SAP SE (NYSE:SAP) Q4 2023 Earnings Call Transcript

Anthony Coletta: Thank you, Michael. And we will now take the final question.

Operator: And the final question is from the line of Mohammed Moawalla with Goldman Sachs International. Please go ahead. Your line is open.

Mohammed Moawalla: Great. Thank you. Good morning and congratulations on the quarter again. My main question is really around the kind of S4 product cycle. Obviously, we have seen the robust TCV and ACV. In terms of kind of the key constraints you see on converting that backlog into revenue, we have heard about system integrated constraints in the system, how confident are you around that kind of – as you get to the sweet spot of this product cycle in kind of converting that? And are there any other kind of bottlenecks beyond sort of integrated capacity that you see in realizing the kind of value of that product cycle? Thank you.

Christian Klein: Yes. Mohammed, thanks for the question. I mean, Davos is very helpful to also meet all of our partners actually in only three days. And there was one consistent feedback. I mean, of course they in 2023, they saw strong momentum. The SAP practice was growing faster than anything else in that portfolio. While we were already working with them in 2023 to ramp up capacity, and that will continue in 2024, we will give them access to our academies, we will also launch further enablement programs, we will also onboard further partners for RISE. We just today shared a few announcements on who is joining, also here, our RISE movement. So, there is a lot of action in the ecosystem. Now for 2024, indeed, we are actually reviewing especially for the large enterprise customers, we are reviewing the transformation, the fit to standard, the BDP adoption.

And also where we are promising all our partners are also ramping on our AI practices, as they are seeing what is coming on the roadmap for business AI, which now also needs to come to adoption. So, they are investing into SAP as they also remain very confident for the years to come, also looking at the pipeline we are driving together. So yes, there were some capacity challenges, but we are working heavily with our partners to ramp up for capacity.

Mohammed Moawalla: Thank you.

Anthony Coletta: Alright. Thank you and this concludes our call for today. Thanks for joining.

Christian Klein: Thanks a lot.

Operator: Ladies and gentlemen, the conference is now concluded.