SAP said its third quarter revenue rose 14% year on year, and operating profit more than doubled according to International Financial Reporting Standards (IFRS), boosted by a recalculation of the sum set aside to settle litigation with Oracle over its SAP's former TomorrowNow subsidiary.
Excluding that change and a handful of other exceptional items, non-IFRS third-quarter revenue rose 12% to 3.41 billion ($4.69 billion as of Sept. 30, the last day of the period reported) and operating profit jumped 23% to 1.127 billion, the company said Friday, announcing the preliminary, unaudited results. The company will publish full third-quarter results on Oct. 26, it said.
Currency fluctuations hit third-quarter profit: At constant currency rates, year-on-year non-IFRS operating profit growth would have been 26%, SAP said.
The company saw the fastest growth in software revenue, at around 28%, with revenue from software and software-related services growing 14%.
With only one quarter to go, SAP still says the outlook for the full year is unclear given current economic uncertainties. The company has not changed its previous guidance, repeating that it expects software and software-related service revenue to increase by between 10% and 14%. It did not offer guidance on software revenue growth, but said companies continue to invest in IT in general, and innovative software solutions in particular.
SAP reduced its provisions for settlement of the TomorrowNow litigation by 723 million, allowing it to report that sum as operating profit. The jury had originally called for SAP to pay Oracle of $1.3 billion, but the judge lowered that to $272 million, giving Oracle the option of seeking a new trial. As Oracle is seeking the right to make an early appeal, the company has not yet announced whether it will accept the reduced sum.
Other exclusions from the IFRS results included a 1 million write-down for deferred support revenue from acquisitions, acquisition-related charges of 110 million, share-based compensation expenses of 17 million and restructuring expenses of 1 million.
Peter Sayer covers open source software, European intellectual property legislation and general technology breaking news for IDG News Service. Send comments and news tips to Peter at firstname.lastname@example.org.