Thread regarding SAP layoffs

Q2/2022 results - RIF could be coming

Early release of SAP's Q2 results show that Operating Profit Forecast is expected to report a drop from 1.92B last year to 1.74 B this year. While total revenue is expected to post higher, this ongoing problem of Operating Profit falling behind continues to hinder SAP's performance.

The obvious solution towards improving operating profit is to reduce employee expense. It seems that all the folks around me are pretty worried that a RIF is coming.

With a new CFO expected in the next months I am concerned that by year end we will see some significant layoffs to close this gap on Operating Profit which no doubt is a sore topic for the investor community.

How do other areas of SAP see it?

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| 2341 views | | 11 replies (last July 21, 2022) | Reply
Post ID: @OP+1hO93e1n

11 replies (most recent on top)

The early forecast numbers were available on any number of financial sites as early as the day before the earning call - anyone could have pulled up this info. Next quarter just search for yourselves and you get it on your own.

But amazing at how many posts are just focused on the revenue numbers and very few are looking at the more important profitability numbers.

Get past the external talking points and look at what is happening here. Profit is suffering because of expenses, this is not rocket science. And of all our expenses ( travel, infrastructure...) it is the employee expense that hurts us the most... it has been said several times on this site, but SAP has done a very poor job at onboarding all of the acquisitions over the last 15 years and just kept bringing in more and more people from these acquisitions without any internal strategy on how to control employee growth and still today there is no strategy on this topic and hence we continue to have significant negative impact on revenue not to speak of duplication on roles and responsibilities throughout the organization

So should be no surprise that year after year our operating margin and operating profit are declining and why those who are running the company attempt to distract from the real problem impacting profit which is poor leadership and how to deal with too many employees and blame the poor profits closing down on Russia biz, bad debt expense from Russia, SW licenses sales decline in Russia, etc.... ( whoever knew how much of SAP's total profits depended on Russia 😜 )

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Post ID: @1agz+1hO93e1n

Thanks for posting Q2 results on Qualtrics - we know they have been quite good. We need to mirror this performance over at SAP!!

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Post ID: @1gbv+1hO93e1n

A bit confused in reading all the comments that speak to such a steller Q2 performance by SAP.

My question is, if the quarter was so good, then why on the heels of the release of Q2 results is SAP stock down almost 3% in Germany and almost 4% in US ?

It's all about Profit not Revenue.

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Post ID: @1yow+1hO93e1n

Looks like the author was correct in her forecast numbers.

I know this is not news everyone wants to hear but revenue being up YOY is not the benchmark that is looked for - what everyone ( mostly investors) want to see is "PROFIT".

And here are the facts about our profit:

  • Non-IFRS profit after tax was at 1.093 billion euros, versus 2.214 billion euros, year-over-year basis.
  • Operating earnings were at 673 million euros as against 984 million euros of previous year period.
  • Non-IFRS operating income dropped to 1.680 billion euros, from 1.992 billion euros of 2021.

We can all stick our heads in the sand and just look for the pieces of performance that show improvement but if the facts of overall performance and why investors place money into SAP ( i.e. Profit) we won't be too happy with what is to come.

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Post ID: @1zsn+1hO93e1n

SAP Announces Q2 and Half-Year 2022 Results

Cloud revenue up 34% and up 24% at constant currencies to become the largest revenue stream
Current cloud backlog exceeds €10 billion, up 34% and up 25% at constant currencies
SAP S/4HANA current cloud backlog extends its growth trend, up 100% and up 87% at constant currencies
Cloud gross profit up 39% (IFRS), up 38% (non-IFRS) and up 28% (non-IFRS at constant currencies), leading to a strong cloud gross margin expansion
IFRS operating profit down 32%, non-IFRS operating profit down 13% and down 16% at constant currencies, primarily due to the impact of the war in Ukraine
SAP reaffirms 2022 revenue and free cash flow outlook, updates operating profit outlook range

https://news.sap.com/2022/07/sap-announces-q2-and-half-year-2022-results/

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Post ID: @1vmo+1hO93e1n

Dow Jones Newswire, July 19, 2022....
"SAP Expected to Post Higher 2Q Revenue Amid Cloud Momentum -- Earnings Preview"

https://www.marketwatch.com/story/sap-expected-to-post-higher-2q-revenue-amid-cloud-momentum-earnings-preview-271658222750

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Post ID: @1ura+1hO93e1n

@def+1hO93e1n
If you look at the author's history she seems to have Christian Klein fixation (obsession?)... 4 articles since September of last year, all negative.
Just saying.

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Post ID: @1bbo+1hO93e1n

Qualtrics Q2 2022 results.

Q2 2022 total revenue of $356.4M, up 43% year over year
Q2 2022 subscription revenue of $300.6M, up 47% year over year
Total remaining performance obligations1 of $1,798.0M, up 39% year over yearNext 12 months remaining performance obligations of $1,038.3M, up 38% year over year

https://www.businesswire.com/news/home/20220720005882/en/%C2%A0Qualtrics-Announces-Second-Quarter-2022-Financial-Results

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Post ID: @1dub+1hO93e1n

@OP+1hO93e1n. Please share your source for this early release. I find nothing reported. No news releases. Additionally, nothing internal...

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Post ID: @1swp+1hO93e1n

Funny... I heard just the opposite. How about we just wait to see what they announce tomorrow.... you know, instead of just posting made up nonsense designed to frighten employees. Grow up.

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Post ID: @1lzs+1hO93e1n

https://www.manager-magazin.de/unternehmen/tech/sap-verliert-manager-wie-christian-klein-in-walldorf-den-frust-schuert-a-a2f8b342-afcd-41d9-b8f8-e34a9f53ba52

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Post ID: @def+1hO93e1n

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