German giant SAP has seen its share price fall by ten per cent, the biggest slump in almost five years, according to Bloomberg, as its Q2 results indicate that its cloud software investments have failed to save the vendor from a double-digit drop in operating profits.
Cloud revenue did rise by eleven per cent year on year. However, that is short of the fourteen per cent that Wall Street had forecast.
Meanwhile, operating profits tumbled by 21 per cent to $827m.
Over the last 15 months, the Walldorf-based behemoth has spent almost $10bn ((€8.92bn) in an effort to pivot to cloud-based software, acquiring first CallidusCloud, then Qualtrics International.
However, analysts point to the ongoing US-China trade war as having significantly dented demand, particularly in Asia.
Licensing revenue fell by five per cent.
Software licences and support still make up for more than half of its revenue and the majority of its profits.
Nonetheless, CEO Bill McDermott told investors that its recent acquisitions will soon add to the firm's bottom line.
"SAP delivered double digit growth in total revenue, cloud revenue and non-IFRS operating income," he said.
"Qualtrics is growing fast as the global standard in the Experience Management category….We are progressing nicely on our ambition to be the Best-Run SAP."
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