SAP SE (NYSE: SAP) shares edged higher by 9% on Friday morning after the Company announced that Chief Executive Officer Bill McDermott would not renew his contract and step down from his position. Additionally, SAP also pre-announced its third quarter financial results.
McDermott joined SAP back in 2002 and eventually joined the executive board in 2008. For the past decade, McDermott has served as the Chief Executive Officer and led the Company to its dramatic growth during his tenure. McDermott has previously worked at Xerox and Gartner and has also served on the board of Ansys, Secureworks, and Under Armour.
Throughout McDermott’s reign, SAP made notable acquisitions such its move for Qualtrics for USD 8 Billion last year. Moreover, SAP also acquired Concur for USD 8.3 Billion, SuccessFactors for USD 3.4 Billion, and Callidus for USD 2.4 Billion.
“SAP would not be what it is today without Bill McDermott,” said Professor Hasso Plattner, chairman of the Supervisory Board of SAP SE. “Bill made invaluable contributions to this company and he was a main driver of SAP’s transition to the cloud, which will fuel our growth for many years to come.
SAP Executive Board Members Jennifer Morgan and Christian Klein have now been appointed as co-Chief Executive Officers, effective immediately.
SAP also released its preliminary third quarter financial results.
During the quarter, SAP reported earnings of EUR 1.30 on total revenue of EUR 6.79 Billion. SAP reported that earnings grew by 14% year-over-year, while revenue increased by 13%.
SAP year-over-year growth is primarily attributable to its cloud business growth. New cloud bookings increased by 38%, however, software license revenue fell by 1% to EUR 0.93 Billion. Cloud revenue increased by 37% year-over-year to EUR 1.79 Billion.
Overall, cloud and software revenue grew by 12% year-over-year to EUR 5.63 Billion, driven by the addition of more than 500 customers. SAP S/4HANA adoption grew by more than 12,000 customers, representing a 25% increase year-over-year.