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SAP SE O.N. (SAP 0.59%)
Q3Â 2019 Earnings Call
Oct 21, 2019, 8:00 a.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Good day, ladies and gentlemen, and welcome to the SAP Quarter Three 2019 Earnings Conference Call. [Operator Instructions]
At this time, I would like to turn the conference over to Mr. Stefan Gruber, Head of Investor Relations. Please go ahead, sir.
Stefan Gruber -- Head of Investor Relations
Thank you. Good morning or good afternoon. This is Stefan Gruber, Head of Investor Relations. Thank you for joining us to discuss our results for the third quarter 2019.
I'm joined by our new Co-CEOs Jennifer Morgan and Christian Klein; as well as Luka Mucic, our CFO, who will make opening remarks on the call today. Also joining us for Q&A is Executive Board member Adaire Fox-Martin, President of our Global Customer Operations; and Ryan Smith, CEO of Qualtrics.
Before we get started, I would like 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 fact are forward-looking statements as defined in the US Private Securities Litigation Reform Act of 1995. Words such as anticipate, believe, estimate, expect, forecast, intent, 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. 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 US Securities and Exchange Commission, including SAP's annual report on Form 20F for 2018, filed with the SEC on February 28, 2019. Participants of this call are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their date.
On our investor relations website, you can find our quarterly statement and a financial summary slide deck, both documents 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 and percentage point changes are non-IFRS, as reported year-over-year. 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, just a reminder, today's call is focused on our Q3 earnings results. In three weeks on November 12th, we will hold our special Capital Markets Day in New York City, but will provide more color on our growth strategy and mid-term revenue and margin ambitions.
And with that, I'd like to turn things over to our Co-CEO, Jennifer Morgan.
Jennifer Morgan -- Co-Chief Executive Officer
Thank you, Stefan. Good morning and thanks to everyone for joining today's call. First, I'd like to thank Hasso Plattner on the Supervisory Board for their trust and honor of leading this Company forward together with Christian Klein, CEO. It's an honor to help write SAP's next chapter and follow Bill.
Before I begin, I want to start with the news we learned about on Friday regarding the passing of Mark Hurd. Mark has had a profound impact on our industry, and on behalf of all of SAP, I want to extend our deepest empathy to the entire Oracle community and most, especially to Mark's family and friends. You are on our thoughts and prayers during this difficult time.
Now, let me dive into our Q3 performance. Today we reported strong Q3 and year-to-date results, which Luka will detail shortly. Clearly our experienced management vision powered by Qualtrics is resonating with customers in a key differentiator across all aspects of the Intelligent Enterprise.
With top line accelerating and operational excellence initiatives in full swing, we're on track to reach our full year and mid-term ambition. Let me spend a minute on the macro. Our strong Q3 performance was achieved despite headlines about a slowing global economy, trade wars and political uncertainties.
We had some impact due to macro challenges for example in Asia and the German auto and manufacturing sector. But even in times of uncertainty, technology investments remains a focus for every company and our business is resilient due to the breadth of our global coverage.
Companies continue to turn to SAP to transform, to accelerate their growth organically, and through faster M&A, to drive efficiencies, competitiveness, and successfully navigate a changing macro and regulatory environment.
Our global pipeline is robust as we head into our seasonally strong Q4. SAP's resilience is further underpinned by more predictable revenue approaching 70% of the mix. Let me now highlight our strategic growth drivers in the cloud. We made a bold move with the acquisition of Qualtrics and customers are excited about the holistic experience management platform Qualtrics provide, in addition to what the combination of external data can do.
We're very pleased with Qualtrics growth and we are starting to see the scale of SAP helping drive and close pipelines, especially in the enterprise segment. Qualtrics had some impressive wins in Q3. Dish Networks, Slack Technologies, Akamai, U-Haul, Sharper Image, Stanley Black & Decker, Garmin International, and many others selected Qualtrics in Q3 to move beyond systems of record to new systems of action and achieve breakthrough results.
We continue to beat our competition in both the enterprise and volume parts of our business. Qualtrics' volume engine is helping SAP to expand its footprint in the new account and is helping us open doors for other SAP Cloud solution.
We're also seeing an acceleration of our win rates against Medallia as customers are choosing Qualtrics for its technology and analytics capability and the breadth of XM Solutions across customer experience, employee experience, product experience and brand experience.
With the addition of Qualtrics to success factors, we redefine the traditional human capital category to human experience management, our HXM. Every company needs to understand the factors that impact employee experience, to attract, and retain their talent. And since integrating Qualtrics with this SuccessFactors suite, we've seen a tremendous demand and success factor customer base for Qualtrics. Since May, we've acquired over 300 customers to the Qualtrics platform. SAPs evolution toward Human Experience Management is proving to be an accelerant for Employee Central, which added more than a 150 customers in the quarter and has now more than 3,500 customers globally. Competitive wins, included British Telecom and Hugo Boss, and our joint sales missions are paying dividends.
Qualtrics had its largest employee experience here on history this quarter as a direct result of our joint go-to-market mission. Some proof points for SuccessFactors. We just had closed 1,000 SuccessFactors customers in APJ, and when you add China, that's another 400 customers.
In Latin America we're approaching 800, even in matured markets like Europe, we see significant growth to over 2,800 customers. UK and Ireland saw triple-digit new bookings growth in Q3. We're also making great progress lining, culture some fire in our partner ecosystem.
We announced a partnership with Ernst & Young with EY delivering excellent practices and solutions to its client, during people advisory services and its workforce of a future solution. EY will also become the first Qualtrics partner network member to adopt Qualtrics experience, employee experience across the organization of 26,00,000 -- 260,000 employees, and this will combine X and O data from SuccessFactors.
In addition to accelerating SuccessFactors business in XCM, our CS business continues to benefit with the infusion of Qualtrics across our C/4HANA portfolio. We introduced the connector between Qualtrics to C/4HANA, the developers and partners can use to build new integrations scenario. We're starting to see organizations combining customer feedback and operational data to listen, understand, and act. EON, an Brazilian retailer swift also chose SAP C/4HANA solutions in Q3 over our competition based on SAP'S unique and compelling vision, what Petrofac and Perfumery Douglas went live on C4.
We're continuing to invest in our customer experience portfolio. We've announced that Bob Stutz, a leader who continue to redefine the CX arena as both Microsoft and most recently, Salesforce had rejoined SAP as President of Engineering and our CX business. Bob's experience and foresight will take us to new places in the future. Our Intelligent Spend solutions provide collaborative commerce with SAP Ariba, effortless travel and expense processing with SAP Concur and flexible workforce management with SAP Fieldglass.
