SAP Announces First Quarter 2014 Results

Successfully Transitioning to the Cloud with 38% Constant Currency Growth in Non-IFRS Cloud Subscriptions and Support Revenue

DUBAI, United Arab Emirates – April 24, 2014 – SAP AG (NYSE: SAP) has announced its financial results for the first quarter ended March 31, 2014.

•Fast Cloud Growth Ahead of Annual Outlook Growth Range: Non-IFRS Cloud Subscriptions and Support Revenue Increased 38% at Constant Currencies (32% at Actual Currencies)

•Strong Cloud Billings Growth: Non-IFRS Calculated Cloud Billings Increased 36% at Constant Currencies; Annual Cloud Revenue Run Rate Approaching €1.1 Billion

•SSRS Revenue Growth Ahead of Annual Outlook Growth Range: Non-IFRS Software and Software-Related Service Revenue Increased 9% at Constant Currencies (4% at Actual Currencies to €3.06 Billion Impacted by Strong Currency Headwinds)

•Broad Adoption of SAP HANA as the Real-Time Business Platform: More Than 3,200 HANA Customers, Approaching 1,000 Customers for Business Suite on HANA, Vibrant Ecosystem with More Than 1,200 Start-Ups Developing on HANA Platform

•Growing Operating Profit and Accelerating Shift to the Cloud: Non-IFRS Operating Profit Increased 7% at Constant Currencies (2% at Actual Currencies to €919 Million Impacted by Strong Currency Headwinds)

BUSINESS HIGHLIGHTS IN THE FIRST QUARTER 2014

SAP is successfully transitioning to the cloud demonstrated by fast growth in cloud and a solid performance in the core business, which drove revenue growth in the first quarter 2014. Non-IFRS cloud subscriptions and support revenue increased 38% at constant currencies (32% at actual currencies). Non-IFRS software and support revenue increased 7% at constant currencies (2% at actual currencies). Non-IFRS software and software-related service revenue grew 9% at constant currencies (4% at actual currencies).

“We are well on our way to becoming THE cloud company powered by SAP HANA with fast growth in the cloud and broad adoption of HANA as the real-time business platform,” said Bill McDermott and Jim Hagemann Snabe, Co-CEOs of SAP. “We offer our entire Business Suite in the cloud and are leading the market with the most comprehensive end-to-end HR cloud solution. And our customers can manage all workers, goods and services through the world’s largest business network in the SAP cloud.”

“Our 9% constant currency growth in non-IFRS software and software-related service revenue puts us ahead of our annual outlook growth range,” said Werner Brandt, CFO of SAP. “We slightly increased our operating margin while accelerating our cloud business. Operating profit was up 7% on a non-IFRS constant currency basis in the quarter driving strong operating cash flow, which increased by 9% to €2.35 billion. This result brought us back to positive net liquidity in a relatively short time frame after sizable acquisitions in the past two years.”

SAP’s annual cloud revenue run rate is now approaching €1.1 billion(1) or $1.5 billion(2). Non-IFRS calculated cloud billings(3) increased 36% year-over-year at constant currencies. Non-IFRS deferred cloud subscriptions and support revenue was €454 million as of March 31, 2014, a year-over-year increase of 29% at constant currencies. SAP’s cloud applications total subscribers now exceed 36 million, which is the most of any vendor in the industry today.

SAP’s customer-facing solutions are defining the next generation of customer engagement. The hybris omni-channel e-commerce platform in combination with SAP Cloud for Sales is seeing triple-digit growth in software and cloud subscriptions and support revenue as companies redefine customer engagement and retention and unlock new cross-sell and upsell opportunities in real-time.

In Cloud for Procurement, SAP continues to scale the world’s largest Web-based business trading community with trailing twelve month Ariba network spend volume(4) exceeding $0.5 trillion and around 1.5 million connected companies.

SAP HANA had a strong adoption rate in the first quarter, demonstrating that it is the leading real-time business platform. SAP now has more than 3,200 SAP HANA customers since market launch in June 2011 and close to 1,000 customers for SAP Business Suite powered by SAP HANA, which was launched just one year ago. SAP HANA is also evolving into the leading technology platform: there are more than 1,200 startups from 57 countries building applications on SAP HANA. Of these startups, more than 60 already have commercially available products on the market today.

SAP is also expanding its vibrant partner ecosystem. Accenture will use the Ariba Network to power their procurement business process outsourcing practice. SAP expects this will significantly drive connected companies and transaction volume. Together the companies have also formed the Accenture and SAP Business Solutions Group, which includes dedicated experts from both companies, to jointly develop integrated, industry-specific solutions powered by SAP HANA and delivered via the Cloud.

SAP has also entered into a new strategic partnership with Adobe which combines Adobe Marketing Cloud with the SAP Hybris Commerce Suite and the SAP HANA platform. Adobe and SAP will deliver real-time customer engagement with relevant, contextual experiences across numerous marketing channels and customer touch-points. This will redefine customer engagement and retention in the fast changing and highly competitive consumer world.

(1) The annual revenue run rate is the total of first quarter 2014 non-IFRS cloud subscriptions and support revenue (€221 million) plus Non-IFRS cloud-related professional services and other service revenue (€43 million) multiplied by 4. This definition has changed from the previous year. Please see the interim report for more details.

(2) Translated into USD for reader’s convenience based on $/€ exchange rate of $1.38/€1.00 at the end of the first quarter 2014.

(3) Calculated cloud billings is the total of a period's cloud subscriptions and support revenue and of the respective period's change in the deferred cloud subscriptions and support revenue balance.

(4) Network spend volume is the total value of purchase orders transacted on the Ariba Network in the trailing 12 months.