HIGHLIGHTS – Third Quarter 2007
Revenues
Software and software related service revenues for the 2007 third quarter were €1.74 billion (2006: €1.54 billion1), which is an increase of 13% (16% at constant currencies2) compared to the third quarter of 2006.
Software revenues for the third quarter of 2007 were €715 million (2006: €642 million1), representing an increase of 11% (15% at constant currencies2) compared to the third quarter of 2006.
Total revenues were €2.42 billion for the 2007 third quarter (2006: €2.21 billion1), which represented an increase of 9% (13% at constant currencies2) compared to the same period of 2006.

Income
Operating income for the third quarter of 2007 was €601 million (2006: €549 million), which was an increase of 9% compared to the third quarter of 2006.
The operating margin for the 2007 third quarter was 24.8%, which was flat compared to the same period last year. The 2007 third quarter operating margin was impacted by investments of approximately €35 million to build a business around the new SAP Business ByDesign solution to address new untapped segments in the midmarket.
Net income for the 2007 third quarter was €408 million (2006: €370 million), representing an increase of 10% compared to the third quarter of 2006.
Earnings per share for the third quarter of 2007 was €0.34 (2006: €0.30), which was an increase of 13% compared to the same period last year.

Core Enterprise Applications Vendor Share3
SAP continued to gain share in the third quarter of 2007, marking the seventh consecutive quarter of share gains. Based on software and software related service revenues on a rolling four quarter basis, SAP’s worldwide share of Core Enterprise Applications vendors2, which account for approximately $35.9 billion in software and software related service revenues as defined by the Company based on industry analyst research, increased to 27.0% for the four quarter period ended September 30, 2007 compared to 26.0% for the four quarter period ended June 30, 2007, and 23.5% for the four quarter period ended September 30, 2006, representing a year-over-year share gain of 3.5 percentage points.
“We are pleased to announce another strong quarter in which we continued to report double-digit growth in software and software related service revenues in each region and additional share gains among core enterprise application vendors,” said Henning Kagermann, CEO of SAP.

Mr. Kagermann continued, “The third quarter also showed excellent results on the product side. For our established business we demonstrated further progress on the business process platform with a continued increase in the number of customers adopting both SAP ERP and SAP NetWeaver. For our new business, we held the branding launch of our new breakthrough innovation solution SAP Business ByDesign, which has gone live with 20 customers. We look forward to the remainder of the year, as we continue to invest in our business for future growth.”

HIGHLIGHTS – Nine Months 2007
Revenues
Software and software related service revenues for the first nine months of 2007 were €4.97 billion (2006: €4.41 billion1), which is an increase of 13% (16% at constant currencies2) compared to the first nine months of 2006.
Software revenues for the 2007 nine month period were €1.99 billion (2006: €1.76 billion1), representing an increase of 13% (17% at constant currencies2) compared to the 2006 nine month period.
Total revenues were €7.01 billion for the first nine months of 2007 (2006: €6.45 billion1), which represented an increase of 9% (12% at constant currencies2) compared to the same period of 2006.

Income
Operating income for the 2007 nine month period was €1.61 billion (2006: €1.48 billion), which was an increase of 9% compared to the 2006 nine month period.
The operating margin for the first nine months of 2007 was 23.0%, which was flat compared to the same period last year. The 2007 nine month operating margin was impacted by investments of approximately €85 million to build a business around the new SAP Business ByDesign solution to address new untapped segments in the midmarket.
Net income for the 2007 nine month period was €1.17 billion (2006: €1.07 billion), representing an increase of 9% compared to the same period of 2006. Net income for the 2007 nine month period was positively impacted by a second quarter effective tax rate of 25.8%. As in the second quarter of 2006, the effective tax rate was partly influenced by non-recurring tax effects.
Earnings per share for the 2007 nine month period was €0.96 (2006: €0.87), which was an increase of 10% compared to the same period last year. Earnings per share for the 2007 nine month period was positively impacted by a second quarter effective tax rate of 25.8%. As in the second quarter of 2006, the effective tax rate was partly influenced by non-recurring tax effects.

Cash Flow
Operating cash flow for the first nine months of 2007 was €1.34 billion (2006: €1.29 billion million). Free cash flow2 for the 2007 nine month period was €1.05 billion (2006: €1.05 billion), which was 15% of total revenues (2006: 16%). At September 30, 2007, the Company had €2.6 billion in cash and cash equivalents and short term investments (December 31, 2006: €3.3 billion).

Share Buy-Back
In the third quarter of 2007, the Company bought back 6.2 million shares at an average price of €40.30 (total amount: €250 million). This compares to 600,000 shares (total amount: €22 million) bought back in the third quarter of 2006. Of the total shares purchased in the third quarter of 2007, approximately 3.0 million shares were used to serve exercises under SAP’s share based compensation programs. The number of shares bought back in the third quarter of 2007 represented 0.50% of the total shares outstanding. On September 7, 2007, the SAP Executive Board announced that it decided to decrease the treasury stock by cancelling 23,000,000 shares, representing approximately 1.81% of the capital stock before this corporate action. As of September 30, 2007, the Company held treasury stock in the amount of 42.2 million shares (approximately 3.4% of total shares outstanding) at an average price of €36.04. In the first nine months of 2007, the company invested €756 million buying back approximately 20.4 million shares at an average price of €37.05. Given the Company's strong free cash flow generation, SAP plans to spend a similar amount for share buy-backs in the fourth quarter of 2007 as it did in the third quarter of 2007 under its current share buy-back authorization. All prior year share related numbers above have been adjusted to account for the capital share increase that took effect in December 2006 that effectively increased the number of shares outstanding four-fold.

BUSINESS OUTLOOK
The Company reiterated its outlook and refined it for software and software related service revenues for the full-year 2007.
The Company reaffirmed its expectations for full-year 2007 software and software related service revenues to increase in a range of 12% to 14% at constant currencies2 compared to 2006 growth of 12% at constant currencies2, but refined its expectations by indicating that it now expects to reach the upper end of the range.
In order to address additional growth opportunities in new, untapped segments in the midmarket, the Company will invest an additional €300 million to €400 million over eight quarters to build up a new business, of which approximately €85 million was already invested over the first three quarters of 2007. Depending on the exact timing of these accelerated investments, this is equivalent to the Company reinvesting approximately one to two percentage points of margin in 2007 into additional future growth opportunities. Therefore, the Company expects the full-year 2007 operating margin to be in the range of 26.0% to 27.0% compared to the 2006 operating margin of 27.3%. This remains unchanged from the previous outlook.
The Company is projecting an effective tax rate of 32.5% to 33.0% for 2007. This remains unchanged from the previous outlook.