Ladies and gentlemen, thank you for standing by. My name is Jasmine, your Chorus Call operator. Welcome, and thank you for joining SAP First Quarter Results 2017 Earnings Call. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question-and-answer session. [Operator Instructions]. I would now like to turn the conference over to Mr. Stefan Gruber. Please go ahead.

Thank you. Good morning or good afternoon. This is Stefan Gruber, Head of Investor Relations. Thank you all for joining us to discuss our results for the first quarter 2017. I'm joined by our CEO, Bill McDermott; and our CFO, Luka Mucic, who will both make opening remarks on the call today. Also joining us for Q&A are board members Rob Enslin, who runs Global Customer Operations; and Bernd Leukert, who leads Products & Innovation. Before we get started, as usual, I want to say a few words about forward-looking statements and our use of non-IFRS financial measures. Any statements made during this call that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as anticipate, believe, estimate, expect, forecast, intend, may, plan, project, predict, should, outlook and will, and similar expressions as they relate to SAP are intended to identify such forward-looking statements. SAP undertakes no obligation to publicly update or revise any forward-looking statements and all forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect SAP's future financial results are discussed more fully in our recent filings with the U.S. Securities and Exchange Commission, the SEC, including SAP's Annual Report on Form 20-F for 2016 filed with the SEC on February 28, 2017. Participants of this call are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. On our investor relations website, you can find our quarterly statement and financial summary slides deck, which are intended to supplement our prepared remarks today and include a reconciliation from our non-IFRS numbers to IFRS numbers. Unless otherwise noted, all financial numbers referred to on this conference call are non-IFRS and growth rates are non-IFRS as reported. The non-IFRS financial measures we provide should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with IFRS. And finally, we would like to invite you to our customer conference Sapphire now in Orlando, Florida, which runs from May 16 to May 18. Sapphire is a great opportunity to learn more about SAP's strategy and our product portfolio. We will offer special program for investors and financial analysts. Please see the SAP website and contact the SAP Investor Relations team for further information. And with that, I would like to turn things over to our CEO, Bill McDermott.

Thank you very much, Stefan, and hi everyone. Thanks for joining us today. Like our results, the mood here at SAP could not be better. SAP's outstanding first quarter results are a decisive follow-on to our record-setting 2016. They once again validate SAP as a profitable fast-growth company. The facts show that we are executing our winning strategy at scale. Our customers are endorsing the unique breadth and depth of SAP core cloud networks and all come with soaring adoption for our new innovation on a global basis. We believe SAP is the only company in the business software industry to deliver soaring cloud growth and double-digit license growth. Driven by S/4HANA, our core innovations are growing really fast with software licenses up 13%. We now have more than 5,800 S/4HANA customers with global companies like Energy SE, choosing S/4 in the first quarter. Big brands like Citrix Systems selected S/4 cloud edition, the leading intelligent cloud ERP solution in the market by far. Algier [ph] Enterprise Services implemented S/4HANA Cloud in just 10 weeks. In the private cloud, the HANA Enterprise Cloud also continues to be a fast-growth business for SAP. Led by SAP Digital Boardroom, our reinvigorated analytics portfolio grew in strong double-digits across cloud and software in Q1. SAP's track record of strong M&A is also validated with our amazing cloud growth. We have one rule, only by the best companies in the business. Now these best-in-class assets have been fully integrated for many, many years, and all of our growth in the cloud is totally organic. That's something very new to our industry. Our new cloud bookings surged to 49% growth in Q1. Our cloud revenue grew by 34%. SAP Hybris, our customer engagement solution, saw a triple-digit new cloud bookings growth in the first quarter.…

Yes, thank you very much, Bill. Hello everybody from my side as well, and indeed I am as happy as you are Bill to announce a really great start to the year, where we continued a rapid expansion of our top line with accelerating cloud growth and an excellent software performance. This performance clearly demonstrates the entire breadth and resilience of our unique portfolio, the combination of cloud and on-premise. This outstanding start to the year is also fully in line with what communicated at our Capital Markets Day in February earlier this year and further validates our investment decision to drive future growth and operating profit. Now Bill has already shared with you a few of the impressive growth metrics this quarter. I would just like to add to this that we had our best year-over-year growth ever in new cloud and software license order entry, which was up by more than 30%. This KPI represents the order entry from our software license business plus the total contract value from our cloud business. This exceptional growth in order entry is a strong achievement, especially when you look at the absolute size and scale of our business. It really underpins how successful we are in the market with our unique portfolio. At the same time, we continue to strive for a more predictable business model. While we had a strong performance in software revenue in Q1, our predictable revenue base remained stable at almost 70% year-over-year. Compared to five years ago, our predictable revenue share is now 18 percentage points higher. Now let me go into some more detail on the top line performance. Cloud grew 34% or 30% in constant currency. So either way you look at it, we have now had growth in cloud of at least 30%…

Thank you. I hand it back to the operator. We can now start the Q&A session please.

