Business software maker, SAP on Friday 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.
While tougher economic conditions have riled big technology
companies, SAP has still been able to grow its revenue by 10 percent in the
first quarter to EUR 7.44 billion, beating a company-provided consensus.
It said it was working with Microsoft-backed OpenAI's
chatbot ChatGPT that can provide human-like responses to questions.
We were studying ChatGPT for quite a while... we have built
over 50 AI use cases, embedding them with our technology," CEO Christian
Klein said in an interview. Those use cases will be available to customers next
month after its annual Sapphire conference, he said.
SAP also has an internal committee with customers,
researchers and analysts to check for biases in AI use cases and guard against
potential misuse of the technology, Klein said.
Revenue from SAP's lucrative cloud business grew 24 percent
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.
For the year, SAP expects non-IFRS operating profit in the
range of EUR 8.6 million - EUR 8.9 billion, EUR 200 million less than before.
Cloud revenue forecast is seen down by EUR 1.3 billion to between EUR 14 and
EUR 14.4 billion.
"Underlying guidance is essentially unchanged, although
updated to reflect the disposal of Qualtrics," Jefferies analysts wrote in
a client note. © Reuters
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