SAP is going to announce its Q1 earnings tomorrow, interesting to see the earnings report from a leader of ERP market. According to several analytical websites, SAP is the ERP leader, with a 26 percent share of the market, according to Panorama. SAP Business ByDesign, which is targeted at upper-midmarket companies, subsidiaries of large enterprises and service organizations, is its primary cloud ERP software offering. To serve the needs of these diverse markets, SAP has put together a menu of cloud ERP services at various price points, ranging from 15 to 179 euros (U.S $17 to $202) a month. So, what you should know about their earnings. First, their outlook for 2016:Based on the continued strong momentum in SAP's cloud business the Company expects full year 2016 non-IFRS cloud subscriptions and support revenue to be in a range of EUR2.95 - EUR3.05 billion at constant currencies (2015: EUR2.30 billion). The upper end of this range represents a growth rate of 33% at constant currencies. The Company expects full year 2016 non-IFRS cloud and software revenue to increase by 6% - 8% at constant currencies (2015: EUR17.23 billion). The Company expects full-year 2016 non-IFRS operating profit to be in a range of EUR6.4 billion - EUR6.7 billion at constant currencies (2015: EUR6.35 billion). Last year the company reported the following results for Q1 2015: As we can see, revenue grew up by 21.6%, while the overall outlook for 2016 is at least 28% growth. Quite an optimistic plan, to be honest. According to this plan SAP should have around $5.8B-$6B in revenue this quarter. To be honest, I think it's too optimistic, but they updated their outlook a few weeks ago, so I suppose that they can reach this level for the first quarter. The biggest problem I see here and the greatest risk - while the revenue is supposed to grow more than 28% this year, operating profit is planed to stay the same. That could potentially lead to narrowing the margins and hence lead to decrease the investor's benefits.