Group 1: SGA Global Growth Strategy Overview - SGA's Global Growth Strategy portfolio returned -2.3% (Gross) and -2.5% (Net) in Q3 2025, underperforming the MSCI ACWI's 7.6% and MSCI ACWI Growth's 9.0% returns, primarily due to enthusiasm for AI overshadowing factors like quality and sales stability [1] - The investment objective of SGA is to invest in high-quality growth businesses expected to achieve consistent mid-teens earnings growth, along with stable revenue and cash flow [1] Group 2: SAP SE Analysis - SAP SE is a leading provider of enterprise application and business solutions, with a one-month return of 2.49% and a 52-week loss of 4.10%, closing at $236.92 per share on January 2, 2026, with a market capitalization of $276.437 billion [2] - SAP is recognized as the global leader in ERP application software, serving over 100,000 customers across more than 120 countries, and generates significant free cash flow from recurring, high-margin software maintenance and cloud subscription fees [3] - The enterprise application software market is projected to grow at mid-to-high single-digit rates annually, with SAP's transition from license to subscription expected to yield more predictable and substantial recurring cash flows over time, evidenced by over 25% organic order growth in cloud subscription products [3]

Core Insights - SAP SE reported third-quarter 2025 non-IFRS earnings of €1.59 ($1.86) per share, a 29% increase year-over-year, although below the Zacks Consensus Estimate of $1.69 [1] - Total revenues on a non-IFRS basis reached €9.08 billion ($10.6 billion), marking a 7% year-over-year increase (11% at constant currency), slightly above the Zacks Consensus Estimate of $10.56 billion [1][2] Revenue Growth and Cloud Strategy - The cloud backlog surged 23% (27% at constant currency) to €18.8 billion, indicating strong market demand [3] - The Cloud and software segment, which constitutes 88.3% of total revenues, generated €8.02 billion, an 8% year-over-year increase (12% at constant currency) [3] - Cloud revenues reached €5.29 billion, up 22% year-over-year (27% at constant currency), driven by a 26% growth in Cloud ERP Suite revenues [4] Client Adoption and Market Expansion - The "RISE with SAP" program saw significant adoption among global organizations, including notable clients like Alphabet and Nestlé [5][6] - Major customer wins included engagements from brands such as BMW, Volkswagen Mexico, and Panasonic, showcasing SAP's expanding clientele [7] Financial Performance and Margins - Non-IFRS gross profit increased 7% year-over-year to €6.7 billion, with cloud gross profit rising 24% to €3.97 billion [10] - Non-IFRS operating profit rose 14% to €2.57 billion, with an operating margin of 28.3% [10] Cash Flow and Share Repurchase - As of September 30, 2025, SAP's cash and cash equivalents stood at €9.9 billion, up from €7.94 billion in June [11] - The company generated operating cash of €1.5 billion, a 7% increase year-over-year, and free cash flow rose 5% to €1.27 billion [11][12] Updated Financial Outlook - SAP revised its full-year 2025 guidance, expecting cloud revenue to be near the low end of €21.6–€21.9 billion, reflecting a 26–28% increase from 2024 [14] - The company anticipates non-IFRS operating profit near the high end of €10.3–€10.6 billion, up 26–30% from 2024 [15]