Ladies and gentlemen, at this time we will begin the question-and-answer session. [Operator Instructions]. One moment for the first question please. The first question comes from the line of Stacy Pollard of JPMorgan. Please go ahead.

Hi. Thank you. I have a couple of questions around margins really. In the press release, you say that you were confident that you'll give your profitability that you'll grow your profitability in 2018 and beyond. Are you also confident that your profit margin can increase? And more specifically, if I look in the quarter, can you say why sales and marketing cost as a percentage of revenues was up in the quarter? Do we expect the same pattern through the year? And then can you talk about the cloud margins? I think a little bit disappointing in Q1. Can you talk about which of the investment areas finished in 2017? I know you mentioned converged cloud but what about distribution, data center delivery, those areas? Do they also finish in 2017, and can we expect that to move out in 2018?

Yes, absolutely. [Technical Difficulty] first of all, on the profitability increase in 2018 and beyond, yes, I've made it very clear that we believe that 2017 will see on that trough in company margins. We have [indiscernible] through relatively high level of investments into those areas of getting them off third-party database platforms and on to HANA conversion to cloud infrastructure, data center consolidations. These problems will and largely around at the end of 2017. We are seeing already the improvement in the services margin and we believe that this will continue, and then with the increased scale of our cloud business, we absolutely believe that in 2018 company margins will [indiscernible]. In terms of the sales and marketing expense, remember two things when you compare ratios year-over-year. First one, we have made high investments into additional distribution capacity, especially in the second part of 2016. When you take a look at our total run rate of employees that we have year-over-year, on a comp level, we have a 7,500 additional employees on board and we have invested ahead of time of course also in sales capacities. Our hiring in Q1 was not so much focused on sales anymore but rather in areas like cloud delivery, as well less R&D. But of course these increased investments on the sales capacity side is now meeting the smallest quarter in the year. Also in early 2016, we still booked some advantage of the rundown of the transformation program in 2015, which was there in 2017 obviously. So that's a part of the reasons. First of course beyond that also 2017 the first quarter was much more successful than the first quarter of 2016 and hence our approvals for bonuses in the field of course have been higher than in 2016 as well.…

Thank you very much. Let's take the next question please.

Next question comes from the line of John King of Merrill Lynch. Please go ahead.

Yes. Hi everyone, and thanks for taking the questions. I've got three, if that's all right. So first of all on the restructuring plan, Luka, on the services organization, can you just give us an idea of the return on investment of that in terms of the impact that it might have on the services gross margin in the outer years obviously thinking about where the margins could go to actually double down there? The second one is obviously there is a cash outflow there, so does that have any impact at all on your thoughts around the buyback? I think you've been thinking about buyback into Q3. Is that change at all by this plan? And the third one, I think actually I apologize, probably also for Luka as well. On the maintenance side I think it was a little bit weaker. It looked about 3% growth in the support revenue, slightly slower than we had seen in the last two or three quarters. So any one-offs there or is that just a little bit of the cloud - effect of the cloud somewhat taking away some of the support contracts? Thanks.

Yes, let me answer the latter two questions first because that's very quickly on the restructuring related cash outflows and the impact on the share buyback. No, that has not any impact. We continued to largely see the same expectations on our total liquidity and cash flow basis that we had before. On the maintenance side, no, you might have seen in the past also that maintenance occasionally is slow when we start the year. This year we had a very healthy inflow of cloud expansion build, so you see that also in the very strong performance on the new cloud bookings side. However we have a number of a maintenance-related impacts as well as releases of sales allowances lined up for the second quarter and beyond, so that seasonality should definitely turn into our favor as we progress during the year. On the restructuring and the services business, let's be clear I think this is all meant to actually accompany the [indiscernible] in our services business that we are clearly seeing now. We have done heavy lifting over the course of the last two, three years to right-size the services business. Now utilization is very strong and you have seen as well on the revenue side that we are back out with quite solid growth, solid 6% constant currency growth or 9% at nominal rate. We believe we have an opportunity to really double down on our services business and create new and distinctive capabilities to accompany our customers through the digital transformation journey that they are on, and these digital consulting capabilities are something that we really want to build out across the organization. This should also be a very high-value services with a very high stickiness for our customers that should indeed improve on the overall margin profile of our services business further. When this will be the case, is a little bit of timing question and we, as you know, are generally anyway projecting an increased services profitability for the coming years. We are now, for the third quarter in a row, above the 20% mark. We should definitely also now after these restructuring efforts not fall down below this efforts below this margin level any longer. To what extent we can achieve increases there, is something that we will see. But generally speaking, I think the path that we are taking now is setting us up for continued solid growth in our services business, and so we believe this will not be a declining business for SAP any longer. That's the most important thing, as services is truly instrumental in helping our customers try to path towards embracing entirely our innovation portfolio.

