SAP SE (NYSE:SAP) stock rose 5.36% (As on April 21, 1:10:12 AM UTC-4, Source: Google Finance) after the company reported first-quarter revenue above analysts’ expectations, backed by growth in its cloud business but lowered its outlook for the year due to the divestment of its Qualtrics unit. SAP, which in January announced plans to cut 3,000 jobs as it looked to cut costs, foresees no more restructuring this year and plans to use artificial intelligence technologies like generative AI in its products. Revenue from SAP’s lucrative cloud business grew 24% year-on-year, broadly in line with consensus. SAP has already discounted subsidiary Qualtrics’ profits, which it divested last month, from the current earnings report. Current cloud backlog up 25%, both at nominal and constant currencies, a sequential growth improvement of 1 percentage point.  The non-IFRS cloud gross profit up 28% and up 27 % at constant currencies fueling double-digit non-IFRS operating profit growth. The  non-IFRS operating profit up 12% and up 12% at constant currencies. 2023 outlook updated to reflect the expected Qualtrics divestiture. SAP reaffirms outlook for continuing operations including anticipated acceleration of topline and operating profit growth.

SAP in the first quarter of FY 23 has reported the adjusted earnings per share of 35 cents, missing the analysts’ estimates for the adjusted earnings per share of $1.12. The company had reported the adjusted revenue growth of 9.9 percent to $7.44 billion in the first quarter of FY 23, beating the analysts’ estimates for revenue of $7.36 billion.

For the year, SAP expects non-IFRS operating profit in the range of 8.6-8.9 billion euros, 200 million euros less than before. That’s ahead of analysts’ €8.49 billion estimate, according to the average in a Bloomberg survey. Cloud revenue forecast is seen down by 1.3 billion euros to between 14 and 14.4 billion euros.

Meanwhile, SAP has successfully closed a new sustainability-linked revolving credit facility with a volume of €3 billion and a tenor of five years plus two one-year extension options. The facility was syndicated among a group of 20 core relationship banks. A possible future drawdown is not bound to any financial covenants. The new facility replaces the existing €2.5 billion facility. In line with SAP’s strategic commitment to sustainability, a sustainability component has been embedded in the new credit facility for the first time. The included ESG-component links the margin of the new facility to the company’s net zero carbon and women in management ambitions.