Together they represent the largest commerce platform in the world, with more than 3.4 trillion and global commerce annually transacted in more than 180 countries. This is nearly eight times the size of Cupak [Phonetic]. We are making strong progress on delivering integrated expense scenario starting with services procurement across Fieldglass and Ariba. BT, Sony Music product and many other trying to SAP's Intelligent Spend solutions in Q3.
Specifically, Concur starting to gain traction, especially in China, we Xiaomi as one of its marquee customer. Another incredibly exciting announcement and key strategic driver of future growth is our expanded relationship with Microsoft, which we call Embrace. We've listened to our customers to help them define and accelerate their journey to SAP S/4HANA in the public cloud. Many of our enterprise customers have chosen Azure and respond SAP and Microsoft who established a partnership to move on premise SAP ERP and S/4HANA customers to the cloud, through industry specific best practices, our joint reference architecture, and SAP cloud delivered services on Azure.
This partnership will both accelerate and simplify customer migration to S/4HANA on Azure. Microsoft will bundle SAP's cloud platform services into a bundle we call Embrace. And they'll sell these directly through their field organization to their customers, who will run SAP in the Azure cloud. By putting the customer first, we've combined innovation with Azure to create the optimized environment for SAP S/4HANA to enable the integration, orchestration, and extension of SAP systems in the Azure Cloud.
As always choice will prevail as we recognize that many of our customers also run SAP on AWS and GCP for example. In this case, our customers will still have the benefit of the best run SAP and their public cloud of choice. So to summarize, SAP is delivering on its winning strategy and its promises as validated by our strong Q3 and year-to-date results.
The fundamentals and future of SAP could not be stronger. Now I'd like to hand over to my partner and Co-CEO, Christian Klein, who will share similar vision and with highly complementary skill set and experiences, we will write the next chapter of SAP success together. Thank you, again. Christian, over to you.
Christian Klein -- Co-Chief Executive Officer
Thanks, Jen, and thanks to everyone for joining us today. Let me begin with the personnel remarks. On Friday, we were threatened by the news about the passing of Mark Hurd. Words are never adequate in moments like this. The whole IT industry lost a visionary leader, and a brilliant mind. And my thoughts are with his family, his friends and everyone at Oracle.
Being a CEO with wallmark [Phonetic], with responsibility and honor to hold. I want to express my heartfelt thanks to Hasso Plattner, and the SAP Supervisory Board for the trust, they put into Jen and myself. Starting off with a quarter like this certainly help. This is where I also want to thank Bill, not only for his amazing quarter but also for the unique journey during the past decade.
This is an outstanding quarter across all key parameter. Cloud and on-premise order entry, revenue, cloud gross margins, operating margins and cash flow. Luka will walk us through those in a minute.
Let me add some color on the core applications perspective. SAP's ERP flagship solution S/4HANA continues its success stories. It's the God of suite in the market, serving over 25 industries and 160 country versions. We are continuing to rep into artificial intelligence to further increase the business value and help our customers to grow and twice automation in the digital age.
Until the end of this year, we will have 200 use cases and more than 1,800 features. We're presenting a 60% increase in scope. For product gaining market share, and we see positive software license growth and high double-digit cloud revenue growth. 80% of the DAT companies and 65% of the Forbes Global 2000 companies already rely on SAP S/4HANA. We are now at more than 12,000 Latin customer, we were sending a 25% year-over-year growth. We also very happy with regards to adoption, especially S/4 with modern chart with technical migration.
It allows our customer a complete redesign of the business model and business purposes. We see 60% of customer apply for implementing and the other procurement they're approaching. To name just a few, this quarter Dow Jones and Callaway Golf in the US and Breitling in Switzerland went live on S/4HANA, as such Daewoong Pharma in South Korea.
In context of that, we are making rapid progress in Cloud ERP. S/4HANA cloud including supply chain management, we are now at cloud revenue run rate of more than EUR0.5 billion and close to 2,000 customers. That's a coverage of 17 industries already in the cloud, and we have investing heavily in the user experience.
This quarter we saw subsidiaries of McDonald and Xinjiang, Daming Mining in China go live on S/4HANA Cloud. I also like to provide you with an update on our platform business, including our in memory database SAP HANA with more than 31,000 customers as of today.
One important use cases S/4HANA and other LOP applications such as SuccessFactors running on top of SAP HANA, but over the last two years, HANA has rapidly expanded beyond SAP applications to third party applications. This is reflected in the share full use licenses.
We had more than 60% already and it continue to expand. We are evolving SAP Cloud platform as a business technology platform with focus on business services and integrating our LOP application. SAP Cloud platform is also key when we talk about integration including our master data integration content and Co-Kernal services like security and identity. There is no doubt, that cloud is becoming mainstream in the end of cloud software market. And so, we are happy to record increasing cloud cost margins across all business model. We are looking hard on further increasing the efficiency of our internal cloud delivery. You can see that in the margin trend and I will provide additional color at the Capital Markets Day. At the same time we understand some industries with high quality and complexity light manufacturing, and automotive where ERP customization is needed, we keep major part of their core on premise for the foreseeable future.
The same is true for companies and countries with high, with political instability, limited infrastructure or increased data security concerns. Hence a lot of landscapes will remain high quick for many years. SAP allows companies to combine cloud and on-premise in a landscape tailored to their taking into considerations, their business requirement and strategic vendor relationship.
It's all about customer choice. This is also reflected in our multi-cloud strategy allowing both our customer and us to leverage the hyperscalers highly elastic and globally available infrastructure to deliver SAP Cloud solutions. Jen discussed earlier, the Microsoft partnership and how excited we are about that. Bill rest assure that customer choice in this context remains unchanged.
Before I hand it over to Luka, I'd like to point out three focus areas that I believe will be critical for our success in the next chapter of SAP. One, customer success. SAP has always been best when we listen to our customers. Customers have been vocal about their feedback which we greatly appreciate and proactively seek. We are listening and taking action, integration, solution adoption and use and upselling, is a key directly related to customer success, through innovation.
SAP is not Software distributor, SAP is a software engineering powerhouse. Our continued quotes where innovation is based on our ability to leverage R&D resources effectively and efficiently. We are refueling processes and removing overlaps, focusing resources and accelerating innovation cycle, so we get the most out of our, on the investment, which are critical to our future success. Also we will further strengthen core innovation with our customer to realize true business value with the help of new technology.
