SAP benefits from increased corporate spending in Q2

SAP has come in with a powerful second quarter for 2011 where top line numbers were substantially up, virtually across the board, providing it with confidence to state that it expects 2011 forecasts to hit the upper regions of its forecasts. Q2 contrasts with Q1, which was broadly in line with expectations but disappointed on profitability due to acquisition-related charges (see here).

Non-IFRS software and software-related service revenue for the year was expected to rise by 10% to 14% but SAP now anticipates that it will come in at the top of the range. Operating profit is also expected to be at the high range of the previously stated Eur4.45bn to Eur4.65bn.

SAP said visibility for the remainder of the year had improved, and its Q2 performance was certainly good. IFRS total revenue was up 14% to Eur3.3bn, and within that software revenue grew 26% to Eur802m. Software and software-related service revenue was up 14% to Eur2.58bn. That all amounted to an IFRS operating profit of Eur857m, which was an 11% improvement, and an operating margin of 26.0%, which was a smidgeon down of the 26.7% of 2010.

The most surprising aspect of the results was where in Q1 EMEA was the trailing region this time round it outpaced the America’s. EMEA revenues were 16%, or 19% excluding Germany compared to a 10% rise for the America’s region. Asia Pacific was up 19%, with Japan increasing by 23%.

We will have further details of SAP’s performance in HotViews Extra following its earnings call where we hope to get a better idea of why performance has shot up - SAP attributes it to corporate spending - and how its individual business lines are doing, particularly the Business ByDesign SaaS offering and HANA, the in-memory computing product line.