SAP Sap SE

   By Maria Armental 
 

SAP SE reported a 55% operating profit increase for the second quarter with revenue increasing 2%, as software license revenue, while still below normal levels, recovered more than expected.

"Software licenses revenue in Asia saw a solid rebound," Chief Financial Officer Luka Mucic said in a statement, adding that cost-cuts in response to the pandemic-related business disruption "drove strong operating profit and margin expansion."

ADRs, which have been trading at record levels, rose 5.5% to $155 in after-hours trading on the better-than-expected preliminary results for the June quarter.

The German software company, which is scheduled to report second-quarter results on July 27, said that based on preliminary figures, cloud revenue rose 21% to EUR2.04 billion, as business activity gradually improved.

Overall, revenue rose to EUR6.74 billion, beating Wall Street revenue projections, according to FactSet.

The company expects to end the quarter with about EUR6.65 billion in current cloud backlog, a roughly 20% increase.

Operating profit, meanwhile, rose 55% to EUR1.28 billion. On an adjusted basis, operating profit rose 8% to EUR1.96 billion, SAP said.

SAP affirmed financial projections for the year and 2023 targets.

"SAP's broad solution portfolio, unmatched industry and geographic diversification coupled with our strong base of more predictable revenue have allowed us to weather the COVID-19 crisis well in this quarter," Mr. Mucic said.

Write to Maria Armental at maria.armental@wsj.com

(END) Dow Jones Newswires

July 08, 2020 18:00 ET (22:00 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.