SAP(SAP)2025-02-27 13:00Revenue Growth - The company reported significant growth in cloud revenue, which is the largest revenue stream, followed by software support revenue [29]. - Total revenue for 2024 was €34,176 million, an increase from €31,207 million in 2023, representing a growth of approximately 9.4% [59]. - Cloud revenue for 2024 reached €17,141 million, up from €13,664 million in 2023, indicating a growth of about 25.5% [59]. - Operating profit for 2024 was €8,153 million, compared to €6,514 million in 2023, reflecting an increase of approximately 25.2% [61]. - The operating margin for 2024 was 24.0%, up from 20.9% in 2023 [61]. Financial Metrics - Operating profit (non-IFRS) and free cash flow are primary measures used to assess profitability and liquidity, with free cash flow calculated as net cash flows from operating activities adjusted for capital expenditures [31]. - The effective tax rate (non-IFRS) is presented for informational purposes, reflecting the variability of gains and losses associated with equity investments [51]. - Free cash flow for 2024 was €4,113 million, down from €5,093 million in 2023 [57]. - Under the revised definition effective from 2025, free cash flow would have been €4,222 million for 2024, compared to €5,116 million for 2023 [54]. Cloud Backlog and Market Demand - Current cloud backlog (CCB) reflects contractually committed cloud revenue expected to be recognized over the next 12 months, indicating strong market demand [30]. - The total contractually committed cloud revenue (TCB) is a key indicator of go-to-market success, reflecting both new contracts and renewals [39]. Revenue Predictability and Stability - The share of more predictable revenue, which includes cloud revenue and software support revenue, is a critical metric for financial stability [40]. Customer and Employee Engagement - The company emphasizes the importance of customer loyalty, measured by the net promoter score (NPS), to achieve financial goals [34]. - Employee engagement is tracked through an index that reflects satisfaction and commitment, crucial for the company's growth strategy [35]. Diversity and Inclusion - The Women in Executive Roles (WiER) metric monitors gender diversity in top management levels, supporting the company's commitment to equal opportunity [36]. Financial Planning and Performance Evaluation - The company utilizes non-IFRS financial measures for internal planning and performance evaluations, providing a clearer view of operational performance [45]. - The company plans to update its definition of free cash flow to better reflect cash generated from operating activities starting in 2025 [54]. Research and Development Expenses - Research and development expenses for 2024 were €6,508 million, slightly reduced from €6,316 million in 2023 [60]. - Total operating expenses for 2024 were €26,022 million, compared to €24,693 million in 2023, showing an increase of about 5.4% [60]. Currency Adjustments - Constant currency measures are used to provide additional insights into sales performance, with adjustments made for foreign currency effects [55].