Three, our enroute. It is our colleagues that drive innovation, provide value to our customers, and consistently promote our quote and profitability. We are proud that SAP has been recognized on numerous employee awards worldwide.
We are the only company to rank on all five class of best places to work with it. Our employee engagement index is near record high, but we don't stop here. In addition to further simplifying our internal processes, we are currently conducting our annual employee survey. This year, with our own SAP Qualtrics technology, which gives us detailed insight into the good, the best and active. And the employees are productive and innovative and therefore critical to our success.
With that, I would like to hand it over to Luka. Luka, are you happy with the number?
Luka Mucic -- Chief Financial Officer
Yeah. Thanks, Christian. As you know, usually it's hard to get me satisfied, but this time I'm indeed absolutely happy with the results, this quarter. And I would also like to take the opportunity to congratulate both you and Jen on being named Co-CEOs.
Look in April we promised a stronger focus on profits and we are clearly delivering. I'm very pleased to say that our operational excellence measures allowed us to achieve double digit operating profit growth and a substantial operating margin expansion. And just as important we achieved this result with continued strong top line momentum.
Let me now provide you with some background on the key drivers of the third quarter. Both cloud and software revenue as well as total revenue grew 13% this quarter, cloud revenue was again a big driver of this growing 37%. New cloud bookings were up 39% and up 51% excluding our infrastructure-as-a-service business.
This is a good trend for SAP, a net positive for the margin profile of our cloud business. As mentioned by Jen, we also signed a large partner contract with Microsoft. This contributed 18 percentage points to new cloud bookings growth this quarter. In addition, as Christian said, we saw a significant growth in our S/4HANA cloud offering. Software license and support revenue grew at a solid 4% in the quarter. Software licenses revenue declined by 1% and with this, our software license revenue was actually slightly better than expected despite macro uncertainties.
This was primarily driven by continued growth in our S/4HANA flagship solution and our digital supply chain offering. In Q3, the share of more predictable revenue increased to 69%, up 2 percentage points year-over-year. Now quickly to the regions where we had a very solid performance in the EMEA region with cloud and software revenue increasing 10%, cloud revenue increased 48% with Germany and the UK being highlights. France and UK had exceptional quarters in software license revenue.
We had a strong performance in the Americas region. Cloud and software revenue increased 16%, cloud revenue increased 32% with Canada, Brazil and Mexico being highlights. In addition, the United States and Brazil both had strong quarters in software license revenue. In the APJ region we had a solid quarter amid a challenging market environment. Cloud and software revenue was up 9%. Cloud revenue increased 40% with Japan and Australia being highlights. Japan had an exceptional quarter in software license revenue as well.
Let's now look at profitability and gross margin for the third quarter. Our cloud gross margin rose sharply year-over-year and increased by 5 percentage points to 69%. As Christian already mentioned, we continue to make progress on efficiency gains in our cloud delivery.
This marks the third straight quarter in a row that we have increased our cloud gross margin sequentially. And our most profit of the cloud segment, the Intelligent Spend Group, gross margin remains steady year-over-year at 78%. The gross margin of our other SaaS/PaaS business expanded massively by 10 percentage points year-over-year and reached 70%, which is an acceleration compared to last quarter.
Similarly as in Q2 we benefited from primarily four effects. First, SuccessFactors is now running solely on our converged cloud platform based on the HANA database, extended lifetime of hardware, continued high gross margin from Qualtrics, and also benefits from restructuring. For our infrastructure as a service offering the cloud gross margin improved by 9 percentage points year-over-year to 25%. We see infrastructure as a service becoming a smaller share of the cloud mix going forward as hyperscalers continue to expand their capabilities to operate SAP workloads in their datacenters.
Our cloud and software gross margin increased by 1 percentage point to 82% year-over-year with a very positive contribution from the cloud margin. Our services gross margin was up 5 percentage points to 27%. The increase of the services margin mainly results from a strong revenue performance paired with the successful execution of operational excellence measures and restructuring benefits.
Overall operating profit was up 20% year-over-year driven by a combination of strong top line and further acceleration of our operational excellence and restructuring benefits. This led to a stellar operating margin, which expanded 170 basis points. Year-to-date we expanded our operating margin by 70 basis points. Turning quickly to IFRS operating profit, this was up 36% benefiting from lower share-based compensation expenses, for the first nine months still IFRS operating profit was down 28%.
Let me just give you a brief recap and update on the effects that led to this result. Compared to the first nine months of 2018, we had close to EUR100 million higher acquisition-related charges and revenue adjustments mainly from the acquisition of Qualtrics close to EUR500 million higher share-based compensation expenses and approximately EUR1.1 billion higher restructuring expenses.
As mentioned last quarter these effects are obviously much higher than usual this year. We still expect IFRS operating profit to be up significantly next year. Since we don't expect any meaningful restructuring expenses and acquisition-related charges to likewise decline. Therefore, our IFRS operating profit growth rate in 2020 will be much higher than on a non-IFRS basis.
Moving on to EPS and taxes, where for IFRS EPS, we saw a strong increase of 28% year-over-year, while non-IFRS EPS was up 14%. In the third quarter, our IFRS and non-IFRS effective tax rate each increased close to 2 percentage points year-over-year. However, our tax rate guidance for 2019 remains unchanged. In Q3, our operating cash flow was up 28%. Free cash flow rose sharply and was up 116% due to strong operating cash flow and the reduction of our capex spend by 50%.
For the first nine months, our operating cash flow was EUR3.3 billion, down 5% year-over-year. Compared to the prior year, operating cash flow was impacted by the following effects. First, the benefit of roughly EUR290 million from the application of IFRS 16 but then higher restructuring payouts of around EUR240 million, higher share-based compensation payouts of close to EUR210 million and higher tax payouts of EUR490 million. For the full year 2019, we therefore still expect operating cash flow to be slightly lower than in 2018.
Similar to IFRS operating profit, we expect a steep increase in operating cash flow in 2020, as restructuring and tax payouts will decrease sharply. Free cash flow stabilized for the first nine months and was flat at EUR2.3 billion. This reflects our disciplined capex spend, which was EUR703 million, EUR443 million lower than the previous year. For the full year 2019, we now expect our capex to stay below the EUR1 billion mark.
