Despite everything, the news was initially well received on the financial market: SAP’s share depositary receipts traded in the USA gained seven percent in after-hours US trading. The company exceeded the average expectations of analysts with its cloud sales and profits in the first quarter.
Overall, the group’s sales grew by six percent year-on-year to almost 9.6 billion euros. The drivers were revenues from cloud software, which rose by 19 percent. The revenue expected from cloud contracts in the next twelve months (current cloud backlog – CCB) increased by 20 percent to 21.9 billion euros at the end of March.
Earnings before interest and taxes adjusted for special effects grew by 17 percent to almost 2.9 billion euros. The bottom line was a profit of 1.9 billion euros, an increase of 8 percent.
CEO Christian Klein cited the dynamics surrounding artificial intelligence among corporate customers as a particular success driver. “We are growing significantly faster than the market, are continuing to expand our market shares and are seeing customers increasingly using additional solutions from our suite and increasingly our AI offerings.”
However, management made it clear in the quarterly report that the positive development from the beginning of the year is unlikely to continue. Cloud revenue growth is expected to weaken in the second quarter. In addition, the adjusted operating result in the first quarter benefited from a decline in share-based compensation costs.
On the other hand, SAP had to pay more than 400 million euros in the first quarter to settle an old legal dispute with Teradata in the USA over the Hana database technology. This put a strain on cash flow.
For the full year, Klein now expects cloud revenue to continue to grow by 23 to 25 percent in constant currency terms. Total sales, which increased by 11 percent after adjusting for currency effects in 2025, are now expected to grow again at approximately the same rate. The previously announced acceleration is not scheduled to begin until 2027. Nevertheless, the operating result in 2026 is expected to increase by 14 to 18 percent after adjusting for currency effects, as planned.
However, the board of directors does not yet dare to estimate what the war in the Persian Gulf could mean for SAP. However, the developments “could potentially have significant negative consequences” if the situation persists or worsens.
