By Rick Whiting, ChannelWeb, July 28, 2010, 1230 hrs
Continuing its rebound from a tough 2009, software giant SAP reported solid gains in revenue and earnings for its second quarter, fueled by a surge in sales in the US.
SAP also said it has completed its $5.8 billion acquisition of Sybase, an announcement that had been widely accepted since the deal received approval from the European Commission last week. That acquisition brings a range of new technologies to SAP, including mobile applications and in-memory computing software.
For the second quarter ended June 30, SAP reported sales of 2.89 billion Euros ($3.76 billion), up 5 percent from 2.58 billion Euros ($3.35 billion) in the second quarter of 2009. Earnings rose more than 15 percent to 491 million Euros ($637.2 million) from 426 million Euros ($552.7 million) one year earlier.
“We continue to see an improvement in customer spending in most of our regions as customers are returning to investing for growth,” said co-CEO Bill McDermott in a conference call.
Software revenue in the quarter rose 5 percent to 637 million Euros ($826.6 million) from 543 million Euros ($704.8 million) in last year’s second quarter. Software and software-related service revenue increased 8 percent to $2.26 billion Euros ($2.93 billion) from 1.95 billion Euros ($2.54 billion) last year.
McDermott said other signs of the improved business climate included the number of contracts greater than 5 million Euros SAP signed during the quarter – 20 percent of all orders compared to 12 percent one year earlier – and a 15 percent increase in average selling price.
The co-CEO also cited the company’s expanded channel efforts to sell into SMB markets as a factor in the second quarter results.
The second quarter gains were largely driven by sales increases in the Americas, especially the 20 percent gain in the US. Sales in Asia-Pacific overall were up, but were soft in Japan. And sales were up only slightly in EMEA (Europe, Middle East and Africa) because of the economic uncertainties in Europe ignited by the budget crises in Greece and other countries.
“Results in the US were outstanding,” McDermott said. “In the US we saw a return of big deals propelled by a better economy, pent up demand from last year’s downturn and an increase in [mergers and acquisitions].” |