Before I conclude, I would like to give you an update on our non-financial performance and sustainability highlights. We are proud to be recognized as the number 1 software company in the Dow Jones Sustainability Index for the 13th year in a row. Developments in the world are leading to increased demand for SAP to enable customers to implement sustainable business models connecting economic, social and environmental objectives. We want to help ensure that smart integration of Impact measurement and valuation will ultimately become standard practice. To this end, SAP is a founding member of the Value Balancing Alliance, a non-profit organization that helps businesses measure the overall societal [Phonetic] impact and dependencies.
We aim to lead by example, continuing to steer sustainability holistically in our own operations. Employee retention was down slightly to 93.3% in Q3 year-over-year. We have made great progress in women, in management, which is now at 26.3%, up from 25.9% year-over-year and obviously with Jen, SAP has named the first female Co-CEO of a Dutch [Phonetic] company. In Q3 our carbon emissions were 65 kilotons which is slightly higher than we anticipated. Despite this, we expect that our emissions in 2019 will stay stable at a minimum. We remain committed to our goal of becoming carbon-neutral by 2025.
So to summarize, we delivered an exceptional quarter across revenue, profit and cash flow. We achieved double-digit growth in cloud revenue, double-digit growth in cloud and software revenue, double-digit growth in total revenue, double-digit growth in operating profit, substantial operating margin expansion, double-digit growth in earnings per share and triple-digit growth in free cash flow. We reiterate our 2019 outlook with great confidence and we are on track to reach our mid-term ambitions.
With that, thank you very much and we will now be happy to take your questions.
Operator
Thank you, sir.
Luka Mucic -- Chief Financial Officer
Thank you. Operator, we can now start the Q&A session.
Questions and Answers:
Operator
Thank you so much. [Operator Instructions] Our first question comes from John King from Bank of America. Please go ahead, your line is open.
John King -- Bank of America Merrill Lynch -- Analyst
Yeah. Hi and good afternoon, everybody. A couple of questions for me. Firstly, just on the mechanics of the Microsoft deal, I think you're implying, it's about a EUR74 million, EUR75 million run rate of revenue. Can you just explain just how quickly we will see that kind of revenue run rate in the numbers, please, perhaps for Luka I guess. And then just coming back to the cloud bookings. The second question, I guess you could look at this in a number of ways, but depending on the mechanics of that Microsoft deal, I guess, the implied cloud, organic cloud bookings growth, we still, I would say, maybe a little bit below what you're expecting in terms of cloud revenue growth over the next few years. And I guess the question is, would you agree with that and if so, what are the steps are you looking to take in order to try and improve the run rates on the cloud booking side. Thank you.
Luka Mucic -- Chief Financial Officer
Yeah, perhaps I would take both of those and then please, Jen, Christian add your color if you want. So on the Microsoft side. It's very simple, a revenue recognition will begin in Q4 and then basically we will have roughly the figures that you are citing, on an annualized basis over the course of the next three years basically. On the new cloud bookings side. Look, I mean first of all, I think, nobody should argue with a 39% new cloud bookings growth and 51% without infrastructure as a service being a good result, of course, it was influenced by the Microsoft transaction. But this is representative with the strategic choices that we are making. We are doubling down on the partnerships with our hyperscalers. We drive healthy and highly profitable cloud platform and S/4HANA business as a result of those partnerships and we focus our HANA enterprise cloud infrastructure as a service business on high value opportunities.
This is exactly the direction that we want our business to take. When it comes to the growth rates in new cloud bookings that we need in order to hit our mid-term objectives, I think I've been talking about this already on a number of calls previously. It's important to note that, first of all the new cloud bookings are not the only source of our revenues and of our growth. Of course, the renewal performance plays a role, the rent in TCV contracts plays a role and we have quite a few of them that actually have a higher number of users or other capacity metrics that are kicking in later years of a multi-year contract. And on the other hand obviously, the pay as you go revenues that we had primarily in our Intelligent Spend Group are also not captured in new cloud bookings.
When you take a look at our performance across the different cloud segment, you will actually find that we run basically only healthy businesses that are growing exactly the way they should in the Intelligent Spend Group, we have been very consistent around the 20% constant currency growth mark now for a number of quarters and with the stability of our transactional revenues. So, we expect that this will continuing and in the high growth customer and Experience Management segment, we have been growing close to 100%. In ATS actually many of the cloud assets that are now reaching scale like S/4HANA analytics cloud, have actually had a very, very strong performance. And as they become a bigger piece of the pie, they will of course also influence the revenue performance in a much bigger way, cloud ERP is an almost untapped opportunity tool for us.
Christian has mentioned the run rate that we have achieved by now, the opportunity in the market is huge. So, you shouldn't be concerned at all about our momentum in the cloud, please.
Jennifer Morgan -- Co-Chief Executive Officer
Yeah. I'll just punctuate a couple of different areas of focus for cloud growth. The Microsoft deal is important, because it goes beyond our traditional partnership. They've but pretty big skin in the game and their sales teams across the world are now selling SAP solutions. That's going to help us do two things. Accelerate the movement of S/4HANA to the cloud and accelerate the sales of SAP's cloud platform services in cloud revenue. So the stickiness of that partnership, we believe will continue to pay broader dividend. Let's say, two other client, Qualtrics is another area where we see huge potential from a platform perspective as well as just giving us an opportunity to have new conversation especially in places like Asia. This is where we can hit the ground running and really drive growth faster.
And then finally, we've heard you, we know that you want to see more organic innovation in the cloud from SAP. It will be something we talk a little bit more on, at our Capital Markets Day. But as Luka mentioned, whether it'd be analytics or the customer facing solutions or supply chain, this is an engine that we need to get humming even more.
John King -- Bank of America Merrill Lynch -- Analyst
Okay.
Luka Mucic -- Chief Financial Officer
Thank you. Let's take the next question please.
Operator
Certainly. Our next question comes from Walter Pritchard from Citi. Please go ahead.
Walter Pritchard -- Citi -- Analyst
Hi, thanks. I'm wondering, between some of the things you talked about on the call with S/4 public ERP ramping up with, it looked like the percentage of your S/4 customers that were new actually came down implying that the installed base might be moving faster as well as what you talked about with Microsoft in the Azure relationship. Do you expect that you start to see a little bit more of a pickup here in the installed base migration around S/4, and I'm just curious I know investors feel little nervous around cloud versus on-prem, but how do you expect that will influence those two revenue streams if there is any change that you're highlighting here. Thanks.