Thank you.

Thank you. Let's take the next question please.

Next question comes from the line of Ross MacMillan of RBC. Please go ahead.

Thanks a lot. I had a question for Bill. Bill, you said the organic cloud innovation is now the biggest part of your cloud growth story. I guess that means both innovation in some of the acquired businesses but also the new S/4HANA public cloud edition, and I wondered if you could focus maybe on that for a minute. Any metrics you could share on S/4HANA public cloud, I guess, specifically around customer account, customer wins et cetera? Thanks.

Yes, of course, Ross. Thank you very much for the question. First of all, it kind of takes a moment to remind ourselves that it was several years ago when we acquired SuccessFactors and Ariba and Concur and Fieldglass. These companies have been in our organic run rate now for sometime and one of the messages I wanted to convey today is if you take SAP's core license business growing this quarter in double-digits and the cloud growing at 34%, with bookings growing in 4% to 9%. When you add the core of the cloud together, you have an amazing growth story in SAP and all of its organic. We haven't bought anything in a long time. If you compare that to any other large-scale company in our space, if you add this steeply declining core to the acquired cloud revenue, you still have declining business and that is the market share point that hopefully you all have ascertained from these numbers where SAP is really on a tale. And every one of our cloud entities, the line of business, the business network are growing faster than the original business case assumptions we made when we acquired the companies. The other thing I think you want to know is our HANA Enterprise Cloud and our SAP cloud is not only growing steeply, it's actually growing faster than all of our other cloud businesses. And as Luka said, it's now in double-digit margins and improving ever steadily and that used to be the heavy lift, right, because that was the part of business not too long ago. So now you have all these cloud businesses in the company firing on all cylinders. As it relates to the S/4 cloud story, I'll let Bernd make some comments on that because we have both Bernd and Rob with us today. But I do want to underscore we are running that as an end-to-end business. We're going...

Hello?

Ladies and gentlemen, we apologize for the pause in the presentation. Please remain online. You'll be hearing music until the presentation Q&A session resumes. So Ross MacMillan was in the Q&A line.

Exactly.

Your line is open Ross MacMillan.

I think the question from Ross was already addressed. We would like to take the next question.

Yes, next question.

The next question comes from the line of Michael Briest of UBS. Please go ahead.

Thanks. Good afternoon. Luka, coming back to the cloud margins, I appreciate the legacy architect take you're still having to pay for. If I look at 2016, your costs were about €460 million in this SaaS business and revenues were €1.2 billion. To get to your 2020 targets, you've got about €2 billion-plus of revenues and about €300 million of costs. So I'm just wondering how much of that cost that's in there today is going to disappear and whether you think this year margins in the SaaS/PaaS business will be flat or indeed if the overall cloud business will generate flat gross margins or even perhaps improve them? And then just, Bill, on the S/4 uptake, could you give some data points? I think Ross asked around but maybe the number of public cloud customers that you now have on S/4, and whether also the 400 overall S/4 additions in the quarter was as you expected, would you think that maybe it will accelerate as we go through the year in 2017, you will see more adds than the 2016? Thank you.

Yes, Michael, maybe let me first address the question around the cloud gross margins. For this year, we expect roughly stable overall cloud gross margin. You have seen in Q1 that we are slightly better in the Q1 cloud gross margins compared to the full-year 2016. But I think assuming a stable cloud gross margin is a fair assumption here. In terms of the March 2020 targets, yes, we absolutely believe that the SaaS/PaaS business, will the biggest net accelerator on cloud gross margins as we exit 2017. They have a huge catch-up to do. But if you think about the fact that at the moment we are essentially operating duplicate infrastructures across the main ones of our SaaS/Paas assets, especially SuccessFactors, that of course is a massive cost burden that will basically go entirely away once all of the customers are migrated by the end of this year. Hence we are still confident that we will achieve the gross margin progression marching towards around about 80% that we have in mind for SaaS/Pass by 2020. Admittedly it's a big jump but all of the investments that we are putting in right now are setting us up for exponential efficiency increases later on. Then maybe over to you Bill - to Rob on the…

The second part of the question, Luka, what was it? It didn't come through here?

