Core Insights - SAP unveiled innovations in AI research and role-based assistants at the inaugural SAP Connect event, emphasizing the integration of AI, data, and applications to enhance productivity and internal collaboration [1][3] - The new network of role-based assistants, Joule, is designed to work alongside humans, enabling them to focus on insights and productivity while managing complex workflows [2][3] Group 1: AI and Role-Based Assistants - Joule acts as an AI copilot, enhancing productivity and facilitating internal collaborations through a network of role-based assistants [1] - Each assistant is tailored to specific business roles, coordinating specialized agents to address complex tasks, such as a People Manager Assistant managing compensation anomalies [2] Group 2: Data Integration and Security - The SAP Business Data Cloud (BDC) Connect enables secure, bidirectional data flow across different systems, addressing the issue of siloed data that limits AI's potential [4] - BDC Connect allows data to remain within SAP systems while being accessible in non-SAP environments, thus enhancing security and mitigating data concerns [5] Group 3: New Product Introductions - New products introduced include SAP Supply Chain Orchestration, which utilizes AI to detect real-time risks among suppliers, and SAP Engagement Cloud, which personalizes interactions based on business-critical context [5] - The next-generation SAP Ariba procurement suite is presented as an AI-native solution for spend management, covering the entire process from sourcing to supplier engagement [5]

On Monday, Germany-based SAP SE (NYSE:SAP) unveiled a suite of new AI, data, and application innovations designed to accelerate business transformation at its first-ever SAP Connect event. The enterprise software company introduced an expanded network of role-based AI assistants in Joule, designed to work alongside people to boost performance across business functions. Each assistant connects with specialized agents to manage and execute tasks, helping users focus on insights and productivity rather than ...

SAP reimagines enterprise AI with role-based assistants in Joule that coordinate agents across lines of business , /PRNewswire/ -- At its inaugural SAP Connect event, SAP SE (NYSE: SAP) showcases how the integration of AI, data and applications creates unparalleled business value. These breakthroughs – including a new network of role-based assistants in Joule that partner with humans to elevate performance, an expanding data ecosystem that drives deeper insights, and supply chain software that anticipates d ...

Core Insights - SAP SE reported a strong second-quarter 2025 performance with non-IFRS earnings per share of €1.50 ($1.70), a 37% increase year-over-year, although it fell short of the Zacks Consensus Estimate of $1.63 [1] - Total revenues on a non-IFRS basis reached €9.03 billion ($10.24 billion), marking a 9% year-over-year increase, but also below the Zacks Consensus Estimate of $10.37 billion [1] - The company's cloud revenue surged by 24% year-over-year, driven by robust growth in Cloud ERP Suite revenues [5][8] Financial Performance - Non-IFRS operating profit rose 32% to €2.57 billion, with a margin increase to 28.5%, attributed to improved operational efficiency and cost controls [13] - Non-IFRS gross profit increased 10% to €6.64 billion, with cloud gross profit rising 27% to €3.86 billion [12] - Free cash flow increased significantly by 83% to €2.36 billion during the quarter, indicating strong operational strength [14] Cloud Business Growth - The current cloud backlog surged 22% to €18.1 billion, a key indicator of market success [4] - Cloud revenues reached €5.13 billion, with a notable 30% growth in Cloud ERP Suite revenues [5] - The cloud and software segment accounted for 88.2% of total revenues, generating €7.97 billion, an 11% year-over-year increase [4] Strategic Initiatives - SAP's investment in AI and data platforms is yielding positive results, with the AI assistant Joule enhancing process efficiency and user productivity [2] - The "RISE with SAP" program continues to attract global organizations, indicating strong client adoption [7] - The company initiated a transformation program in January 2024, concluding in Q1 2025, aimed at enhancing operational scalability [16] Customer Engagement - Significant customer wins were reported, including partnerships with major organizations such as Accenture, BMW Group, and L'Oréal [10] - The cloud revenue growth was particularly strong in the APJ and EMEA regions, with standout performances in countries like Brazil, France, and India [11] Future Outlook - SAP reaffirmed its 2025 financial outlook, anticipating cloud revenues between €21.6-€21.9 billion, representing a year-over-year increase of 26-28% [17] - Cloud and software revenues are expected to be in the range of €33.1-€33.6 billion, with a projected increase of 11-13% year-over-year [18] - Free cash flow is estimated to reach around €8 billion, a significant rise from €4.22 billion in 2024 [19]