Christian Klein -- Co-Chief Executive Officer
Yeah. Thank you, Walter for the question. So I'll start, and then handing over to Adaire. So in the -- in Q3, so we have seen actually really strong quarter for S/4, I mean, as I mentioned, we have seen positive growth in the software on-premise S/4. And we also have been high double-digit growth for S/4HANA cloud revenue. And actually we see both, I mean we see many industries like automotive or in the public industry, we see a lot of movement also on our customers migrating to S/4 on-premise. We see also, now that we are increasing the business value of S/4. We're serving new business models, putting more and more AI into the product. Driving more automation, drive were higher intelligence in the processes. We see now that also the move is really picking up. And then on the cloud side, especially in the finance area, we have seen maintained [Phonetic] a win now in Q3.
And as I said, being now close to 2,000 customers, this is now a major business for SAP. Even more important that in the cloud, we see that the adoption is even kicking in faster. So we see go lives within 20 days, which is really strong and this also shows that not only in the cloud, we are growing fast, but all the customers adopting really fast.
Adaire Fox-Martin -- President of Global Customer Operations
Yeah. Maybe I will chat a little bit about that Walter. Talking to our colleagues in development, who are increasing exponentially the functionality that is in S/4, it means that as our customers look at the value case for the move, there is a very strong value proposition now around the S/4 environment. We are putting a whole range of different components around facilitating an easy and cost-effective move for our customer base. We can see very significant focus from the S/4 community on the S/4 install base. We have a strong value assurance program and the implementation partners are doubling down on this.
In the general business space, we now have 27 conversion factors from various different partners supporting our customers in that segment. With our colleagues in DBS, our model company approach, it means that we are simplifying with pre-configured solutions and content, the implementation of S/4 in a customer's environment. So we're working to automate as much as we can of that process to ensure that we can further take a cost effective and high value transformation for our customers.
Stefan Gruber -- Head of Investor Relations
Good. Thank you.
Walter Pritchard -- Citi -- Analyst
Thank you.
Stefan Gruber -- Head of Investor Relations
Let's take the next question, please.
Operator
Certainly. [Operator Instructions] We will now take our question from Michael Briest from UBS. Please go ahead. Your line is open.
Michael Briest -- UBS -- Analyst
Great, thank you. Good afternoon and congratulations, Jen and Christian on your promotion. Just following up on the topic of the private cloud, I mean you're obviously repeating the ambition for 2023 cloud revenues of EUR15 billion, but looking at this Microsoft relationship in part, that could be cannibalistic to the growth in HEC. Do you see any change in the mix in 2023? Are you expecting the SaaS/PaaS business perhaps to be bigger than previously as a result of this and then related to that Luka, on the capex side, I think you said you're expecting less than a EUR1 billion this year, six months ago, it was going to be EUR1.5 billion, I'm wondering how much of that relates to this change in hyperscaler relationships, and how much, maybe to your, you have some quite large capital project building offices in Munich and such like, is that contributing to the reduction in capex?
Jennifer Morgan -- Co-Chief Executive Officer
So maybe I can take the first part of the question, we don't see this cannibalizing our revenue, because we see that customers want choice, right? And so many of our customers absolutely want SAP to manage S/4 in the cloud, whether it'd be the public cloud or whether it be a HANA enterprise cloud. So we see many of our customers are making broader public cloud, enterprise decisions. And for us, we wanted to make sure that we didn't limit our conversation to customers, only specific to one cloud offering. And so what we found is that the customer has so many voices around their table right now, whether it be movement with public cloud, or S4 or other innovation, we just found that by coming together and giving them prescriptive options depending on what's important to them? What their industry is? Etc. Then we can make sure regardless, we're getting a piece of the pie and it can you influence our decision. So we'll continue to see both of those revenues streams grow, but now we're going to be far more conversations and impacting the direction. Luka?
Luka Mucic -- Chief Financial Officer
Yeah. Perhaps, just the last sentence on this one, I think we have been talking for a while now, about the fact that we expect indeed infrastructure as a service due to our focus on high value engagements will not further increase as a percentage of cloud revenues. Actually, we believe that there is now an acceleration in SaaS part, but there is very positive for the overall margin. And of course also for the gross margins in the cloud. When it comes to capex, it's correct. I mean, we have made great progress this year, in our capex efficiencies.
Main contributing factors are, first of all, the progress that we have been making with the hyperscalers and our partnerships in this respect. They are really powering a lot of the infrastructure support that we need for our applications and that is of course helping us a lot, but it's also due to the fact that Gary Slater and Christian's organization and the cloud infrastructure team has done a terrific job to rationalize the demand for our own data center hardware and consolidating the procurement centrally.
They have also successfully renegotiated the maintenance contracts for our hardware and our data centers in a way that makes it now highly economic to extend the lifetime of the hardware from four years to five years, and that has of course also in the capex intensity and we believe that this will continue to be the case. Yes, of course, we also have general capex needs through facilities and other capex areas, but they are largely planned for and they have not been subject to -- major changes. So it's really mainly the infrastructure of efficiency in IT and in our data centers and we believe that this will continue, so also for the next couple of years, we expect no significant increases from the level that we have reached right now.
Christian Klein -- Co-Chief Executive Officer
And maybe Mike, it's tough to give you one concrete example also however, HANA end up our cloud offering place to together with our hyperscaler by the G. I mean, one of our main competitors talked about some SAP ERP replacement and I had a -- actually have no evidence. I didn't find any SAP customer moving over to the competition. But what we are just currently doing, there is one large ERP customer from the competition, they are now saying we want to move to S/4HANA, they have not the skill, to get to one HANA and one S/4HANA, so they said put S/4HANA on ASA [Phonetic] and we go to the HANA enterprise cloud. So you help us to first replace the database, second that ERP and then SAP helps with the migration. And this is done with the HANA enterprise cloud offering plus, and SA infrastructure.
So you also can see that both offerings are about to play really well together and helps us also to win market share going forward.
Stefan Gruber -- Head of Investor Relations
Okay, thank you. Let's take the next question please.
Operator
Certainly. Our next question is from Kirk Materne from Evercore ISI. Please go ahead. Your line is open.
