Core Thesis - SAP SE is positioned as a leading enterprise software company that has successfully transitioned to a cloud-first model, enhancing its growth potential and market visibility [2][5]. Financial Performance - As of October 10th, SAP's share price was $265.53, with trailing and forward P/E ratios of 41.67 and 33.11 respectively [1]. - Cloud revenue increased by 26% year-over-year, while cloud ERP grew by 33% year-over-year, indicating strong demand for its services [4]. - The cloud backlog has risen nearly 30% to €18 billion, providing visibility for future growth [4]. - Free cash flow is expected to rebound to €8 billion in FY2025, supported by expanding margins and a solid net cash position [4]. Customer Retention and Market Position - Over 85% of new bookings are cloud-based, with a customer retention rate exceeding 98%, which creates significant switching costs and a durable competitive advantage [3][4]. - SAP's systems are deeply integrated into corporate workflows, reinforcing its position in the market [3]. Growth Strategy - The company aims for long-term double-digit growth through the migration of over 300,000 customers to cloud subscriptions, expansion of AI features, and entry into new verticals and SMEs [5]. - Investment cycles are winding down, and operational efficiency is expected to improve as cloud operations scale [5]. Market Perception - Despite being undervalued in U.S. markets due to its operational complexity and European roots, SAP is recognized for its scale, resilience, and potential for compounding growth [5][6]. - The stock has depreciated approximately 9.23% since previous bullish coverage, but the long-term growth thesis remains intact [7].

Core Insights - SAP reported Q3 earnings of $1.85 per share, exceeding analyst expectations of $1.69, while quarterly revenue was $10.54 billion, slightly below the estimate of $10.57 billion [2][4]. Financial Performance - Cloud revenue grew by 22%, and 27% when adjusted for constant currencies [5]. - Cloud ERP Suite revenue increased by 26%, and 31% at constant currencies [5]. - Total revenue rose by 7%, and 11% at constant currencies [5]. - IFRS operating profit increased by 12%, while non-IFRS operating profit rose by 14%, and 19% at constant currencies [5]. Market Position and Outlook - CEO Christian Klein highlighted strong cloud revenue growth of 27% and emphasized gaining market share as customers adopt solutions across the Business Suite [4]. - The current cloud backlog stands at $21.8 billion, reflecting a 23% increase, and a 27% increase at constant currencies [5]. - The company expressed confidence in its revenue growth ambitions for 2026, supported by a strong pipeline for Q4 [4].

Third Quarter 2025 Results Christian Klein, CEO Dominik Asam, CFO October 22, 2025 Christian Klein CEO Q3 was a great quarter 4,351 (+27%) 4,708 (+27%) 4,993 (+26%) 5,130 (+28%) 5,290 (+27%) 3,209 (+28%) 3,458 (+29%) 3,745 (+30%) 3,856 (+31%) 3,972 (+28%) Q3 24 Q4 24 Q1 25 Q2 25 Q3 25 Cloud revenue in € millions (yoy @cc) Cloud gross profit in € millions (yoy @cc) Current cloud backlog € millions 18,839 ▲ +23% (+27% @cc) Cloud revenue € millions 5,290 ▲ +22% (+27% @cc) Cloud ERP Suite revenue € millions 4,5 ...

Financial Performance - Year-to-Date Free Cash Flow reached $338 million[22] - ACV Growth was 14%[22] - Pega Cloud ACV Growth achieved 27%[22] - Total Backlog increased by 19% to $1755 million, with Current Backlog growing by 15% and Long-term Backlog by 23%[83, 84] - Net ACV Add for 2025 is $147 million, a 52% increase over 2024[77] Market Opportunity and Growth Strategy - The company is targeting a $150 billion+ market opportunity by FY29[27, 57] - Total ACV grew from $1360 million to $1557 million, a 14% increase[61, 72, 75] - Pega Cloud ACV grew from $641 million to $815 million, a 27% increase[72, 75] Pega Cloud - Pega Cloud gross margin has improved over time, reaching 78% in the Trailing 12 Months[87]

