US-listed SAP shares rose +3.5% in Germany as it revealed Q2 revenue of €6.74bn (+1.2% Y/Y), above expectations. Operating cash flow and free cash flow grew strongly in the second quarter. This was mainly driven by positive effects from lower payments to suppliers and lower than expected income tax payments. The company raised its 2020 free cash flow forecast to ~€4bn (previously €3.5bn).
"This quarter demonstrated that our Intelligent Enterprise strategy clearly resonates with customers around the world. More than ever, the pandemic has proven that digitalization is no longer an option but a must-have to withstand challenging times and to achieve desired business outcomes. We will continue to invest in innovative offerings for our customers to drive business transformations and run complex business processes. We also aim to expand the ecosystem on our business technology platform to complement our solutions and foster growth."
Christian Klein, CEO.
Business activity gradually improved over the course of the second quarter following the global emergence of the COVID-19 crisis primarily in the last month of the first quarter. Software licenses revenue, while still below normal levels, recovered more than expected. In particular, the APJ region had a strong recovery in software licenses revenue.
In the second quarter, current cloud backlog2 was up 20% to €6.65bn (21% at constant currencies) with continued high demand for digital supply chain, e-commerce, cloud platform and Qualtrics solutions. Cloud revenue was impacted by lower pay-as-you-go transactional revenue as a result of the COVID-19 crisis and grew 21% year over year to €2.04bn (IFRS), up 19% to €2.04bn (non-IFRS) and up 18% (non-IFRS at constant currencies).