Stewart Kirk Materne -- Evercore ISI -- Analyst
Yes, thanks very much. And I'll add my congrats to Jennifer, Christian on your new appointments. I guess the question is probably for Jennifer just on Qualtrics. At Sapphire, you all mentioned that the business had been accelerating sort of versus the pre-IPO growth rates and I was just kind of curious where are you in terms of being able to leverage the global distribution capabilities of SAP with Qualtrics?
And then I guess secondly what kind of halo effect is maybe Qualtrics having on some of the other SaaS properties. I think you mentioned sort of the change in terminology around success factors. So I was just wondering if you give us some sort of a broader update there on sort of the ability to leverage the Qualtrics brand across all of SAP. Thanks.
Jennifer Morgan -- Co-Chief Executive Officer
Sure. Thank you. Thanks for the question, Kirk. I'll start, and Ryan Smith is actually on the call and I'll hand it him to give you a little bit more color. So look at it from a couple of angles. One is that when you look at SuccessFactors or HR, right, and you look at the traditional category of HR, it was very much an event driven kind of after the fact solution track -- track different events that happens in employee, in an employee's lifecycle. When you look at what's happening in the workforce, today the war for talent and employee experience. Qualtrics has really allowed us to really redefine how we're having these conversations. Right.
So it's not just about understanding why things are happening? Why do I have attrition? It's understanding how to go further upstream and understanding who is going to address, what are my issues going to be. And so being able to have those kind of conversations and take actions much further upstream in the business of key. So that has given us a huge kick in SuccessFactors, because it really changes the nature of the conversation and it makes it, a feel free discussion. Because now we're talking to people about how experience actually shows up in the income statement. How we can actually lower your SG&A or it's going to allow you to be more productive and getting employees retail on the floor and more productive in selling more is one example. So SuccessFactors is one, the other one clearly is around customer experience.
When you look at our commerce solution, we see a really strong correlation between bringing together commerce and Qualtrics. The Qualtrics is also allowing us to start conversations in places maybe we wouldn't traditionally go. So it's allowing us to be, whether your end customer service or other parts of the enterprise is getting us broader conversations and broader audiences, which has been fantastic.
From a geographic perspective, you look at a region-like APJ, the companies and the brands that are in APJ are foundationally based on this concept of experience. You look at the airlines in Asia and compare them to any other airlines in the world, these companies already understand experience. Now they very quickly can understand how technology can help them scale that new and different ways.
Ryan and I were in Korea, and Japan launching this over the summer, and we had incredible growth in our APJ regions around Qualtrics. So we're able to hit the ground much quicker. Our employees are super excited about this solution, because we're able to have these conversations and we're really starting to have this enterprise conversation. Ryan, I'll hand it you to add any additional color.
Ryan Smith -- Chief Executive Officer
Yeah, I think you said it great Jen, I think the only thing I would be, if you look back a year ago, we were on the road at this time, kind of starting our IPO roadshow getting ready to go public, kind of, you would have told me that, here we are almost a year later, we've seen a massive increase in our growth rate from what was already out there. We're also seeing anytime we go in with SAP or deal size increase 30% plus.
We've already seen massive adoption on the EX product with combination of SuccessFactors. We've always been known as the company with the best technology in this space by far. I think the question was always out there is HEC we go from seven-figure deals to high seven figure deals to eight figure deals and with the combination of SAP with the partnership network, we just launched a massive partnership with Ernst & Young, launched our Qualtrics development platform or last week, we had 300 partners in Utah. We're starting to answer all of those questions. So like I said, if you would have told me last year at this time. This is where we would be after the announcement with SAP with the accelerated growth rate on an already fast growing company. I would have said, hey, that looks like success to us. So with this combination. We've done everything we said we were going to do plus some, so I couldn't be happier.
Stefan Gruber -- Head of Investor Relations
Okay, thank you. Let's take the next question please.
Operator
Certainly. The next question is from Adam Wood from Morgan Stanley. Please go ahead.
Adam Wood -- Morgan Stanley -- Analyst
Hi, good afternoon and thanks for taking the question. And also congratulations from my side for both to Jen and to Christian on the new roles. I've got two questions if I could. I just wanted to come back to Microsoft and the partnership that to start off with. And just to understand a little bit better technically exactly what's happening. As Microsoft bought volume of software from you, then they can resell on to their customers bundled on Azure, so that in effect they're acting as a reseller for that and there is a volume of business that you get directly upfront from Microsoft, otherwise you may -- I may not got, but would have come through over time with customers directly. And could you maybe help us understand whether there is upside or downside to those numbers.
And then also whether you would envisage doing similar deals with other hyperscalers in future, whether there's other products you could also see that type of deal happening for. So just a little bit more detail around the actual technical details of that Microsoft partnership will be really helpful.
And then secondly, probably for Luka on the margins, you had a big benefit on, particularly on the cloud gross margin side from the changes you've made around SaaS SuccessFactors and integration of the landscapes there. Could you maybe just help us around that on the restructuring? Should we expect a slightly slower pace of margin expansion over the next few quarters, because we've got that kind of one big benefit? Are there still benefits from restructuring, particularly to come through? Thank you.
Christian Klein -- Co-Chief Executive Officer
So I'll start. So, as it relates to Microsoft, really what this was about is making sure we were being very prescriptive with our customers around, what are the cloud services from SAP and what is the -- what are the different services from Microsoft, the customer should be thinking about, when they're combining our solution, right? Today, they are kind of, our users from Microsoft, customer SAP, we come together, and been very, very clear on some business platform around SAP. As it relates to the integration of SAP system, as it relates to extensions of SAP or orchestration of SAP system.
We have a set of SAP cloud platform services that do them. We bundle those together and embrace. Microsoft made a commitment to those and can resell with it with customer. There's no downside to those numbers only upside. The way that we really, one of our estimating kind of our initial start of this market was really in a few key areas of the world. And we put a very, a lot of scrutiny around the pipeline, the business where we saw the customers moving, those who told us where they plan to move. So we see this as a start. We also want to make sure we're very clear here that we provide our customers choice.
So let's say, for example, we have lots of customers who may be run on AWS. They've already chosen to run SAP on AWS. Those cloud platform services that I just mentioned around the integration market duration and extension, those customers can buy directly from SAP, right. So they can still get SAPs reference architecture on AWS or on GCP from SAP. The difference here is Microsoft puts skin in the game, they are really teaming with us, they're doubling down the innovation and engineering with us and they're going to have their salespeople selling this as well.
