SAP financial results Q4 2016: Revenue forecasts raised following on-target profits of €6.6 billion and continued cloud momentum

SAP posted a strong close to 2016 following a slow start, eventually meeting its annual targets comfortably with total operating profits up four percent to €6.6 billion (non-IFRS).

SAP continued its strong cloud momentum, posting cloud subscriptions and support revenue up 30 percent to €2.9 billion for the full year. Classic software licences and support revenue was up a modest three percent for the year to €15.4 billion. Cloud now makes up 13.5 percent of SAP's total business, up from 11 percent this time last year.

In terms of the fourth quarter alone, operating profit rose four percent to €2.37 billion, in between Reuters analyst estimates of between €2.28-2.6 billion. SAP also continued to trumpet its cloud bookings, posting new bookings up 40 percent to €483 million. Traditional software licenses and support for Q4 was up too, but only by four percent to €4.93 billion.

SAP has set a conservative revenue target for 2017 of between €23.2 to €23.6 billion, a small increase from its 2016 target of €23 to €23.5 billion. The company has bullishly raised its 2020 total revenue outlook to between €28 and €29 billion, up from €26 to €28 billion previously, showing a growing confidence in its cloud offerings to bring in new revenue.

S/4HANA adoption

SAP continues to push its next generation enterprise resource planning (ERP) software and its underlying HANA database to customers. SAP reported that it now has 5,400 businesses running S/4HANA, up from 4,100 at the end of Q3. Of those new customers, SAP says 30 percent are new to the company.

We wrote last week about how SAP is targeting new customers by rebuilding its S/4HANA product roadmaps from the ground up, and is working on a new online tool for customers to forecast what effect adoption would have on their business.

Read next: SAP responds to S/4HANA roadmap criticism with launch of 'navigator' tool

SAP CEO Bill McDermott couldn't resist throwing barbs at SAP's competitors, seemingly targeting both its old rival Oracle and newer cloud rivals Workday and Salesforce.

He told investors today: "Our cloud revenue grew to 31 percent, which is on par or better than quote-on-quote best in breed cloud companies. Our cloud and software grew eight percent, which significantly outpaced our main competitor."