Europe's largest software company reported a notable earnings advance for the first quarter, with profit climbing 17% compared with the prior year. The better-than-expected performance was attributed to continued strength in the cloud segment, and the market response was immediate: U.S.-listed shares rose 5.4% after the results were released.
For the three months ended March 31, SAP recorded total revenue of 9.56 billion euros, a 6% increase year-over-year and marginally above a company-compiled consensus estimate of 9.53 billion euros. Cloud revenue was a standout, increasing 19% to 5.96 billion euros, topping the median analysts' forecast of 5.88 billion euros.
On an operating basis that excludes one-off items, SAP's non-IFRS operating profit rose to 2.87 billion euros from 2.46 billion euros in the comparable quarter, surpassing expectations for 2.71 billion euros. Management highlighted ongoing efforts to control costs while preserving profitability amid an uncertain external environment.
Chief Financial Officer Dominik Asam summarized the company stance by saying the firm has kept focus on managing its cost base and maintaining profitability as it navigates an increasingly complex and uncertain macroeconomic and geopolitical environment.
SAP reiterated its full-year revenue outlook, maintaining expectations for overall revenue growth with cloud expansion forecast in a 23% to 25% range. The company flagged that this guidance is contingent on a de-escalation of the Middle East conflict, linking the delivery of its outlook to geopolitical developments.
Looking further ahead, SAP adjusted its medium-term framing for revenue growth: it now expects total revenue growth at constant currencies in 2026 to remain at similar levels to 2025 and to accelerate in 2027. This represents a refinement from its earlier outlook, which projected growth accelerating through 2027.
Exchange rate disclosure in the report noted $1 equals 0.8559 euros.
Summary of reported figures:
- Total revenue (Q1): 9.56 billion euros, up 6%
- Cloud revenue (Q1): 5.96 billion euros, up 19%
- Non-IFRS operating profit (Q1): 2.87 billion euros, up from 2.46 billion euros
- Full-year cloud growth guidance: 23% to 25%, subject to geopolitical developments