Yes, Michael can you repeat?

Yes, on S/4, do you think - you did 400 or so in the quarter with 500 in Q1 last year. I know it's a small quarter but were you disappointed by that? Do you think you'll do more this year than last year, and just an update on public cloud within that?

Michael, great question. I think we'll continue to accelerate the S/4, the HANA business. It stool looks pretty strong. The pipelines look strong. What we are seeing that value stories are now coming out consistently across all the customer base. And it is truly the digital story for SAP and our customers and I think you'll continue to see that. Were we happy or disappointed with 400? I think the bigger topic is we have 5,800. We have a snowballing effect now that on the go-live customers and we have more and more projects ongoing that are more complete than just finance and logistics, so it's really a very, very good story for all of SAP.

And the one thing that you have to keep in mind on S/4HANA and the answer is definitely you'll have a more this year than last year by a lot is when you are the CEO of a company, just think about that as your digital core and then you have all the tax rates of the line of business, the business network, machine learning, AI, the internet of things, I was recently meeting with the CEO of an energy company who chose us to rip and replace the competition and it's a net new customer to SAP. It was the strength of S/4 as the core platform but it was also the attach rates of all the other entities within the company that aligned their board and called SAP as the ultimate winner, and that would be a more difficult decision to make than status quo, so the innovation is there Michael. We are going to win every place. It's going to be an unbelievable year.

Yes, and maybe just finally take a look at the average share of revenues that we drive from orders bigger than €5 million. S/4HANA was certainly the major contributor to this.

Okay. Thank you very much.

Thank you. Let's take the next question please.

Next question comes from the line of Philipp Winslow of Wells Fargo Securities. Please go ahead.

Hi. Thanks guys and congrats on just a really great, great quarter. A question for you, Bill. You've talked a lot in the past about the innovation that you all have done on the edge, reinvigorating the core. And I know you and Luka always say don't read into too much into Q1. But if I read into the stringer quarters that you all have reported here it does seem that you have an updated point to say that the core is reinvigorated and improving. When you think about - I guess two questions here. First in terms of just the go forward just demand here, how are you - what are you seeing between the core and the edge and how are you thinking about that? And then in terms of just the go-to market strategy within reinvigorated core and continued strong growth on edge, how are you balancing that from just the sales go-to market perspective?

Well, thank you very much, Phil, and I'll of course let Rob and other colleagues on the board make any comments they want to. But I want to first of all say this idea of the edge to the core and the core to the edge really started when SAP made the bold move into the cloud some seven years ago and we recognized at that time we became more relevant in our core ERP conversation because we had made a move into the line of business cloud and the business network. Now since we reinvented our core ERP system on S/4HANA, we are the only company in the world that can tell a C-level decision maker, you can run new transactional systems and your analytics all on one database, one common S/4HANA platform for all of your ERP activities. And why this is so powerful is every single CEO you talk to wants to align this all stuff, meaning the management team and the people motives of a company along with the hard stuff, which is the transactions and the financials of the company. Only SAP unifies this in one real-time in-memory suit and there is the S/4HANA self. Now what's interesting on the go-to market side that I have seen is we underplayed industry at SAP. We are in 25 industries and the more you can customize and tailor this conversation to the unique subtleties of industry, the more you walk away with market share. The second thing is we are seeing an extreme rise in new business sales. I gave one example a few moments ago but you have to remember 50% of our names in Q1 were net new, and at the same time, you're seeing now the cloud entities at the line of business, the core ERP, as well as the network grow really fast, especially when you look at the bookings metric of 49%. So here is my hypothesis on the industry. Why is SAP the de facto standard business software company in the world? I'll tell you why. Because even if we don't win every sale and somebody at a point solution level takes something, they still have to live with us and the other 80% of the enterprise. And frankly when you are thinking like CEOs think, they want things to be simple. So if you are at least good enough in all the other areas and you own the core, you'll own the edge, you'll own the network, you'll own IoT, and I think that's represented in our numbers. And I kindly ask you all to take the back of the envelope approach, add up the revenues that others are getting from M&A, add up their core declines, one plus one equals negative two, and when you add out SAP's numbers, one plus one equals three plus.