Luka Mucic -- Chief Financial Officer
Yeah. And perhaps, just quickly on the margins front. No, we have not yet lost our fire power, we have additional benefits to gain from the platform convergence. I think, I've been talking a lot in the past years about this being a -- an opportunity alone in the low triple digit million euro figure. Year-to-date, we have had a benefit of just about 50 million from the replatforming. That means that, at least the same amount is still to come, I believe actually, we will do slightly more than this, because the benefits are really significant. And now we have paved the way for further efficiency increases for automation and other areas.
And secondly, this is only SuccessFactors we have still to fully complete the job on the Ariba business network. The application side at Ariba is already done. The business network side will be finished as well, come Q1 next year. And with that we will see also the additional benefits in our Intelligent Spend Group business network cloud margins, which certainly will then help us to further increase the cloud margin also strongly in 2020. By the way in the SaaS/PaaS business, we are now at 70.4% margin. This is what we had predicted only for next year. So we are clearly ahead of our plans. And you can continue to expect us to do very well on the cloud margin.
Stefan Gruber -- Head of Investor Relations
Thank you.
Operator
Thank you.
Stefan Gruber -- Head of Investor Relations
Let's take next question please.
Operator
Certainly. The next question is from Phil Winslow from Wells Fargo. Please go ahead.
Phil Winslow -- Wells Fargo -- Analyst
Hi, thanks for taking my question and congrats again on a greater Q3 and congrats to you, Jennifer, and Christian, looking forward to working with you closely going forward. Just wanted to focus on the manufacturing vertical because I think everybody on this call knows that the manufacturing obviously really run --- on the Q2 call, obviously you've flagged some issues with China. And then you called out Germany, but you actually continue to put up good results overall.
What are you hearing from these manufacturing customers in terms of just they are spending intentions, because as you mentioned last call changes supply chain might need to drive more spending with you all. But there is obviously some macro issues. Just if you could just double click on that vertical, that'd be great.
Christian Klein -- Co-Chief Executive Officer
Yeah, so I'll start, and then handing over to Adaire for some specifics about China, I mean on the manufacturing side, we are doing extremely well. I mean we have both in our very competitive offering for on-prem as well as on the cloud. We want the solution on different type of scale up that we offer choice and also in China now as far will also go like now -- cloud in Q4. So, also there we will also have S/4HANA running on Chinese infrastructure starting in Q4 now actually this quarter. Adaire?
Adaire Fox-Martin -- President of Global Customer Operations
Yeah. Maybe just on the German side a little bit of color on that. We had a very strong performance from SAP in Germany in Q2 and we did enter Q3 with an exceptionally strong pipeline for Germany despite what we thought as a performance on numbers in Q2, but we definitely saw during the course of Q3 some slowdown in execution, particularly for the customers in the discrete manufacturing session at -- session segment, I would say, was really around business caution from here of a recession and we enter now Q4 with a very strong pipeline, not just from the seasonal perspective, but also because of an outlook of some backlog, some of those deals cash flow down a little bit and or using and how you see the opening weeks of this quarter to really build out those balance, those value cases and the validation of those cases and the validation of those funds with our customers in this end segment.
So, I remain quite optimistic about our business in MAE [Phonetic] particularly because, as I look forward to Q4 pipeline, it is much broader than the discrete sanction segment. As in China, we have -- I have the privilege of serving businesses in China over 27 years now. I have a very strong footprint in China with about 70% of the Fortune 2000 are being SAP customers in China.
Nevertheless, I will tell you that we are seeing a slowdown. We are seeing customers who are adopting a wait and see strategy, specifically focus, not so much on the software itself, but on the challenges of business continuity in the event of a increasing tension as it relates to some of the macro, political and economic scenarios, we have seen, and there is also a very strong focus from the Chinese governmental website will take time indigenous innovation, that is the ability of companies in China, in order to have Chinese components etc. in their supply chain.
Nevertheless, I would say to you that as a result of some of the work that we have been doing around, work without cloud and the ability to land our product on environment in China, for China, I'm confident that we will be able to address those business continuity issues that were raised and of course continuing to grow our business in China at the rate that we've been growing it over the last decade.
Luka Mucic -- Chief Financial Officer
And perhaps, just one sentence on a global level, believe it or not, our two best performing verticals were actually services and discrete manufacturing.
Stefan Gruber -- Head of Investor Relations
Thank you.
Phil Winslow -- Wells Fargo -- Analyst
Hey, guys, and best of luck in Q4. Thanks.
Jennifer Morgan -- Co-Chief Executive Officer
Thank you.
Christian Klein -- Co-Chief Executive Officer
Thank you, Phil.
Stefan Gruber -- Head of Investor Relations
Thanks a lot. We'll take the next question please.
Operator
Certainly. The next question is from Stefan Slowinski from Exane BNP. Please go ahead. Your line is open.
Stefan Slowinski -- Exane BNP -- Analyst
Yes, hi, thanks for taking my question. I was just following up on the previous question, I apologize if you've answered this already, but on the Microsoft deal, I was just wondering if you think you could be able to put similar partnerships in place with some of the other hyperscaler partners, you've mentioned, I mean obviously you've just talked about Alibaba and AliCloud in China, I mean is this something that you could potentially see Alibaba doing in terms of helping you sell direct in China? Thank you.
Jennifer Morgan -- Co-Chief Executive Officer
Yeah. So, I think that we're open to the future. Obviously, we have a very specific and relationship that we've defined in motion that we defined with Microsoft, that will be very specific and preferred by the two of us. So, in looking at other partnerships result we already have pretty strong partnership with both GPP and AWS, we're users of that technology, we will continue to be. And so there's always possibilities for the future, but today is going to start with Microsoft.
Adaire Fox-Martin -- President of Global Customer Operations
Maybe I can comment on the Ali side...
Jennifer Morgan -- Co-Chief Executive Officer
Thank you.
Adaire Fox-Martin -- President of Global Customer Operations
Providing to the market restructuring [Phonetic], you are doing well across. In China, as I am sure everybody is aware, there's a unique set of licensing laws around, software as a service and platform as a service as well as a unique set of cyber security laws. And so therefore Ali, we have physically landed platform onto the Ali infrastructure in China. And we will physically land S/4 to the Ali infrastructure in China. And that means, then we have the opportunity with the AliCloud team to take us two solutions directly to the market, a very large scale market of small medium enterprises in China.
Jennifer Morgan -- Co-Chief Executive Officer
Thanks, Adaire.
Stefan Gruber -- Head of Investor Relations
Thank you. Let's take the next question please.
