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]

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 ...

Core Insights - SAP SE has launched an expanded cloud strategy focusing on digital sovereignty and AI-driven innovation in Europe, addressing regulatory requirements and data protection needs [1][5][10] - The SAP Sovereign Cloud offers flexible deployment options tailored to customer requirements, enabling organizations to innovate securely while maintaining control over their digital assets [2][4][10] Investment Commitment - SAP is committing €20 billion to enhance Europe's digital resilience through secure and regulation-compliant cloud solutions, particularly for the public sector and regulated industries [5][10] Cloud Infrastructure and Offerings - The SAP Cloud Infrastructure (Europe) operates within EU data centers, ensuring compliance with local regulations, while the SAP Sovereign Cloud On-Site provides infrastructure within customer-selected data centers [3][6] - Delos Cloud is specifically designed for the German public sector, facilitating digital transformation while adhering to national sovereignty requirements [4] Financial Performance - SAP's cloud backlog increased by 22% to €18.1 billion, with cloud revenues rising 24% to €5.13 billion, driven by a 30% increase in Cloud ERP Suite revenues to €4.42 billion [8][10] - The company maintains its 2025 outlook, projecting cloud revenues of €21.6–€21.9 billion, reflecting a growth rate of 26–28% at constant currency [8] Growth Strategy - SAP's growth strategy is built on four pillars: product innovation, go-to-market transformation, simplification, and talent investment, aiming for sustained growth through 2027 [9] - The SAP Business Data Cloud is emerging as a core platform, integrating enterprise data to enhance AI-driven operations [11]

Financial Performance - Cloud revenue reached €5130 million, a 24% increase, or 28% at constant currency (cc)[6] - Cloud ERP Suite revenue was €4422 million, up 30%, or 34% at constant currency (cc)[6] - Current cloud backlog increased to €18052 million, a 22% increase, or 28% at constant currency (cc)[6] - Total revenue increased by 9% to €9027 million, or 12% at constant currency (cc)[24] - Cloud and software revenue increased by 11% to €7966 million, or 14% at constant currency (cc)[24] - Non-IFRS operating profit increased by 32% to €2568 million, or 35% at constant currency (cc)[24] - IFRS earnings per share increased by 91% to €145, while Non-IFRS earnings per share increased by 37% to €150[29] - Operating cash flow increased by 71% to €2577 million, and free cash flow increased by 83% to €2357 million[29] Regional Performance - APJ cloud revenue increased by 33%, or 37% at constant currency (cc)[26] - Americas cloud revenue increased by 16%, or 22% at constant currency (cc)[26] - EMEA cloud revenue increased by 29%, or 30% at constant currency (cc)[26] Outlook - The company expects cloud revenue of €216 - €219 billion at constant currency (cc), a 26%-28% increase[31] - The company expects cloud and software revenue of €331 - €336 billion at constant currency (cc), an 11%-13% increase[31] - The company expects Non-IFRS operating profit of €103 - €106 billion at constant currency (cc), a 26%-30% increase[31]

Core Insights - SAP reported strong second-quarter results with adjusted earnings of $1.70, surpassing the consensus estimate of $1.47 [1] - Quarterly revenue reached $10.23 billion, exceeding the Street estimate of $9.11 billion [1] Financial Performance - Current cloud backlog stands at $21.26 billion, reflecting a 22% increase, and a 28% increase at constant currencies [4] - Cloud revenue grew by 24%, with a 28% increase at constant currencies [4] - Revenue from the Cloud ERP Suite increased by 30%, and by 34% at constant currencies [4] - Total revenue rose by 9%, with a 12% increase at constant currencies [4] - IFRS operating profit was reported at $2.93 billion, while non-IFRS operating profit was $3.05 billion, marking a 32% increase and a 35% increase at constant currencies [4] Strategic Initiatives - CEO Christian Klein highlighted the impact of AI innovations, such as Joule and SAP Business Data Cloud, in strengthening the company's portfolio [3]

Core Insights - SAP SE reported strong financial results for Q2 2025, highlighting significant growth in cloud revenue and profitability driven by customer demand and AI innovations [2][3][4] Financial Performance - Total revenue for Q2 2025 reached €9.03 billion, an increase of 9% year-over-year, with a 12% increase at constant currencies [5][12] - Cloud revenue grew by 24% to €5.13 billion, with a 28% increase at constant currencies [8][11] - SaaS/PaaS revenue increased by 26% to €5.05 billion, with a 30% increase in Cloud ERP Suite revenue to €4.42 billion [5][11] - IFRS operating profit rose to €2.46 billion, reflecting a growth of over 100% compared to the previous year [14] - Earnings per share (basic) increased by 91% to €1.45 [15] Operational Highlights - The current cloud backlog grew by 22% to €18.1 billion, with a 28% increase at constant currencies [8][11] - Operating cash flow for Q2 was up 71% to €2.58 billion, while free cash flow increased by 83% to €2.36 billion [16] - The share of more predictable revenue increased to 86%, up 2 percentage points from the previous year [12] Strategic Developments - SAP's "RISE with SAP" initiative continues to attract global customers, indicating strong demand for business transformation solutions [19][20] - Partnerships with Accenture and Alibaba Group were announced to enhance cloud transformation efforts [24][25] Outlook - SAP maintains its financial outlook for 2025, expecting cloud revenue to reach €21.6 – 21.9 billion, representing a growth of 26% to 28% at constant currencies [26][27] - The company anticipates a slight deceleration in current cloud backlog growth for 2025 [27]

