Core Viewpoint - SAP's Q2 earnings report revealed that currency fluctuations negatively impacted cloud revenue, leading to a decline in stock price after the announcement [1][15]. Financial Highlights - Total revenue for Q2 reached €9.027 billion, a 9% year-over-year increase (12% at constant currency), but fell short of analyst expectations of €9.07 billion [2]. - Cloud and software revenue amounted to €7.97 billion, an 11% increase year-over-year, slightly below the expected €7.99 billion [2]. - Non-IFRS operating profit rose to €2.568 billion [3]. - Basic EPS increased by 91% to €1.45, while diluted EPS grew by 92% to €1.44 [3]. - Free cash flow surged to €2.357 billion, marking an 83% year-over-year increase [4]. Cloud Business Performance - Cloud revenue reached €5.13 billion, a 24% increase (28% at constant currency), but was below the expected €5.17 billion [5]. - Cloud ERP suite revenue, including S/4HANA Cloud, hit €4.422 billion, growing 30% year-over-year (34% at constant currency) [5]. - Cloud backlog stood at €18.052 billion, a 22% increase (28% at constant currency), but also fell short of the anticipated €18.5 billion [5][14]. - Non-IFRS gross profit for cloud business increased to €3.856 billion, with a gross margin of 75.2%, up from 73.3% in Q2 2024 [5]. Other Business Segments - Software license revenue declined by 15% to €190 million, a 13% decrease at constant currency [6]. - Service revenue decreased by 5% to €1.06 billion, down 2% at constant currency [7]. Regional Performance - Revenue in the Asia-Pacific and Japan region grew by 33% (37% at constant currency) [8]. - Cloud revenue in Europe, the Middle East, and Africa increased by 29% (30% at constant currency) [9]. - Cloud revenue in the Americas rose by 16% (22% at constant currency) [10]. Future Guidance - SAP is optimistic about 2025 cloud revenue, projecting it to be between €21.6 billion and €21.9 billion, representing a year-over-year growth of 26% to 28% [11]. - Total revenue for 2025 is expected to be between €33.1 billion and €33.6 billion, with growth of 11% to 13% [12]. - Non-IFRS operating profit for 2025 is anticipated to be between €10.3 billion and €10.6 billion, reflecting a growth of 26% to 30% [12]. - Free cash flow for 2025 is projected to be around €8 billion, significantly up from €4.22 billion in 2024 [12]. Market Context - SAP's largest market is the U.S., accounting for over 30% of total sales, and the weakening dollar has created currency pressure [13]. - Despite the challenges, SAP's cloud business has shown strong growth, driven by long-term customer commitments to cloud migration [12].