SAP (NYSE: SAP) ended the year 2015 with a bang, surpassing all market expectations and causing its stock to touch 52-week high levels. But if the market was expecting a similar performance for the first quarter of the year, it was disappointed. The company reported rather lackluster results, following the footsteps of most of the other tech giants. Its recent investments in the Cloud and Mobile space are expected to improve its performance.

SAP’s Financials

SAP’s reported first quarter revenues of €4.73 billion (~$5.21 billion) and an EPS of €0.64 (~$0.70). The market was looking for revenues of €4.82 billion (~$5.31 billion) and an EPS of €0.69 (~$0.76). The company blamed the shortfall in revenues to a delay in the Americas on the closure of deals. It claimed that deals that should have been signed during the quarter got pushed out to April of the year, thus leading to lower revenue in the first quarter and improving visibility of revenues in the current quarter.

By segment, Cloud and Software business grew 5% to €3,850 million (~$4,246.2 million). The growth was driven by a 35% increase in Cloud Subscriptions & Support revenues, which accounted for €677 million (~$746.7 million) in revenues. Software licenses and support revenues were flat at €3,172 million (~$3,498.4 million). SAP’s services revenue grew 4% over the year to €877 million (~$967.2 million). SAP HANA continued to attract new customers. During the quarter, SAP added 500 new customers which included names like Benetton, Norton Rose Fulbright, Beiqi Foton Motor, and Huaxin Cement.

For the current year, SAP expects non-IFRS cloud subscriptions and support revenues in the range of €2.95 billion-€3.05 billion (~$3.25 billion-$3.35 billion) on a constant currency basis. Overall it expects to end the year with non-IFRS operating profits of €6.4 billion-€6.7 billion (~$7.04 billion-$7.38 billion) on a constant currency basis.

SAP’s Improving Offerings

SAP continues to launch several new offerings to attract the cloud and mobile market, which is expected by MarketsandMarcket to grow from $9.4 billion in 2014 to $46.9 billion by 2019. Earlier this month, it introduced SAP RealSpend, a new mobile app that provides visibility and access to up-to-the-minute budget and spending information. The app is based on the SAP HANA Cloud Platform, and it leverages cloud to pull data from core financial reporting systems. It allows managers to perform spend analysis and other calculations on a real-time basis. It allows organizations to drill down to details so as to provide a detailed analysis on actual and future spends with regards to forecast and budget plans.

It also entered into the digital advertising market with the launch of SAP Exchange Media (SAP XM) platform, which is an integrated online media network to directly connect advertisers and publishers in the cloud. XM is based on the SAP HANA platform as well and will help advertisers to acquire full transparency and control with end-to-end advertising return on investment analytics and real-time campaign management capabilities. It is expected to help deliver higher conversion rates through hyper-targeted advertising capabilities while improving efficiency of operation by simplifying the advertising process.

Within the growing Internet of Things (IoT) segment, SAP released new offerings based on SAP HANA to connect devices to the enterprise to deliver improved insights. The IoT foundation bundle for SAP HANA will provide capabilities for IoT data management through services such as smart data streaming that will allow for data filtering, aggregation, and correlation at scale. Other capabilities include remote data synchronization to guarantee data consistency, dynamic tiering to manage multitier database storage as per the value of the data, and the IoT SIM management to allow cellular IoT device connectivity management with a user interface. According to an IDC research the global IoT market is estimated to grow to $1.7 trillion in 2020 from $655.8 million in 2014. SAP is clearly targeting this high growth market.

Within mobile, SAP also entered into an agreement with Apple to build corporate apps that will work on Apple’s mobile devices. It will also build a new software development kit that will allow corporate developers to build their own iOS apps for their organizations. The new software development kit will be powered by SAP’s HANA database technology. The agreement will help Apple achieve its goal of improving its presence in the enterprise space while also allowing SAP to widen its customer base.

SAP’s stock is trading at $76.96 with a market capitalization of $92.2 billion. It touched a 52-week high of $81.24 in March this year and has recovered from the 52-week low of $62.57 it had fallen to back in September last year. Analysts estimate a price target of $87.50 for SAP’s stock.