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Yahoo
23-04-2025
- Business
- Yahoo
SAP SE (SAP) Q1 2025 Earnings Call Highlights: Strong Cloud Growth and Robust Profit Margins
Current Cloud Backlog: EUR18.2 billion, up 29%. Cloud Revenue: Increased by 26% year-on-year. Cloud ERP Suite Growth: 33% increase, accounting for 85% of total cloud revenue. Total Revenue: EUR9 billion, up 11%. Operating Profit: Non-IFRS operating profit up 58% to EUR2.5 billion. Cloud Gross Margin: Improved by 2.6 percentage points to 75%. Operating Cash Flow: Increased by 31% to EUR3.8 billion. Free Cash Flow: Increased by 36% to EUR3.6 billion. Basic IFRS Earnings Per Share: EUR1.52. Non-IFRS Earnings Per Share: EUR1.44. Warning! GuruFocus has detected 7 Warning Signs with PMT. Release Date: April 22, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. SAP SE (NYSE:SAP) reported a 29% increase in its current cloud backlog, reaching EUR18.2 billion in Q1 2025. Cloud revenue grew by 26% year-on-year, with the cloud ERP suite showing a 33% increase. Operating profit increased by 58% in Q1, driven by strong execution of SAP's transformation program. SAP SE (NYSE:SAP) maintained its position as the number one enterprise application software vendor according to IDC and Gartner. The company is seeing strong customer engagement across various industries, with significant deals in the automotive sector and public sector. Transactional cloud revenues experienced a slight decline in Q1, reflecting macroeconomic challenges. There is uncertainty regarding the impact of global trade disputes and tariffs on future conversion rates and revenue growth. The cloud revenue growth decelerated slightly from Q4, partly due to delayed ramp-ups from some deals. SAP SE (NYSE:SAP) faces potential risks from geopolitical tensions and tariffs, which could impact its cloud gross margins. The company acknowledges the difficulty in making projections for the entire year due to ongoing macroeconomic uncertainties. Q: Some companies have reported disruptions at the end of the quarter. Given the current environment, is your assumption that historical close rates will continue still valid? A: Christian Klein, CEO: Conversations with customers focus on gaining resiliency in supply chains and managing tariffs. Our pipeline remains solid, and we haven't seen deterioration in conversion rates. However, we are closely monitoring geopolitical developments. Q: Cloud revenue growth decelerated slightly from Q4. What caused this, and when can we expect growth to return to guidance levels? A: Dominik Asam, CFO: The deceleration was partly due to the timing of deal provisioning from Q4. We expect an acceleration in Q2 as these deals ramp up. Transactional revenues were weak due to macro conditions, but we anticipate improvement as the year progresses. Q: The current cloud backlog grew by 29%. Has it tracked above expectations, and what are you seeing in terms of market dynamics? A: Dominik Asam, CFO: The backlog growth was expected due to provisioning lead times. We are on track with our guidance for slight deceleration. We haven't seen significant changes in industry dynamics despite tariff uncertainties. Q: Can you explain how the Business Data Cloud differs from SAP Datasphere and its potential impact on revenue? A: Christian Klein, CEO: Business Data Cloud goes beyond Datasphere by providing a semantic layer that unifies SAP and non-SAP data. It enhances AI capabilities and offers significant value, leading to strong pipeline momentum. It is expected to be additive rather than replacing existing offerings. Q: With the number of large deals increasing, are you seeing any changes in customer behavior regarding deal size and scope? A: Christian Klein, CEO: We ensure large deals have quantified value and involve key decision-makers. The ramp-up of subscription fees aligns with the value delivered, providing stability even in uncertain times. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
21-02-2025
- Business
- Yahoo
Accor SA (ACCYY) (Q4 2024) Earnings Call Highlights: Strong Revenue Growth and Strategic Focus
Revenue: EUR5.606 billion, up 11% year-over-year. Recurring EBITDA: EUR1.120 billion, up 12% year-over-year. RevPAR (Revenue per Available Room): Up 5.7% for the full year, with a 5.8% increase in Q4. Net Unit Growth: 3.5%, in line with 3% to 4% guidance. Pipeline Growth: Up 3.8% year-over-year. Recurring Free Cash Flow: EUR614 million, with a 55% cash conversion of EBITDA. Shareholder Return: EUR686 million, equating to a 7.5% yield. Net Profit: EUR610 million for 2024. Earnings Per Share (EPS): EUR2.33, up 5% year-over-year. Net Debt: Approximately EUR2.5 billion at the end of 2024. Luxury and Lifestyle RevPAR Growth: 10% in Q4. Americas RevPAR Growth: 12% in Q4, primarily driven by Brazil. Middle East, Africa, Turkey RevPAR Growth: High single-digit growth in Q4. Dividend Proposal: EUR1.26 per share, 7% higher than 2023. Warning! GuruFocus has detected 6 Warning Signs with EADSF. Release Date: February 20, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Accor SA (ACCYY) reported a strong financial performance in 2024, with revenue reaching EUR 5.606 billion, up 11% from the previous year. Recurring EBITDA was close to the high end of guidance at EUR 1.120 billion, marking a 12% year-over-year increase. The company achieved a net unit growth of 3.5%, aligning with its guidance of 3% to 4%, and pipeline growth was slightly higher at 3.8%. Accor SA (ACCYY) returned EUR 686 million to shareholders in 2024, equating to a 7.5% yield based on the January 1 market cap. The company is optimistic about international travel recovery, expecting a 3% to 5% growth in 2025, with strong performance in the Middle East and improving conditions in Asia Pacific and China. Geopolitical fragmentation and economic contrasts pose challenges, with varying levels of happiness and economic conditions across regions. Eco-consciousness and climate control are not progressing in the right direction, necessitating more sensitivity to overtourism and climate policies. Occupancy rates are still about 2 points behind 2019 levels, indicating a need for further recovery in some regions. The company faces challenges in accurately assessing the purpose of trips, as business and leisure travel are increasingly combined. Accor SA (ACCYY) anticipates a drop in net unit growth for PME in 2025 due to the exit of some AccorInvest portfolio hotels. Q: Can you provide more details on the AccorInvest disposal process and any interest shown so far? A: Jean-Jacques Morin, Group Deputy CEO, explained that the disposal of AccorInvest is timely due to its strong performance and market recognition. There is significant interest in the unique portfolio, and while the negotiation will be complex, it is expected to attract considerable attention. Q: What are your expectations for 2025 in terms of RevPAR and net unit growth? A: Martine Gerow, CFO, stated that while 2025 won't have an event as large as the Olympics, there is a good pipeline of events. The company expects good momentum in 2025, although not at the same level as 2024. Net unit growth is expected to be higher in 2025 than in 2024. Q: How do you plan to handle the potential impact of climate change on your hotels? A: Sebastien Bazin, CEO, acknowledged the importance of assessing climate change risks. While there isn't a precise list of hotels that could be impacted, the company is aware of geographies with water shortages and fire hazards and has decided to slow down development in those areas. Q: Can you elaborate on the luxury and lifestyle segment's performance and future strategy? A: Martine Gerow, CFO, noted that the luxury and lifestyle segment saw a 12% growth in EBITDA, driven by strong M&F revenue growth. The company is focused on cleaning the existing portfolio and reviving brand standards, with a faster growth expected in the latter part of the 2023-2027 plan. Q: What are the key priorities for Accor over the next three years? A: Sebastien Bazin, CEO, outlined five priorities: operational excellence, faster growth in selected geographies, completing the AccorInvest sale, expanding Ennismore, and grooming talent within the company. These initiatives aim to strengthen Accor's position and ensure sustainable growth. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
