SAP Remains on Growth Path in Q3

Demand for business application software from SAP appears stronger than ever, with the German company reporting yet another quarter of significant sales growth.

Software license revenue, a gauge of future fees from consulting and maintenance, rose 17 percent in the third quarter to 691 million euros (US$877 million as of Sept. 30, the last day in the period being reported) from 590 million euros in the same period a year earlier, SAP said Thursday.

Total revenue in the third quarter increased 11 percent to 2.2 billion euros from 2 billion.

Buoyed by strong sales, net income in the third quarter rose 16 percent to 388 million euros, or 1.27 per share, from 334 million euros, or 1.08 per share, in the previous year’s period.

In the United States, the company’s fastest-growing market, SAP posted its 16th consecutive quarter of double-digit growth.

Third-quarter software license revenue in the United States climbed 15 percent to 228 million euros. License revenue in the Americas was up 19 percent to 292 million euros.

In Europe, the Middle East and Africa, software revenue rose 14 percent to 301 million euros, with Germany—SAP’s home market—showing a 3 percent increase.

Software revenue in the Asia-Pacific region was up 22 percent to 98 million euros. In Japan, an underperforming market for SAP in recent months, revenue surged 51 percent to 39 million euros.

SAP confirmed its forecast that 2006 software license revenue should rise between 15 percent and 17 percent.

-John Blau, IDG News Service (Dusseldorf Bureau)

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