Despite Q2 Earnings Dip, SAP Raises Cloud Outlook

German software provider SAP SE (SAP) announced its Q2 2014 results, with net income down about 23 percent year over year to €556 million from €724 million and earnings per share down to €0.47, as it sees a decline in its on-premises software and services sales.

However, that which is hurting its on-premises business—the cloud—was also the company’s earnings bright spot, cloud subscriptions and support revenue up 52 percent from the same quarter a year ago to €241 million.

As a result, SAP raised its outlook for its cloud-based offerings for 2014.

“With 8 percent constant currency growth in non-IFRS (International Financial Reporting Standards) software and software-related service revenue, we are delivering solid growth at the high end of our full-year outlook range. We continue to improve our profitability with operating profit up 7 peercent on a non-IFRS constant currency basis leading to double-digit growth in non-IFRS EPS,” said SAP CFO Luka Mucic in a statement. “As we continue to expand our cloud business we have increased our full year non-IFRS cloud subscriptions and support revenue outlook to €1,000-€1,050 million at constant currencies.”

SAP noted the continued adoption of SAP HANA, with more than 3,600 customers, and SAP HANA Business Suite platforms, with more than 1,200 customers. Additionally, according to the company said, more than 1,500 startup companies are working on building applications on HANA as SAP continues to foster relationships with Hewlett-Packard (HPQ) and VMware (VMW).

“We are successfully executing our shift to the cloud helping customers run simple—from total workforce management in the cloud to frictionless commerce through the world’s largest business network,” said CEO Bill McDermott. “And we are redefining customer engagement with our omni-channel e-commerce platform—all of this in real-time demonstrating our clear commitment to be The Cloud Company powered by SAP HANA.”

The company earlier this week announced its new SMB Solutions Group, a division dedicated to raising the company’ stake among small and medium-sized businesses. The new division will be headed by newly appointed SAP executive Dean Mansfield, furthering the company’s efforts to saturate the cloud market at all levels.