Thank you. Let's take the next question please.

Next question comes from the line of Adam Wood of Morgan Stanley. Please go ahead.

Hi, thanks for taking the question and congratulations from me for a strong start to the year as well. Maybe just coming back to the cloud business, you've obviously seen the acceleration in the bookings there. Could you maybe give us a little bit more color on what's driving that? Is it new customers versus the install base? Is it the S/4 public cloud or rather a traditional customers maybe buying subscriptions on S/4 rather than coming in with licenses? And then secondly, just thinking about the net new build that you alluded to just there. I think we will think about that maybe by value being less than is by volume because its potentially small customers. Could you maybe help us understand how big that opportunity could be if you are starting to win some larger net new names there and is that a significant opportunity for SAP over the next few years? Thank you.

Yes, I'll just give you big picture, Adam. So first of all, I'd like to say that SAP has been a very, very successful company without putting all the wood behind the arrow in SME. And one of the detractors to really growing and taking over the SME market had been the limitations of and on-premise business model. It's just not fast enough to scale as fast as a company like ours would like to. Well, that now has been taken off the table. You have B1 on HANA. You have ByDesign growing very fast. But now we have S/4 Cloud edition that without a doubt, market down with giant crayon will be the leader and not only small, medium sized but even upper mid-market for cloud computing in the ERP world. So that business is on a tale and I think that's a big bogey of growth that is upside as we think about our future. Bernd, I'll let you make some comments on that and Rob - but also we ran through the Fortune 1000 and 2000 a little while ago with 350,000-plus customers but when you think about the SME market, there is literally millions of them out there that could be in the SAP portfolio and we are going after it with everything we have. So I think you're now seeing us completely unified on S/4 cloud edition being something that could take over the market.

Maybe Adam, [inaudible]. Just to add additional flavor to your question. If I'm looking back on the business of ERP over the last decade, it was very hard and tough for us to win net new names. Now with S/4 and specifically with S/4HANA Cloud, if we take the overall triple-digit growth and then look at the customer list, it's in the range of between 35% and 45% of net new names and this gives us tremendous opportunity not just to convert and install base from an on-premise into the cloud, as well to conquer complete new markets. And this is the path we are going forward, and looking at the numbers we are confident that this path is really resonating very well. Rob, any additional comments from your side?

Yes, I think people forget that the S/4HANA ERP, there is nothing out like it in the market at all. When you look what it does and how it changes businesses and how it connects digital supply chains, it is by far the next generation ERP and everyone else is far way behind. And then when you connect everything, the machine learning and IoT and analytics space, we are the only company on the distribution side and on the product side that have a true supply chain end-to-end for the digital world and I think that's the major difference. There is nobody out there that can actually talk about what it looks like in a digital world to connect an ERP system and actually look at next generation of applications, and I think you will see us changing it more and more AI and artificial intelligence becomes relevant for S/4HANA. So I think the opportunity is huge. I think the S/4 cloud opportunity is going to be incredible. Some of the companies that signed up like more pretty significant company in the chemical business and just committed to SAP and I think you'll see us do really well in this space.

And keep in mind just in closing on this topic, Adam, if you take Latin America - take a market like Latin America - this was an on-premise market up to about 18 months ago. Today we get more revenue out of the cloud in Latin America than anything on-premise, so this is an interesting dynamic. There is another region that's now crossing over to more cloud revenue than the on-premise world and we've been in business for a little while. And in 2018, the cloud eclipses the on-premise revenues of SAP. So the more we fulfill the initial vision to be the cloud company powered by HANA, the more we can mass scale our enterprise in small, medium, large of 25 industries in 193 countries. That's the game plan.

Thank you very much.

Thank you. Let's take the next question please.

Next question comes from the line of Gerardus Vos of Barclays. Please go ahead.

Hi, thanks for taking my questions. Just have two on S/4 probably for Bill. Just first regarding the adoption and what you see in the pipeline in that last year and a half, there was a lot of smaller deals on a deficient level. Do you start to see in the pipe now large enterprise-wide adoption for S/4? Then secondly, how many go live did you have in the quarter? And then finally, a question for Luka on the gross margin. The drop in the core business in software and support in the quarter was a bit of an unusual given the good improvement we've seen over the last four quarters. Was this an aberration and should we expect that gross margin takes up pretty out of three quarters, or is there a structural reason why it's coming down now? Thank you.

