rose 9% to €1.52bn excluding special items and restructuring costs declined to €22m from €418m in the first half of 2015.

Chief financial officer Luka Mucic said: “We did what we said we would do – we delivered a strong Q2. I am proud how SAP is navigating ahead with extraordinary success across all business dimensions.

“Driven by our customer led innovation and our successful business transformation we outperformed the competition in top and bottom line growth.”

SAP said it expects full-year 2016 operating profit to be in a range of €6.4bn to €6.7bn at constant currencies.

Credit Suisse said SAP has delivered better-than-expected results. The bank said the licence outperformance flowed through to the bottom line such that operating profits were also 5% ahead of consensus, reflecting 50bps of margin expansion.

“Overall, we think this is a solid performance that starts to de-risk the second half. As a result, we reiterate our outperform rating.”