WALLDORF, Germany, Oct. 6 /PRNewswire-FirstCall/ -- SAP AG (NYSE: SAP) announced today that after a preliminary review of its 2008 third quarter revenues, it expects third quarter 2008 U.S. GAAP software and software-related service revenues to be between ?1.970 billion and ?1.980 billion (2007: ?1.74 billion), representing an increase of 13% - 14% compared to the third quarter of 2007. Non-GAAP software and software-related service revenues, which exclude a non-recurring deferred support revenue write-down from the acquisition of Business Objects of around ?40 million, for the third quarter of 2008 is expected to be between ?2.010 and ?2.020 billion (2007: ?1.74 billion). This represents an increase of 16% - 17% (20% - 21% at constant currencies) compared to the third quarter of 2007.
'The market developments of the past several weeks have been dramatic and worrying to many businesses. These concerns triggered a very sudden and unexpected drop in business activity at the end of the quarter,' said Henning Kagermann, Co-CEO of SAP. 'Throughout the third quarter we felt quite positive about our ability to meet our expectations. Unfortunately, SAP was not immune from the economic and financial crisis that has enveloped the markets in the second half of September, causing us to report numbers below our expectations.'
Third quarter 2008 U.S. GAAP software revenues are expected to be between ?740 and ?750 million (2007: ?715 million), representing an increase of 4% - 5% (7% - 9% at constant currencies) compared to the third quarter of 2007.
'The overall fundamentals of our business remain in place. SAP did report double-digit growth in software and software-related service revenues for the quarter and we expect to have gained further market share, even during unfavorable market conditions. This is the result of our leading product portfolio, our widely diversified customer base and our geographic and industry diversification and strength. We will continue to assess and monitor the situation and report back at the end of the month,' concluded Mr. Kagermann.
Regional Performance
On a U.S. GAAP basis, the Americas region is expected to report software and software-related service revenues growth of around 12% for the third quarter of 2008 compared to the third quarter of 2007. The EMEA region is expected to report U.S. GAAP software and software-related service revenues growth of around 14% for the third quarter of 2008 compared to the third quarter of 2007. The APJ region is expected to report U.S. GAAP software and software-related service revenues growth of around 18% for the third quarter of 2008 compared to the third quarter of 2007.
On a Non-GAAP basis, the Americas region is expected to report software and software-related service revenues growth of around 16% (around 23% at constant currencies) for the third quarter of 2008 compared to the third quarter of 2007. The EMEA region is expected to report Non-GAAP software and software-related service revenues growth of around 16% (around 18% at constant currencies) for the third quarter of 2008 compared to the third quarter of 2007. The APJ region is expected to report Non-GAAP software and software-related service revenues growth of around 18% (around 24% at constant currencies) for the third quarter of 2008 compared to the third quarter of 2007.
Nine Month 2008 Performance
Nine months 2008 U.S. GAAP software and software-related service revenues are expected to be between ?5.770 billion and ?5.780 billion (2007: ?4.95 billion), representing an increase of 16% - 17% compared to the first nine months of 2007. Non-GAAP software and software-related service revenues for the first nine months of 2008, which exclude a non-recurring deferred support revenue write-down from the acquisition of Business Objects of around ?140 million, are expected to be between ?5.910 and ?5.920 billion (2007: ?4.95 billion). This represents an increase of 19% - 20% (25% - 26% at constant currencies) compared to the first nine months of 2007.
