SAP's continued growth in the cloud market has resulted in a raised outlook for the financial year, despite higher costs reducing operating profit.

On Thursday, the cloud services provider released its financial results for Q2 2017 (statement ) (.PDF).

Core revenue is up 10.4 percent, coming in at 5.78 billion euros ($6.65 billion), or an IFRS earnings per share decrease of 18 percent to €0.56 and Non-IFRS earnings per share increase of 14 percent to €0.94.

In the second quarter, SAP reported a decline in IFRS operating profit by 27 percent to €926 million. Non-IFRS operating profit grew 4 percent to €1.57 billion, or 3 percent at constant currencies.

SAP says that Q2 2017 operating profit and earnings per share were "primarily impacted by a strong increase in restructuring related expenses and share-based compensation expenses."

Cloud bookings increased by 33 percent to reach €340 million, while new IFRS and non-IFRS cloud subscriptions and support revenue grew 29 percent year-over-year -- 27 percent at constant currencies -- to €932 million.

Analysts polled by Reuters expected cloud subscriptions to increase by 33 percent.

IFRS and non-IFRS software revenue were €1.09 billion, up 5 percent year-over-year or 4 percent at constant currencies). IFRS and non-IFRS cloud and software revenue were reported at €4.76 billion, an increase of 9 percent or 8 percent at constant currencies.

Operating cash flow for the first six months of the 2017 financial year was €3.51 billion, an increase of 20 percent year-over-year. Net debt at the end of the second quarter was €1.79 billion, an improvement of €2.5 billion year-over-year.

In the coming financial year, SAP expects full year 2017 non-IFRS cloud subscriptions and support revenue to be in a range of €3.8 billion to €4.0 billion at constant currencies, in comparison to €2.99 billion in 2016 -- in the upper register, a growth rate of 34 percent.

In addition, 2017 non-IFRS cloud & software revenue is expected to increase by 6.5 percent to 8.5 percent due to increased adoption of S/4HANA and the SAP Digital Business Platform.

SAP predicts that during the full 2017 financial year, non-IFRS total revenue will hit the range of €23.3 billion to €23.7 billion in comparison to €22.07 billion in 2016, and non-IFRS operating profit to be in a range of €6.8 billion to €7 billion, an increase from €6.63 billion in 2016.

"This strong quarter is the latest in SAP's 8-year run of consistent, profitable growth," SAP CEO Bill McDermott said. "Our winning strategy is again validated by fast adoption of S/4HANA and our full portfolio of cloud solutions. We expect continuing momentum in the second half and confidently raise our guidance for the full year. SAP has never been better positioned."

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SAP also intends to initiate a shareholder buyback program worth up to €500 million in the second half of the 2017 financial year.