So when it comes to the go live for S/4HANA, we have now over 700 go lives. That's up significantly more than - as I said earlier on, more than 2,700 projects ongoing. Almost all of those projects are 1610 versions, so significant logistics. And when we look at the large enterprise, I would pretty much say that there is almost every single one of our large customers that have a plan or obviously implementing it for at some point. We've seen it with my advisory board. To the group, every single one of them has a project or some of them are already live with significant parts of their business. Luka?

Yes, on the gross margin, I think the key here on the software and support margin side again is mix shift effects because we had, as was discussed before, slightly slower start on the maintenance side. And so the mix of software versus support was little bit more unfavorable as it was last year and that basically drove the slight deterioration there. In total, what we said at the Capital Markets Day absolutely still holds that we believe that there will be a continuous slight upward trend just because the relative weight of support will increase, as well as the exposure to third-party licenses, commissions and royalties will decrease over time as we further scale our S/4HANA business. So that's our expectation more from a full-year basis and also looking into next year.

Thank you.

Thank you. Let's take next question please.

The next question comes from the line of Alex Tout of Deutsche Bank. Please go ahead.

Yes, hi guys. Thanks for taking the question. I think a lot of the sub-specific ones have been asked but maybe if you could comment on the macro environment a little bit. How do you see IT budgets? Are they healthy at this point? I think we've seen some numbers from some of the IT services ecosystems that have been indicated a bit of a slow start to the year. Is there anything to be concerned about as far as you're concerned, pockets of strength and weakness that you may be seeing across sectors, how energy looked for example at the moment, and anything to be concerned about with the European elections some of the politics out there as we go through the year?

Well, thank you very much for the question. First of all, I would like to say I'm very pleased that I had an outstanding meeting in 2014 with Emmanuel Macron when I went to visit François Hollande. It's nice to see excellent people like him compete for the biggest offices in the world because he viewed technology in his role on the economy then as a major driver to innovation and a force multiplier for the economy. And I think more and more in the public sector, we are seeing really smart people know that they have to utilize technology and innovation as a lever to deliver results. And this is more and more becoming the case around the world, whether it's Brazil, it's the EU countries, the United States and Asia, and that's very exciting. As it relates to energy specifically was one of our top energy industries in Q1 and it's one that I personally have been participating and is an executive sponsor with some of the most critical energy companies in the world, all of them are looking to change and do big things with SAP. I can tell you that the macro environment looks very good. The pipelines around the world looks very good and I think what's unique about this moment in time is we see good numbers in the brick and all the major geographies around the world has strong pipelines and they are all performing, for us at least, in double-digits, steep double-digits in the cloud, and in some cases, depending on the business even triple digits as the case with S/4 cloud edition. So we are very bullish right now. We think some of the world's biggest problems can only be solved by innovative technologies and we are really proud to be a leader. And I think we are also getting more humbled by the minute because even as we taste success, we resist the temptation to get intoxicated by it. We instead are redoubling our efforts and focusing on that customer and inspiring our people like never before to get the job done because our customers' customers need our customers.

Thank you very much. I think we have time for one final question now.

Next question comes from the line of Walter Pritchard of Citi. Please go ahead.

Thank you. I guess question on the sales and marketing spend for Luka. As we see the year unfold at this level of growth in terms of cloud and license, do you expect to see your target achieved for the year, or do you expect that you would spend more as it relates to the target because it seems like you're tracking a bit above on the top line. Just trying to understand if you see incremental leverage on this higher top line or if an incremental top line would require more spending on specifically sales and marketing?

No, as you have seen, we have confirmed all of our outlook metrics for the full-year. Let's remember the Q1 is our seasonally smallest quarter. That holds both for the top line as well as consequently for the impact of our sales and marketing investments on and against that top line. As we further progress through the year, we believe that with the investment levels that we have planned for, we are well equipped to fund all of our core business operations. We don't see a need to further increase the investment levels and we believe that ultimately we are very comfortably positioned to meet our full-year targets, not only with regard to the top line but also with regard to bottom line.

Very good. Thank you very much. This was the last question we had on our call today. Thank you very much for joining. This concludes the SAP Q1 2017 earnings call and we hope to see you in Orlando at Sapphire. Please check the SAP website for further information. Thank you very much for joining and goodbye.

Ladies and gentlemen, this concludes the SAP's first quarter 2016 earnings results conference call. Thank you for participating. You might now disconnect.