SAP AG has delivered another strong quarter in which net profit was up 15% on the year and the firm now expects full year software sales to show a 10% increase
Total third quarter revenue was up 8% to 1.78 billion euros ($2.23 billion) while net profit was 291 million euros ($366 million), a 15% increase on the previous year. Software revenue was also up, by 13%, to 491 million euros ($620 million) with maintenance revenue totaling 720 million euros ($909 million) compared to 655 million euros ($827 million) last year.
It closed 1,500 deals during the quarter, a 20% increase year on year, mostly in the small to medium realm. Deal sizes seem to have stabilized. About 30% of revenue came from SME sales. Although it sees Microsoft in Europe and said it is a strong competitor the company does not think the US giant is taking market share from SAP, rather both are increasing their share in the SME sector.
One third of its revenue came from customers migrating to mySAP and two thirds from either new customers, sales of new products to existing customers or sales of additional seats to existing customers. Declining to give metrics on what proportion of its customer base had yet to migrate, CEO Henning Kagermann said that the one third figure had been stable for several quarters and said it indicated that the company had positive long term prospects with regard to this area of revenue.
Each of the three regions reported year-over-year growth, resulting in a more balanced performance than we have previously seen this year, commented Kagermann. Sales in Europe increased by 24%, which was taken to indicate that it was recovering economically, Asia Pacific by 23% and the Americas, by 6%.
Although the figure for the Americas appears to be low it follows a very strong previous quarter and the overall results are indications of improvements in other area not a failure in the region.