Company Overview - UnifyApps is a startup that connects corporate systems with AI technology to automate routine tasks such as claims processing [1] - The company was founded in 2023, shortly after the launch of ChatGPT, which sparked the generative AI boom [3] - UnifyApps describes itself as an "enterprise operating system for AI" that integrates systems like Salesforce and Workday with large language models [3] Funding and Valuation - UnifyApps raised $50 million in a Series B funding round led by WestBridge Capital, bringing its total fundraising to approximately $81 million [2][7] - The funding round valued the startup at around $250 million [2] Revenue and Growth - The company's revenue has increased more than sevenfold year over year, although specific figures were not disclosed [5] - UnifyApps plans to use the new funds to expand its team by 110 employees and accelerate platform development [7] Clientele and Use Cases - Notable customers include Lowe's Companies, HDFC Bank, and Deutsche Telekom, utilizing the software for automating HR tasks, speeding up claims processing, and optimizing supply chains [4] Market Position and Competition - UnifyApps competes with automation technology developers like UiPath and Automation Anywhere, as well as AI solutions from major tech companies such as Microsoft [5] - The company is positioned as purpose-built for AI, contrasting with competitors that adapt older platforms [6] Industry Demand - There is a growing demand for AI automation tools as businesses face high failure rates in AI project implementations, with a study indicating that about 95% of AI projects yield no returns [6]

Core Insights - Wall Street analysts view Nvidia and Microsoft as strong buys due to the ongoing buildout of artificial intelligence infrastructure [1][2] Nvidia - Nvidia is a leader in accelerated computing, particularly known for its GPUs, holding over 90% market share in data center GPUs, with a market expected to grow at 36% annually through 2033 [4][10] - The company employs a full-stack approach to accelerated computing, integrating CPUs, interconnects, networking, and software, which allows for lower total cost of ownership [5][9] - Nvidia's competitive advantage includes its CUDA software platform, which supports GPU-accelerated applications, making it difficult for competitors to match [6][7] - Analysts have raised Nvidia's target price to $320 per share, indicating a potential upside of 75% from its current price of $182 [8] - Nvidia's earnings are expected to grow at 36% annually over the next three years, making its current valuation of 52 times earnings appear reasonable [10] Microsoft - Microsoft is the largest enterprise software company, with a strong presence in various markets, including business intelligence and cybersecurity [12] - The company is well-positioned to capitalize on AI, with its copilot applications reaching over 100 million monthly active users [12] - Microsoft Azure, the second-largest public cloud, has seen cloud services revenue grow at over 30% for the last eight quarters, accelerating to 39% recently [13][14] - Analysts expect Microsoft's earnings to grow at 12% annually over the next three years, but its current valuation of 38 times earnings may seem expensive compared to Nvidia's PEG ratio of 1.4 [15]

Company Performance - Apple is experiencing a resurgence in market favor, driven by strong sales of the iPhone 17 in the US and China, as well as positive reception for the latest iPad [1][2] - Revenues for Apple are expected to increase, reflecting a new adoption cycle for its products [2][5] - The iPhone 17 features significant design upgrades, with potential for a foldable model next year, which could further boost revenue growth [5] Financial Strength - Apple is compared to US Treasury bonds in terms of stability, boasting an exceptional balance sheet and strong free cash flow [4][7] - Approximately 300 to 400 million iPhones are over four years old, indicating a substantial upgrade opportunity for Apple [4] Valuation and Market Position - Apple's current trading valuation is around 35 times trailing earnings and 31 to 32 times forward earnings, which is considered stable given its fundamentals [8] - The company is part of a select group of tech stocks, referred to as the "Splendid Six," which includes Microsoft, Nvidia, Google, Amazon, and Meta, all of which are viewed as staples in investment portfolios [9][10] Industry Trends - The enterprise software sector, including companies like Salesforce, is facing challenges due to the rise of AI, which may impact their market positions [12] - Despite the challenges, Salesforce is recognized for its strong base and efforts to adapt to AI, suggesting potential resilience in the face of industry changes [12]

