SAP Tops 10 Billion Euros in a Quarter as Cloud Backlog Surges
Revenue rose 13 percent to 10.27 billion euros and the cloud order book jumped 28 percent to 24.14 billion euros. SAP lifted its cloud outlook to the top of its range and held its profit forecast.
Key points
- SAP passed 10 billion euros in quarterly revenue for the first time, the German software group reported on Wednesday evening, as demand for its cloud products and AI tools outran what analysts…
- SAP's current cloud backlog, the contracted work it has booked but not yet billed as revenue, reached 24.14 billion euros, up 28 percent, or 26 percent at constant currencies.
- Non-IFRS operating profit rose 18 percent to 3.03 billion euros, and the operating margin widened to 29.5 percent from 28.3 percent a year earlier.
SAP passed 10 billion euros in quarterly revenue for the first time, the German software group reported on Wednesday evening, as demand for its cloud products and AI tools outran what analysts expected. Total revenue for the third quarter rose 13 percent to 10.27 billion euros. Cloud revenue climbed 26 percent to 6.67 billion euros.
The number investors watch most
SAP's current cloud backlog, the contracted work it has booked but not yet billed as revenue, reached 24.14 billion euros, up 28 percent, or 26 percent at constant currencies. That beat the 24 to 25 percent growth UBS had forecast. The backlog matters because SAP's software runs accounting and payroll at many of the world's largest companies, so its order book is read as a gauge of business technology spending worldwide. A miss on the same measure in January sent the shares down 15 percent in one day.
Non-IFRS operating profit rose 18 percent to 3.03 billion euros, and the operating margin widened to 29.5 percent from 28.3 percent a year earlier. Free cash flow jumped 36 percent to 1.72 billion euros. Finance chief Dominik Asam noted that SAP crossed both 10 billion euros of revenue and 3 billion euros of adjusted operating profit in a single quarter for the first time.
Guidance raised at the top, held on profit
SAP now expects 2026 cloud revenue to reach the upper end of its range of 25.8 billion to 26.2 billion euros at constant currencies. It held its operating profit outlook at 11.8 billion to 12.2 billion euros. Chief executive Christian Klein told analysts that AI was the main driver behind customers moving to the cloud in the quarter, with companies signing subscriptions to gain access to SAP's Joule assistant, which connects to more than 70 AI models.
The quarter had help from one-off effects. SAP said cloud growth was lifted by a revenue catch-up from customers returning from financial distress, and that the Reltio, Dremio and Prior Labs acquisitions added 49 million euros to total revenue. Older businesses kept shrinking: software license revenue fell 9 percent to 147 million euros and support revenue fell 5 percent to 2.43 billion euros.
What is next
Asam warned that the fourth quarter will decide how the year lands, describing a difficult backdrop of rising oil prices and US interest rates that are starting to develop teeth. SAP shares had risen 2 percent in Wednesday's session before the results. On the same day, a Munich court ruled against SAP in a patent dispute and barred one feature of its Signavio product, a reminder that Europe's largest technology company carries legal risks alongside its cloud growth.