SAP reported an 8% jump in its second-quarter net income on today, helped by a sharp increase in revenue from new software licences.
Net income for the quarter was €449 million (£336m as of June 30, the last day of the period being reported), up from €415m (£280m) in the second quarter last year. That was equal to earnings of €0.37 per share, up from €0.34 per share a year earlier.
Revenue from new software licences climbed 18% to €715m (£482m), from €604m (£407m) last year. Total revenue, including maintenance fees, support and other services, climbed 10% to €2.4 billion (£1.6bn), up from €2.2bn (£1.5bn) in the second quarter of 2006.
The results were better than some analysts expected and showed that SAP is continuing to add new customers even while its main rival, Oracle, grows its applications business through acquisitions. For the comparable period, its financial quarter ending May 31, Oracle increased revenue from new applications licences by 13%, to $641m (432m).
In SAP’s biggest market – Europe, the Middle East and Africa – total revenue was up by 12%, to €1.270bn (£856m). Growth in the Americas, dragged down by the strong euro against the US dollar, was just 6%, to give revenue of €853m (£575m). SAP continues to grow fastest in Asia, where revenue climbed 20% to €304m (£205m).
CEO Henning Kagermann called it “an excellent quarter”. SAP will continue to invest heavily in new products for the midmarket, he said in a statement. The company is spending €300m (£202m) to €400m (3269m) over two years to develop a new suite of on-demand applications, intended to offset slower growth from large enterprises.
The results come as SAP continues to battle Oracle in U.S. court for alleged corporate theft. Oracle charged that SAP's TomorrowNow subsidiary hacked into Oracle's customer support website and downloaded software fixes and support materials for Oracle's PeopleSoft and JD Edwards applications. SAP planned to use the materials to offer cut-rate services to Oracle customers, according to Oracle's lawsuit.
In its response last month, SAP admitted that TomorrowNow employees had made some “inappropriate” downloads of Oracle materials. But it played down the extent of the transgressions and said SAP itself did not have access to the materials. A case management conference is set for September.