The German software company started the financial year with strong cloud revenue, but it recognized that exiting the Russian market will impact its bottom line. Credit: Peter Sayer/IDG German software group SAP reported first-quarter revenue growth of 11% for 2022 on Friday, driven in large part by its cloud business. The company’s cloud revenue climbed 31% to €2.8 billion (US$3.02 billion) in the first quarter of 2022, while revenue for its S/4HANA cloud software was €400 million, up 78% year-on-year. Total revenue for the quarter rose to €7.1 billion from €6.4 billion in 2021, which was also above analyst expectations of €6.9 billion. However, SAP’s recent exit from Russia will see the company take an expected revenue hit of around €300 million Impact of the war in Ukraine In early March, SAP publicly announced it was suspending operations in Russia after Ukrainian vice prime minister Mykhailo Fedorov publicly appealed for it to do so. Earlier this week, the company released another statement, saying it was taking further steps toward an orderly exit from the country, having already halted all sales in both Russia and Belarus and begun the process of shutting down all cloud operations in Russia. Despite the impact on its Russian business, SAP confirmed its 2022 forecast for cloud revenue is expected to be between €11.5 billion and €11.9 billion. On an earnings call with analysts, SAP CEO Christian Klein said that despite the challenging political and macroeconomic environment, the first quarter had been strong, before acknowledging that the decision to exit the Russian market will have “a financial impact, both on the top and bottom line.” On the same call, SAP’s CFO Luka Mucic told analysts the company was taking steps to absorb the expected impact of approximately €300 million on its revenues. “This is possible because of our increased cloud momentum, the initiation of disciplined expense management measures and the benefits associated with the streamlining of our portfolio that we expect to execute in the coming months as we continue to focus on strategic growth drivers,” Mucic said. Related content opinion Faultless with serverless: Cloud best practices for optimized returns What does a well-defined serverless approach look like? Let's learn some of the best modern approaches to handling Enterprises and SMEs growing serverless computing needs. By Yash Mehta May 30, 2024 5 mins Serverless Computing feature Process mining helps IT leaders modernize business operations With a blend of data science and process improvement, CIOs are mining data to transform business processes for efficiency, improved resource allocation, and better results. By Bob Violino May 30, 2024 11 mins Business Process Management Data Mining Robotic Process Automation feature How Italian CIOs produce value with gen AI Chatbots, content synthesis, and software development support are areas where gen AI projects are not just underway, but driving further uses. The most encouraging benefit, however, is its ability to bring IT and business closer together. By Patrizia Licata May 30, 2024 7 mins CIO Chatbots Code Editors interview CIO Bhavani Amirthalingam on driving change in the AI era The chief customer and technology officer firmly believes that leading large-scale transformation successfully requires robust change management practices from day zero. By Dan Roberts May 30, 2024 10 mins Digital Transformation Change Management IT Leadership PODCASTS VIDEOS RESOURCES EVENTS SUBSCRIBE TO OUR NEWSLETTER From our editors straight to your inbox Get started by entering your email address below. Please enter a valid email address Subscribe