SAP Announces Q4 and FY 2024 Results

Financial Performance - Q4 2024 cloud revenue grew 27% to €4.71 billion, driven by a 35% increase in Cloud ERP Suite revenue to €3.95 billion [10] - Full-year 2024 cloud revenue increased 25% to €17.14 billion, with Cloud ERP Suite revenue up 33% to €14.17 billion [6][17] - Total cloud backlog reached €63.29 billion, up 43% year-over-year [6][16] - Non-IFRS operating profit for 2024 increased 25% to €8.15 billion, with a margin of 23.9% [19] - Free cash flow for 2024 was €4.11 billion, down 19% due to restructuring payouts of €2.5 billion [21] Cloud and AI Strategy - Half of Q4 cloud order entry included AI, reflecting the company's strong position in Business AI [2] - Cloud ERP Suite, including SAP S/4HANA Cloud and SAP Business Technology Platform, contributed €14.17 billion in revenue, up 33% [6][17] - The company launched collaborative AI agents and SAP Green Ledger, a comprehensive carbon accounting system [31][32] - "RISE with SAP" and "GROW with SAP" offerings drove significant customer adoption, including BASF, BP, and Ford Motor Company [27][28] Regional and Customer Performance - Q4 cloud revenue growth was strong in APJ and EMEA, with outstanding performances in China, France, and India [30] - Full-year cloud revenue growth was led by China, Germany, and India, with Brazil and Saudi Arabia also showing strong results [30] - Key customer wins included ABB, Bayer, and PwC Germany, with notable go-lives for SAP S/4HANA Cloud by Coles Group and General Motors [29][28] 2025 Outlook - Cloud revenue is expected to grow 26%-28% to €21.6-21.9 billion at constant currencies [37] - Non-IFRS operating profit is projected to increase 26%-30% to €10.3-10.6 billion [37] - Free cash flow is anticipated to nearly double to approximately €8.0 billion, based on updated definitions [37] - Current cloud backlog growth is expected to slightly decelerate in 2025 [34] Transformation and Restructuring - The 2024 transformation program incurred €3.2 billion in expenses, with €2.5 billion paid out in 2024 and €0.7 billion expected in 2025 [25] - Restructuring expenses impacted IFRS operating profit, which declined 20% to €4.66 billion [19] - The program focused on scalability and strategic growth areas, with payouts affecting free cash flow [25][21] Non-Financial Metrics - Customer Net Promoter Score (NPS) increased to 12, at the upper end of the outlook range [22] - Employee engagement index recovered to 76% in H2 2024, ending the year at 74% [22] - The proportion of women in executive roles increased to 22.5%, in line with targets [23] - Carbon emissions remained flat at 6.9 Mt, missing the initial guidance for a decrease [23]