Q4 revenue was up 11% to Euro 4.5bn. Within that software revenue grew 16% to Euro 1.74bn, while revenues relating to maintenance expanded 14% to Euro 3.72bn. That delivered an operating margin of 37% (vs. 13.4%) and an operating profit of Euro 1.67bn (vs. Euro 0.54bn).
For the full year revenue came in at Euro 14.23bn, which is 14% increase. Software revenue was up 22% to Euro 3.97bn, with maintenance-based revenue up 16% to Euro 11.32bn. The full year operating margin was 34.3% (vs. 20.8%), with an operating profit of Euro 4.88bn (vs. Euro 2.59bn).
We have highlighted the need for SAP’s HANA and mobile investments to start paying their way (see New initiatives failing to earn their keep at SAP?) and it looks like this is starting to happen because license growth was enhanced by momentum in analytics and mobile, and accelerated growth for the in-memory HANA technology.
HANA delivered revenue of Euro 160m vs. a target of Euro 100m while mobile added over Euro 100m to software revenue. There have been reports that HANA was too costly and needed too much work to fit it to customer’s needs, which was making it hard to build a business case, but the sales performance suggests this is not an issue. SAP is betting a lot of the business on HANA so the growth will be a relief. There is no mention of SaaS however.
Oracle will be viewing SAP’s overall performance and HANA sales growth with unease following its own recent and unexpectedly poor results (Oracle shocks, spikes wider market fears). HANA success could have major repercussions for Oracle in the mid to long term because SAP will run its transactional applications on HANA as well as analytics. In doing so it aims to do away with the need for Oracle (and IBM) databases to underpin its applications - potentially pulling revenue and mindshare away from Oracle.
Full financial details will be available on January 25. What is clear from the prelims is that SAP is outperforming its rival and that with its new technologies it has plenty of headroom for further growth.