SAP Posts Higher 3Q Revenue, Operating Profit

By Kelly Cloonan

SAP reported higher revenue and operating profit for the third quarter and guided for operating profit toward the high end of its prior outlook for the year.

Reporting on a non-IFRS basis, the German business-software company said total revenue rose 7% to 9.08 billion euros, ($10.54 billion) from the prior-year period. Sales from SAP's core cloud business increased 22% to 5.29 billion euros.

Net income grew to 1.85 billion euros from 1.44 billion euros. Operating profit--a closely watched metric for software companies--rose to 2.57 billion euros from 2.24 billion euros.

SAP, like other European software companies, presents its figures as two sets of numbers. One set is based on the International Financial Reporting Standards--an international accounting method that seeks to provide a global reporting standard--though analysts and investors tend to follow SAP's non-IFRS numbers, which exclude restructuring expenses and acquisition-related charges.

For the year, SAP now expects non-IFRS operating profit toward the upper end of its prior outlook range of 10.3 billion euros to 10.6 billion euros and models cloud revenue toward the lower end of its forecast for 21.6 billion euros to 21.9 billion euros.

The company now expects free cash flow of 8 billion euros to 8.2 billion euros, compared to its prior outlook for roughly 8 billion euros.

Write to Kelly Cloonan at kelly.cloonan@wsj.com