SAP SE beat analyst estimates for both revenue and profits and raised its full-year forecast today, citing strengthening cloud growth and rapid adoption of its Rise with SAP digital transformation program.

The enterprise resource planning giant affirmed the preliminary earnings report it released last week. Third-quarter earnings of $2.03 beat the consensus estimates of $1.56. Revenue of $7.96 billion easily outdistanced consensus estimates of $7.86 billion.

Cloud revenue grew 20%, to $2.78 billion, while combined cloud and software revenue climbed 7%, to $6.9 billion. SAP’s current cloud backlog rose 22%, to $9.51 billion, with the backlog of cloud business for its flagship S/4HANA ERP suite jumping 58%.

“We have seen record new cloud business in Q3 with the highest Q3 gross in six years,” said Chief Executive Christian Klein (pictured). “Our cloud revenue is growing faster than that of our largest competitors.”

SAP raised guidance for the fourth quarter. It now expects revenues of between $10.95 billion and $11.2 billion, up between 16% to 19% from a year ago and $100 million higher than the previous range. Full-year revenues are now expected to come in at between $27.8 billion and $28.1 billion, up between 2% and 4% from earlier estimates. The company’s Concur travel expense management platform, which has suffered along with the entire travel industry during COVID-19, is expected to contribute to that growth.

The company also raised its full-year profit forecast to between $9.43 billion and $9.66 billion from the earlier estimate of $9.26 billion to $9.61 billion. Those figures will be down slightly from last year, but Chief Financial Officer Luca Mucic said that’s because the company is investing in sales and research. “We will scale from the top line with accelerating cloud growth,” he said. “Things are going exactly in the right direction.”

The company said 77% of its business now comes from what it calls “more predictable revenue” sources, which are primarily subscriptions and long-term contracts.

“We are very confident that the revenue and backlog growth of S/4HANA will accelerate next year,” Mucic said in reference to the newest version of SAP’s ERP flagship.

More than 300 customers signed up for Rise with SAP during the quarter, representing a broad range of industries and company sizes. “Rise is resonating with all forms of customers,” said Scott Russell, head of customer success, who noted that half of them are new to the company.

SAP also saw continued steady growth of S/4HANA, with 500 new customers in the quarter, 60% of whom were not previously using SAP products. S/4HANA adoption now stands at 17,500 customers, up from 10,000 in the same quarter three years ago. The company said 11,400 of them are using the product in production, a statement intended to counter skepticism by some analysts that S/4HANA was much-purchased but little used.

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