This morning SAP disclosed preliminary financial results for the fourth quarter ended December 31. The business software maker saw sales increase by 21 percent year-over-year to €5 billion, or $6.65 billion, marking the 12th consecutive quarter of double digit revenue growth.
SAP credits its strong financial performance to better-than-expected results in the EMEA and AJP regions, as well as “exceptional growth” in three of its core verticals: analytics, mobile, and cloud.
HANA generated sales of $266 million in Q4 and nearly twice as much for the full year, while Sybase accounted for about $290 million last quarter. The company’s two cloud segments, apps and services, broke the triple-digit growth threshold with combined revenue of $1.1 million, a 102 percent increase from 2011 achieved thanks to the acquisitions of SuccessFactors and Ariba.
“We saw very strong revenue contribution from our key innovations SAP HANA and Cloud. We are confident we will continue our double-digit growth momentum in 2013 and further improve our profitability,” said SAP CFO Werner Brandt.
Demand for SAP’s products increased as well, and the company had to increase spending just so it could keep up. IFRS profit plummeted eight percent to about $1.5 billion in the fourth quarter, while operating margin fell to 31.7 percent due to reinforced investments in the cloud, and more aggressive hiring.
Overall, non-IFRS annual rose by 14 percent to more than $23 billion in 2012. Software and related service income increased 17 percent, while combined revenue from software and cloud subscriptions climbed 21 percent to 5 billion euros.
SAP is cashing in on the big trends in IT, but is struggling to gain a foothold in one key emerging market – China. In spite a commitment to spend $2 billion on local operations from 2011 through 2015, adoption of the firm’s software here remains slow.