Core Insights - The article discusses how AI is transforming the ERP landscape, with SAP's new strategy emphasizing "AI-first, suite-first" to lead growth in the AI era [2][4][5] - SAP's Business Suite is positioned as essential for successful AI application, integrating AI capabilities into workflows and collaborating with external systems [2][6] Industry Trends - AI is pushing the ERP industry from "tool standardization" to "value scenario" transformation, highlighting the need for dynamic responses rather than rigid processes [4][5] - Major ERP players are adapting to AI, with Microsoft Dynamics 365 focusing on human-machine collaboration, while Infor targets cost reduction in manufacturing [5][6] SAP's Strategy - SAP aims to embed more AI capabilities within its platform while allowing third-party AI agents to integrate directly with its processes through open APIs [5][6] - The company recognizes the importance of balancing core stability with external flexibility to avoid being outpaced by AI tools [6][9] Market Positioning - SAP's approach to AI and cloud migration is tailored to the unique demands of the Chinese market, where local enterprises show strong motivation to adopt new technologies [10][11] - The collaboration with Alibaba Cloud is seen as a strategic move to enhance service delivery and support local enterprises in their digital transformation [15][18] Customer Engagement - Many CEOs express anxiety about missing out on AI advancements, prompting SAP to guide clients in understanding the long-term value of AI and the importance of foundational digital transformation [13][14] - SAP's value proposition lies in its ability to standardize and structure data at the source, reducing the burden of manual data cleaning [14] Organizational Evolution - The new leadership at SAP China emphasizes the need for rapid adaptation and learning within the team to meet the fast-paced changes in the AI landscape [17][18] - The focus is on creating an open technical ecosystem that allows for better integration with local AI companies and enhances the capabilities of developers [18]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $276 million, up 3% year-over-year, and up 7% when excluding license and maintenance revenue [17][18] - Cloud revenue increased by 21% to $105 million, slightly better than expected [18] - Services revenue declined by 3% to $133 million, impacted by budgetary constraints [18] - RPO (Remaining Performance Obligations) increased by 23% year-over-year to $2.1 billion [4][18] - Adjusted operating profit was $103 million with an adjusted operating margin of 37.5%, up about 40 basis points year-over-year [19] - Q3 adjusted earnings per share was $1.36, up 1%, while GAAP EPS was $0.96, down 7% [20] Business Line Data and Key Metrics Changes - Cloud revenue growth was a significant driver of top-line performance, with strong execution in services revenue [4][18] - New logos represented approximately 35% of the pipeline at the end of Q3, with a focus on converting on-premise customers to cloud solutions [6][8] - The company reported notable deals across various sectors, including healthcare, retail, and food distribution, indicating a diverse customer base [6][7] Market Data and Key Metrics Changes - The company experienced strong demand across multiple verticals, including retail, technology, and logistics [6] - Win rates remained robust at 70%, with a growing pipeline of future conversion opportunities [4][18] Company Strategy and Development Direction - The company is focused on strategic investments to drive new customer acquisition, cross-selling, and converting on-premise customers to cloud solutions [4][27] - The introduction of Agentic AI across all solutions aims to enhance operational efficiency and customer productivity [10][12] - The company plans to provide initial annual guidance in Q4 to align with software peers and improve transparency [25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving the high end of RPO goals for 2025 and expects 20% cloud revenue growth in 2026 despite macroeconomic uncertainties [27][26] - The company is confident in its ability to navigate the current volatile environment, supported by a strong backlog and pipeline [18][26] Other Important Information - The company announced the appointment of Greg Betts as Chief Operating Officer to enhance operational frameworks around conversions and renewals [9][10] - The company is investing in sales and marketing to support growth initiatives and improve customer engagement [9][64] Q&A Session Summary Question: Can you share more on RPO levels and visibility for 2026? - Management noted a 23% increase in RPO year-over-year and highlighted a major renewal cycle coming in the next 18 months, which provides optimism for future RPO levels [30][31] Question: What are the conversion strategies for on-premise customers? - The company is taking a more proactive approach to conversions, offering fixed-fee, fixed-timeline options to a cohort of similar customers, resulting in a significant increase in pipeline deals [34][35] Question: How is the fourth quarter shaping up compared to last year? - Management indicated that the fourth quarter is off to a strong start, with expectations for a performance similar to the previous year [39] Question: What is the impact of Agentic AI on internal operations? - Management stated that Agentic AI is providing leverage across departments, enhancing productivity without reducing R&D headcount [80] Question: What is the outlook for services as you head into 2026? - The services pipeline is strengthening, and management is optimistic about growth as they continue to execute well [50][51] Question: How is the company scaling its partner ecosystem? - The company is enhancing its partner program to align more closely with successful models from other software companies, focusing on building trust and clarity [56][58]

Core Viewpoint - Navan has officially launched its initial public offering (IPO) roadshow, marking a significant step towards becoming a publicly traded company [1] Group 1: IPO Details - Navan plans to offer a total of 36,924,406 shares of Class A common stock, with an expected price range between $24.00 and $26.00 per share [2] - Of the total shares, 30 million will be issued by Navan, while 6,924,406 shares will be sold by existing stockholders, with Navan not receiving any proceeds from the stockholder sales [2] - The company has granted underwriters a 30-day option to purchase up to 5,538,660 additional shares to cover potential over-allotments [3] Group 2: Listing and Underwriters - Navan aims to list its Class A common stock on the Nasdaq Global Select Market under the ticker symbol "NAVN" [4][10] - The underwriting group includes Goldman Sachs and Citigroup as lead book-running managers, with Jefferies, Mizuho, and Morgan Stanley as joint bookrunners [6] Group 3: Business Model and Market Position - Navan operates as an all-in-one business platform that integrates travel management, payments, and expense tracking, streamlining corporate travel and spending [7] - The IPO reflects Navan's growing confidence in its market position and ambition to become a leader in the enterprise software sector [8][11] Group 4: Purpose of IPO - The company is going public to raise capital and expand its presence in the business travel and expense management space [9][11]