Stefan Slowinski -- Exane BNP -- Analyst
Great. Thank you very much. Thank you.
Operator
The next question is from Charles Brennan from Credit Suisse. Please go ahead. The line is open.
Charles Brennan -- Credit Suisse -- Analyst
Thanks very much. Thanks for taking my question. Can I just ask one about the competitive landscape in your prepared remarks, you made reference to both Medallia and Cooper. But can you talk about your win rates against some of the larger, more conventional competitors in and worked in sales force. And I guess the driving force behind the question is the recent comments from Workday that now penetrated in and 40% of the Fortune 500s. That sounds like, they're making some reasonable progress. Thank you.
Jennifer Morgan -- Co-Chief Executive Officer
Thank you. I can add on to the comments that I made before. I think one of the things that I wanted to stress in my remarks is just, the seismic scale from an Ariba perspective of the network that we do have, right and the work that we've done and we've had several wins over our competition in the enterprise space last quarter. So we feel very good about our win rates and what's happening there. As it relates to SuccessFactors. We have our large SuccessFactors, customer events in Q3. And again the conversations that we're having and moving beyond just talking about HR, the traditional HR processes. So, we've actually seen some really great wins using Qualtrics within North America.
But I think more importantly, the advantage that we have is just the ability to scale broadly outside the United States and we're not a German company. We're not an American company, we're global company and we've got feet on the street everywhere. So when you look over in Asia. When you look over in Latin America and you look at some of the customers that we're adding, we have a head start.
Now when you're bringing Qualtrics and you start to differentiate solutions like SuccessFactors that allow us to accelerate even further. So we feel really good about where we are right now with the win. The thing I like about Qualtrics, if you think about Qualtrics, right? Qualtrics is not about survey. It's not just about surveys and sentiment.
When you think about SAP did with ERP back decades ago, we saw silo systems supply chain manufacturing financial running the operations of a company. We saw an opportunity to bring those interdependent functions together have better insight to the business and being more efficient. That was back when the data within the four walls of the company and that became fully operational data platform.
Qualtrics takes a very similar analogy to that. Most data about your consumers leaving your point is not just inside the company but outside the company. Businesses are gathering sentiment and engaging with customers, employees across multiple functions of the company, outside the company, etc.
Lots of companies do surveys, lots of functions within companies take employee sentiment or customer sentiment. The differentiated with Qualtrics is they figure out how all that's interdependent and has created a platform. So, this platform approach and technology that Ryan talked about earlier, this is what differentiates SAP. This is what our Salesforce has talked about, and this is where we're really starting to see the uptick and getting those big deals that Ryan mentioned earlier. It's an enterprise discussion, it -- on the agenda as every CEO today. So those are just a couple of things of stands.
Stefan Gruber -- Head of Investor Relations
Thanks a lot and we have time for one final question, please.
Operator
Certainly. And this question is from Mohammed Moawalla from Goldman Sachs. Please go ahead.
Mohammed Moawalla -- Goldman Sachs -- Analyst
Great, thank you very much. And Jennifer and Christian, my congratulations as well on your new roles. I had a couple. Firstly, Luka, you obviously have some pretty strong gross margin tailwinds continuing into next year, but also some of the big opex benefits kicking in. You've also talked about sort of reinvestments back in the business, can you talk about sort of the flexibility you have around delivering the margin and perhaps the shape of the margin expansion over the next couple of years, in the event that the top line potentially faces risks with a macro or anything else.
Luka Mucic -- Chief Financial Officer
Yeah, sure. Thank you. So, first of all, obviously the benefits from the restructuring program this year has not been significant, because it takes a while for the program to take effect, so the bigger impact will come next year. What you see this year in terms of progress on the gross margin side is really around the replatforming and increased operational efficiency through consolidation of data center operations and infrastructure operations. And therefore, I'm very, very confident that we can continue to scale this business with increasing gross margin contributions also next year and even beyond next year.
We have always said that in 2019 against our target of -- and on average 1 percentage point of margin increase, the market should not expect a full percentage point, already this year because we have the dilutive impact from our acquisitions that we have to digest. And given that this is a 40 basis points dilutive headwind. I think you can see how the underlying is already performing against the average 1% that we have in mind, that in turn means that we will plan to do slightly more than that 1% next year to catch up, because next year, we have the full run rate benefit from the restructuring, but it's clear, the restructuring is not a cost cutting exercise.
And I want to be very, very clear about that. We have done the restructuring in order to tailor our investments in our capacity to those areas where we have the biggest growth opportunities and we are putting actually our actions, two over our plans work, where we are seeing tremendous investment in Qualtrics, we're seeing a tremendous investment in our different cloud constituents.
We are adding additional capacities only in the productive areas in research and development, in sales and in services and that will continue to be the case to propel our growth. In terms of optionality, our business model has become way more resilient. We have now close to 70% of our revenues and highly predictable revenue sources contrast that to only one-third, when we hit the financial crisis in 2008 and that gives you a good perspective on how resilient our business model has become. And therefore, if we have to optimize our level of investments against only 30% variability in the top line, that would be a much easier than in the past. So you should take a lot of confidence out of this that we can and we'll hit our mid-term ambitions as we have announced then.
Stefan Gruber -- Head of Investor Relations
Thank you. And Moa [Phonetic], did you have a follow-up or? That's not the case. Well, this concludes our Q3 earnings call for today. Thank you so much for joining and we look forward to speaking to you again at our CMD on November 12th in New York City. Thank you very much, and goodbye.
Operator
[Operator Closing Remarks]
Duration: 66 minutes
Call participants:
Stefan Gruber -- Head of Investor Relations
Jennifer Morgan -- Co-Chief Executive Officer
Christian Klein -- Co-Chief Executive Officer
Luka Mucic -- Chief Financial Officer
Adaire Fox-Martin -- President of Global Customer Operations
Ryan Smith -- Chief Executive Officer
John King -- Bank of America Merrill Lynch -- Analyst
Walter Pritchard -- Citi -- Analyst
Michael Briest -- UBS -- Analyst
Stewart Kirk Materne -- Evercore ISI -- Analyst
Adam Wood -- Morgan Stanley -- Analyst
Phil Winslow -- Wells Fargo -- Analyst
Stefan Slowinski -- Exane BNP -- Analyst
Charles Brennan -- Credit Suisse -- Analyst
Mohammed Moawalla -- Goldman Sachs -- Analyst
