Strong cloud sales during the third quarter (Q3) led SAP, Germany-based European multinational software corporation, to lift its annual earnings forecast for the third time this year, the software corporation announced on Thursday.

Gross quarterly revenue at SAP rose by 8 percent on both an IFRS and non-IFRS accounting basis to a total of 6 billion euros (6.89 billion U.S. dollars). The development reflected an increase in cloud and software sales to just over 5 billion euros by 7 percent and 8 percent on an IFRS and non-IFRS basis respectively.

SAP noted that growth of its cloud-computing division outperformed SAP's traditional software license business stronger than expected by a rate of 40 percent in Q3.

In Q1, proceeds from rented online software had already grown by 31 percent to break the mark of 1 billion euros for the first time in corporate history.

The continuation of this upward trend in Q2 and Q3 has now prompted the Dax-listed company to predict higher earnings from cloud-subscription fees and support services of between 5.15 billion euros and 5.25 billion euros on a non-IFRS currency-adjusted basis after forecasting sales of between 5.05 and 5.2 billion euros earlier.

The new outlook for the division would be equivalent to an annual growth rate of between 36.5 and 39 percent.

Overall, SAP expects combined cloud- and software license earnings to come in at between 21.15 billion euros (plus 8.0 percent) and 21.35 billion euros (plus 9 percent) in 2018.

"SAP is the fastest growing company among the big cloud suppliers in the corporate software market," Bill McDermott, SAP chief executive officer (CEO) commented on the earnings figures. McDermott highlighted that the growth was driven by recent software release and that the company consequently had a "strong pipeline" for Q4. "We are lifting our outlook for the entire year full of confidence," he added.

SAP has invested heavily in new forms of business software which can be rented online through the cloud as opposed to its traditional licensed proprietary software products in the past years. The German company has recently been able to outperform U.S. rivals such as Oracle and Salesforce in the buoyant cloud market and believes that it can succeed in sustaining the current growth trajectory within the coming years.

Founded in 1972, SAP is Europe's most valuable technology company as measured by market capitalization and employs a total of 91,000 staff globally. The company achieved gross annual revenue of 23.4 billion euros in 2017.