Core Insights - SAP SE is set to report its second-quarter 2025 results on July 22, with earnings expected at $1.63 per share, reflecting a 38% increase year-over-year, and revenues projected at $10.4 billion, indicating a 16.47% rise from the previous year [1] Financial Performance - SAP has consistently surpassed earnings estimates in the last four quarters, achieving an average earnings beat of 10%. The company's stock has increased by 56.5% over the past year, significantly outperforming the Computers - Software industry, which grew by 21.4% [2] Cloud Transformation and AI Strategy - The ongoing cloud transformation and AI-driven growth strategy are expected to positively impact SAP's second-quarter performance. The company's cloud revenues rose by 27% year-over-year to €4.99 billion in Q1, with Cloud ERP Suite revenues growing by 34%, making up 85% of total cloud revenues [2][9] - SAP is focusing on Business AI as a key growth driver through 2027, with plans to introduce flexible licensing models for easier transitions to cloud-based versions of its business suite [3] - Significant investments in AI are planned for 2025, with over 30,000 developers dedicated to enhancing AI capabilities and aiming to increase user productivity by 30% by year-end [5][9] Generative AI and Productivity Enhancements - SAP is optimistic about the generative AI trend, expecting it to positively influence future revenues. The company has integrated over 1,300 skills into its AI co-pilot Joule, covering 80% of business and analytical transactions by the end of 2024. AI-assisted contract validation has reduced average contract booking time by 75%, while AI-powered quote-to-cash automation has increased productivity tenfold [4] Competitive Positioning - To maintain a competitive edge in the IT services industry, SAP continues to invest in technological innovations, which may increase research and development costs [7]

Core Viewpoint - SAP stock is currently near its 52-week high, raising questions about whether to hold or sell, with a focus on evaluating the company's strengths and weaknesses [1] Group 1: Cloud Business Performance - SAP's cloud business is a significant driver of growth, with a cloud backlog increasing by 28% to €18.2 billion in Q1 [2] - Cloud revenues rose 27% year-over-year to €4.99 billion, with Cloud ERP Suite revenues growing 34% to €4.25 billion, making up 85% of total cloud revenues [2] - The launch of SAP Business Data Cloud aims to unify enterprise data and has already resulted in 20 deals in Q1 [4] Group 2: Revenue Predictability and Growth Outlook - 86% of SAP's total revenues are now classified as predictable, enhancing long-term earnings visibility [3] - Management projects cloud revenues for the year to be between €21.6 billion and €21.9 billion, reflecting a year-over-year increase of 26-28% [8] Group 3: AI Investments and Future Prospects - SAP is optimistic about the impact of generative AI on future revenues, with over 1,300 skills integrated into its AI co-pilot [9] - The company plans to invest heavily in AI, with more than 30,000 developers focused on enhancing its AI capabilities by 2025 [9] Group 4: Challenges and Market Conditions - SAP faces challenges with declining software license revenues, which fell 10% year-over-year to €0.18 billion, and a 1% decline in services revenue to €1.07 billion [10] - The company is navigating a volatile macroeconomic environment, increasing costs, and stiff competition in the cloud sector [10] Group 5: Investment Strategy and Analyst Outlook - Analysts have raised earnings estimates for SAP over the past 60 days, with increases of 1.9% for the current quarter and 3.3% for the current year [11][13] - Despite a strong growth outlook, SAP's premium valuation with a forward P/E ratio of 41.06X compared to the industry's 31.72X suggests caution for new investors [15]

Core Insights - SAP SE has partnered with Accenture to launch ADVANCE, a cloud transition solution for companies with annual revenues up to $5 billion, enabling rapid implementation in six to twelve months [1][2] - ADVANCE offers preconfigured, industry-specific solutions that integrate SAP Business Suite with Accenture's operational expertise, streamlining finance, procurement, supply chain, and workforce management [2][4] Product Features - ADVANCE packages reduce system complexity and operational costs by incorporating preconfigured industry processes and best practices [5] - The offering emphasizes speed and agility, providing industry-tailored accelerators for quick business outcomes and transparent pricing for efficient budget management [6] - Integration of AI agents and predictive analytics allows businesses to adapt to market changes and enhance decision-making [7] Financial Performance - SAP's cloud revenues reached €4.99 billion, a 27% year-over-year increase, with Cloud ERP Suite revenues growing 34% to €4.25 billion, accounting for 85% of total cloud revenues [9] - For the year, SAP anticipates cloud revenues between €21.6 billion and €21.9 billion, reflecting a 26-28% increase year-over-year [12] Market Outlook - SAP maintains a positive growth outlook despite global uncertainties, with expectations for cloud and software revenues between €33.1 billion and €33.6 billion, indicating an 11-13% year-over-year increase [12][11] - The company's stock has performed well, with a 54.3% increase over the past year compared to the industry's 9.6% growth [13]