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 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 Insights - The collaboration between Alibaba and SAP marks a significant partnership between a Chinese tech giant and a European software leader, focusing on AI integration and market expansion [1][15][16] - SAP has seen a remarkable increase in its market value, becoming the highest-valued company in Europe, driven by strong AI business growth [2][4] - The contrasting performance of SAP and the overall German economy raises questions about the disconnect between high-performing tech stocks and macroeconomic fundamentals [4][13] SAP's AI Strategy - SAP's AI strategy is supported by innovative products like Joule, which aims to enhance user productivity by 30% and reduce migration time to SAP Business Suite by 35% [5][10] - The Business Data Cloud (BDC) serves as the data foundation for SAP's AI initiatives, with a projected market size of $300 billion by 2028 and a compound annual growth rate of 24% [6][8] - SAP's ambition extends beyond individual products, aiming to establish itself as a leader in "Suite as a Service" with a comprehensive AI ecosystem [8][9] Financial Performance and Projections - SAP's AI initiatives are expected to significantly boost its cloud service revenues, with a potential increase from €11 billion in support services to over five times that amount in cloud revenues [10][11] - Analysts predict a 17-20% growth in SAP's earnings per share (EPS) for the fiscal year 2026/2027, driven by AI [11][12] Market Response and Analyst Consensus - Positive market feedback was evident during SAP's Sapphire annual conference, with strong attendance and favorable partner responses [12] - Analysts from Morgan Stanley and Bank of America express confidence in SAP's growth potential, citing its robust product pipeline and AI narrative as key drivers of valuation [12][18] Future Collaboration and Market Impact - The partnership between Alibaba and SAP aims to create tailored AI solutions for markets in China, Southeast Asia, the Middle East, and Africa, potentially accelerating the AI transformation of traditional industries [16][18] - This collaboration reflects a broader trend of companies seeking to share innovation risks in the increasingly complex landscape of AI technology [18]

Core Viewpoint - The collaboration between Alibaba and SAP exemplifies the power of AI in driving market capitalization growth despite macroeconomic challenges, highlighting AI as a key narrative in capital markets [2][21]. Group 1: SAP's Performance and Market Impact - SAP has become the highest-valued company in Europe, with its stock price increasing by 25% year-to-date and 60% over the past 12 months, surpassing €300 billion in market capitalization [7][10]. - The strong performance of SAP has significantly contributed to the DAX index, which has seen an 18.85% increase in 2024 and a 15.96% rise in early 2025 [10]. - Despite SAP's success, the German economy is facing challenges, with a 0.2% contraction in 2024 and stagnation expected in 2025, raising questions about the disconnect between SAP's performance and the broader economic environment [10][18]. Group 2: SAP's AI Strategy - SAP's AI strategy includes the launch of Joule, a generative AI tool aimed at enhancing user productivity by 30%, and Business Data Cloud (BDC), which integrates and manages vast amounts of data [11][12]. - The market for BDC is projected to reach $300 billion by 2028, with a compound annual growth rate of 24%, indicating strong demand for SAP's AI solutions [12]. - SAP's AI initiatives are designed to transform its business model, with expectations of converting €11 billion in support service revenue into over five times that in cloud service revenue [14]. Group 3: Market Reception and Analyst Consensus - Positive market feedback was evident at the Sapphire annual conference, with analysts expressing increased confidence in SAP's growth potential and revenue acceleration [16]. - Analysts from Morgan Stanley and Bank of America have highlighted SAP's strong product pipeline and the attractiveness of its AI narrative, supporting a favorable valuation outlook [16][21]. - SAP's global operations and AI-enhanced solutions address common challenges faced by enterprises worldwide, indicating that its growth is not solely tied to the German economy [17]. Group 4: Future Collaboration between Alibaba and SAP - The partnership between Alibaba and SAP will initially focus on technology integration and market expansion, particularly in China and Southeast Asia [20]. - This collaboration aims to create tailored, scalable, and secure AI solutions for regional markets, potentially accelerating the AI adoption in traditional industries [20]. - The alliance reflects a broader trend of cooperation in AI development, which is becoming essential for sharing innovation risks in a complex technological landscape [21].

