SAP SE bucked the trend among poor performing legacy software vendors, reporting rising revenues as customers rushed to snap up its new cloud offerings, though the company’s overall profits took a hit due to a tendency among buyers to choose lower-end services.

On Wednesday, Germany-based SAP reported second quarter operating profits of €701 million ($766 million) plus earnings of €0.39 a share, a one percent year-on-year gain at constant currencies.

After tax, the company pinned its profits at €469 million ($512 million), with non-IFRS earnings of €0.80 a share on an operating profit of €1.39 billion. Previously, Reuters poll analysts said they expected SAP’s non-IFRS earnings to fall between 1.39 billion and 1.45 billion euros, which means the company just hit expectations.

Delivering the results, SAP’s CEO Bill McDermott noted that customers are steadily shifting towards cloud software, although that trend is suppressing sales of more lucrative older software that runs on company’s on-premise data centers. SAP is hoping that S/4 Hana, the latest version of its flagship accounting and supply chain software, will increase sales in the near future, while the firm is expected to eliminate some jobs to grow its bottom line.

“Licenses were a bit weak, but the cloud-subscription momentum looks to have been strong,” Michael Briest, a London-based UBS AG analyst, told Bloomberg. His recommendation to buy SAP shares came as the company’s stock rose by 0.4 percent to 69.06 euros at the end of trading in Frankfurt yesterday.

SAP’s cloud comes together

Like most legacy tech firms, SAP was somewhat slow to adjust to cloud realities at first, and it’s cause wasn’t helped by a string of high-level executive departures. But the company has quickly gotten its act together, and now says its signed up more than 900 customers on its new cloud-based Hana products.

In total, SAP pulled in €552 million in cloud subscriptions, more than double what it earned in the same quarter of 2014. In comparison, SAP’s traditional software license sales rose by just two percent to €979 million. Had it not been for the Euro’s drop in value, license sales revenues would have fallen by seven percent.

SAP’s cloud was helped in a large part by its $7.2 billion acquisition of Concur Technologies Inc. last year – that business’s margins last year were about a third of SAP’s today, Chief Financial Officer Luka Mucic told Bloomberg. According to him, SAP’s “private cloud” business where customers run their licenses on SAP’s infrastructure is losing money.

As well as growing its cloud business, SAP said it’s also looking to shed around 3,000 jobs by the end of this year, either through redundancies or early retirement. That’s about 800 more than was first anticipated, but Mucic said he believes once those jobs are gone the company’s transformation will be more or less complete.

On the forecast side, SAP reiterated its earlier sales and earnings targets for 2015 in both cloud and legacy software, though it warned shareholders to expect less of a currency benefit for the remainder of the year.

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