Full Year 2024 SAP SE Earnings Call Transcript
Key Points
- SAP SE (SAP) reported a record total cloud backlog of EUR63 billion at the end of 2024, marking a 40% increase over the previous year.
- Cloud revenue expanded by 27% in Q4, contributing to double-digit total revenue growth for the third consecutive quarter.
- SAP SE (SAP) achieved all its cloud goals for 2024 despite macroeconomic headwinds, demonstrating resilience and strategic execution.
- The company has successfully integrated AI into its offerings, with half of its cloud order entries in Q4 including AI use cases.
- SAP SE (SAP) is seeing strong adoption of its AI solutions, with more than 30,000 customers using SAP Business AI, and plans to significantly increase AI investments in 2025.
- Software licenses revenue decreased by 21%, indicating a continued shift away from traditional licensing models.
- Free cash flow for the full year was down 19% to EUR4.1 billion, despite exceeding the revised outlook range.
- There is a slight deceleration expected in the current cloud backlog (CCB) growth for 2025, which may impact future revenue growth.
- The company faces challenges in maintaining momentum in the installed base's upgrade cycle to S4, with only 40% of customers currently on the move.
- SAP SE (SAP) is dealing with complexities in its go-to-market strategy and cost management, requiring ongoing transformation and efficiency improvements.
Ladies and gentlemen. And thank you for joining the SAP Q4 2024 earnings conference call. Throughout today's recorded presentation, all participants will be in a listen-only mode. (Operator Instructions)
I would now like to turn the conference over to Alexandra Steiger, Global Head of Investor Relations. Please go ahead.
Good morning, everyone, and welcome. Thank you for joining us. With me today are CEO, Christian Klein; and CFO, Dominik Asam. On this call, we will discuss SAP's fourth quarter and full year results for 2024. You can find the deck supplementing this call as well as our quarterly statement on our Investor Relations website.
During this call, we will make forward-looking statements, which are predictions, projections or other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties that could cause actual results and outcomes to differ materially. Additional information regarding these risks and
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