Core Insights - SAP SE has introduced innovations and partnerships aimed at enhancing business productivity by up to 30 percent through the use of Business AI [1][2] - The generative AI assistant Joule is designed to provide personalized answers and streamline workflows across various applications [2][3] AI Innovations - Joule can assist users throughout their workday, providing real-time insights and anticipating needs while adhering to ethical AI guidelines [3] - A collaboration with Perplexity enhances Joule's capabilities to answer complex business questions using structured and unstructured data [4] - An expanded library of Joule Agents is introduced to optimize business processes across various functions such as customer experience and supply chain management [5] AI Development and Applications - SAP has launched an AI Foundation that serves as an operating system for developing and scaling AI solutions, allowing for quicker creation of effective AI prompts [6] - New intelligent applications in SAP Business Data Cloud are designed to continuously learn and optimize business processes using critical data [7] Strategic Partnerships - SAP is partnering with Palantir to support joint customers in their cloud migration and modernization efforts, facilitating a harmonized data foundation [8] Cloud Solutions - SAP Business Suite packages are introduced to simplify cloud solution adoption for customers, allowing for customization to meet specific business needs [9] - A new solution leveraging Joule aims to accelerate cloud transition, potentially delivering up to 35 percent faster time to value [10]

Core Viewpoint - In the ongoing digital transformation, companies must either become self-disruptors or risk becoming mere spectators of the era. SAP's AI transformation has successfully aligned technology, ecosystem, and business model evolution, leading to robust growth through strategic investments and customer-centric product iterations [1][2][22]. Group 1: SAP's Transformations - SAP has undergone four significant transformations since its inception in 1972, each aligned with major technological waves: the internet, mobile computing, cloud technology, and currently, artificial intelligence [2][13]. - The first transformation (1999-2009) involved SAP's response to the internet, marked by the launch of mySAP.com, which integrated e-commerce and supply chain management [4][5][8]. - The second transformation (2010-2015) was characterized by the acquisition of Sybase for mobile capabilities and the integration of cloud solutions, including the purchase of SuccessFactors [11][12][14]. - The third transformation (2015-2020) focused on full cloud integration with the launch of S/4HANA and the SAP Cloud Platform, which significantly increased cloud subscription revenue [16][17]. - The ongoing fourth transformation (2020-present) emphasizes the integration of generative AI into SAP's offerings, including the GROW with SAP solution launched in partnership with Amazon Web Services [18][21]. Group 2: Financial Performance - SAP's cloud ERP suite revenue reached €14.166 billion in 2024, up from €10.626 billion in 2023, reflecting a strong growth trajectory [26]. - Total revenue for SAP in 2024 was €34.176 billion, compared to €31.207 billion in 2023, indicating a robust overall performance [26]. - The cloud business revenue growth rate was 25% year-over-year in Q2 2024, with a total order volume of €148 billion, showcasing the effectiveness of SAP's integration strategies [21][25]. Group 3: AI Strategy and Investments - SAP plans to invest nearly €1 billion over the next two years to develop AI use cases and enhance its business transformation toolkit through acquisitions [38]. - The company has made significant acquisitions to bolster its AI capabilities, including LeanIX and WalkMe, which support its "continuous business transformation" strategy [19][24]. - SAP's AI strategy includes the integration of AI into core business processes, with a focus on enhancing user efficiency and automating tasks across various business functions [35][37]. Group 4: Challenges and Solutions - Prior to its AI transformation, SAP faced challenges such as low adoption rates of early AI tools and difficulties in integrating AI with core business processes [27][30]. - The company has recognized the need for robust risk management frameworks to address potential issues related to algorithm biases and data quality [40][41]. - SAP's approach to AI has evolved from initial testing to full integration, emphasizing practical applications and compliance with ethical standards [31][34].