FRANKFURT—SAP SE Friday raised its guidance for 2016, even after it reported a 19% slide in net profit for the third quarter.

The German business software provider said it now expects full-year operating profit to be in a range of €6.5 billion to €6.7 billion ($7.1 billion to $7.3 billion), compared with €6.35 billion in 2015. That estimate, based on calculations not recognized under international financial reporting standards, is up from a previous forecast of €6.4 billion to €6.7 billion.

SAP said it also now expects non-IFRS cloud subscription and support revenue to be in a range of €3 billion to €3.05 billion, compared with €2.3 billion in 2015, in the latest sign of Chief Executive Bill McDermott's efforts to center the company around internet cloud-based software.

Net profit for the period ended Sept. 30 was €730 million, compared with €898 million during the same period a year prior, weighed down by higher share-based compensation expenses.

"This is a perfect reflection of how the share price has increased for shareholders," Mr. McDermott said of the in an interview Friday of the nearly €300 million in compensation expenses. "We have a very happy company today," he added.

SAP's share price has risen almost 20% over the past year, closing at €79.31 on Oct 20.

Mr. McDermott said capital markets had started to value the company as a leading cloud player, rather than just an on-premise software company.

"Investors have said these guys are doing what they said they would do, and there has been a consistent growth trajectory in the cloud," he said.

SAP performed "quite well in terms of profitability and growth" in the third quarter and is on a "good course" to continue growing, according to Harald Schnitzer, an analyst at Germany's DZ Bank.

Revenue rose by 8% to €5.38 billion, driven by a solid uptake of the company's cloud-based offerings. Cloud subscriptions and support revenue climbed by 28%, to €769 million. But the company's traditionally core on-premise software licenses also continued to grow, with licensing and support revenue rising 5%, to €3.67 billion.

"We kept our core business strong and still got a really strong cloud number," Mr. McDermott said.

Write to Christopher Alessi at christopher.alessi@wsj.com

(END) Dow Jones Newswires

October 21, 2016 04:25 ET (08:25 GMT)