Core Insights - SAP SE has completed the acquisition of SmartRecruiters, aiming to enhance talent acquisition through AI-driven efficiency and innovation [1][10] - The integration of SmartRecruiters' platform with SAP SuccessFactors is expected to improve hiring processes and workforce planning insights [3][10] Group 1: Acquisition and Integration - The acquisition of SmartRecruiters is intended to empower enterprises by streamlining talent acquisition processes [1] - SmartRecruiters offers an AI-native platform that enhances efficiency and streamlines hiring, focusing on both high-volume frontline hiring and enterprise-level recruiting [2] - For SAP SuccessFactors users, SmartRecruiters' innovations will be incorporated to improve features like time-to-hire and candidate experience [3] Group 2: AI and Cloud Strategy - SAP is investing heavily in AI, with over 30,000 developers working to enhance its AI foundation and increase user efficiency by 30% by the end of 2025 [5] - The expansion of the SAP Sovereign Cloud portfolio reflects SAP's commitment to digital sovereignty and AI-driven innovation, particularly in Europe [6] - SAP's growth strategy includes product innovation and embedding AI to drive sustained growth through 2027 [7] Group 3: Market Challenges - SAP faces revenue pressures due to long sales cycles, complex licensing, and shifting budgets, which may impact cloud backlog growth [8] - The performance in the second half of the year is critical as most cloud deals are signed during this period [8]

Financial Data and Key Metrics Changes - Current cloud backlog increased by 29% to €18.2 billion in Q1 [5][37] - Quarterly cloud revenue grew by 26%, approaching the €5 billion mark [5][37] - Total revenue rose by 11% to €9 billion [42] - Operating profit surged by 58% to €2.5 billion, significantly exceeding the guidance for the year [41][45] - Cloud gross margin improved by 2.6 percentage points to 75% [6][40] Business Line Data and Key Metrics Changes - Cloud ERP suite revenue maintained high growth momentum with a 33% increase in Q1, accounting for 85% of total cloud revenue [37] - Software licenses decreased by only 10%, indicating resilience despite being a smaller quarter [38] - Approximately half of cloud order entries included AI use cases, reflecting strong demand for AI integration [13] Market Data and Key Metrics Changes - Strong cloud revenue performance noted in APJ and EMEA regions, with Brazil, Germany, and India showing outstanding results [40] - The Americas region also demonstrated robust performance, with notable strength in Canada and the US [40] Company Strategy and Development Direction - Company emphasizes a suite-first, AI-first approach to expand its offerings [36] - Focus on product innovation, particularly with the launch of Business Data Cloud, which aims to unify and govern business data [22][23] - Continued investment in AI and cloud solutions to enhance customer productivity and reduce implementation costs [30][31] Management's Comments on Operating Environment and Future Outlook - Management expresses confidence in the company's resilience despite high market uncertainty [9][45] - The pipeline for the year remains solid, with no significant deterioration in conversion rates observed [56] - Management acknowledges potential risks from geopolitical tensions and trade disputes but maintains a positive outlook for long-term growth [44][120] Other Important Information - The company plans to provide deeper insights into its growth strategy at the upcoming Sapphire event in May [34][47] - The transformation program concluded in 2024, positioning the company for focused investments in key areas [36] Q&A Session Summary Question: Current trading and confidence in cloud revenue guidance - Management noted strong customer engagement and resilience in supply chains, which supports confidence in cloud revenue guidance despite macro uncertainties [52][56] Question: Deceleration in cloud revenue growth - Management explained that the deceleration was influenced by the timing of cloud deals and expected a rebound in Q2 as these deals ramp up [58][62] Question: Current cloud backlog performance - Current cloud backlog performance was in line with expectations, with no significant changes in customer dynamics despite tariff uncertainties [68][71] Question: Product innovation and Business Data Cloud differentiation - Management clarified that Business Data Cloud offers a more comprehensive solution than the previous SAP Datasphere, enabling better data integration and AI capabilities [78][83] Question: Impact of tariffs on business and cloud margins - Management indicated that while tariffs could impact hardware costs, the company's multi-cloud strategy provides price security and mitigates risks [130][132]