EUROPE’S largest tech company SAP on Wednesday achieved a 10-billion-euros ($11.2 billion) quarterly revenue milestone for the first time, while reporting a 26-percent rise in current cloud backlog and lifting its 2026 revenue outlook to the upper end of its range.
Cloud revenue rose 26 percent to 6.67 billion euros in the third quarter while non-IFRS operating profit rose 18 percent to 3.03 billion euros. SAP’s cloud backlog at constant currencies grew 26 percent to 24.14 billion euros ($27.11 billion), ahead of the 24-percent to 25-percent growth UBS had forecast. SAP held its operating profit outlook at 11.8 billion euros to 12.2 billion euros at constant currencies, a range trimmed in July for its recent acquisitions.
SAP’s order book is watched as a gauge of enterprise tech spending worldwide as its software suite runs accounting and payroll at many of the world’s biggest companies. A miss on the measure in January sent the shares down 15 percent in one day.
“AI (artificial intelligence) was the main driver behind customers’ move to the cloud,” CEO Christian Klein told analysts, with companies signing subscription contracts to get access to SAP’s Joule assistant platform connecting to over 70 AI models. “SAP is not committing to a preferred model,” he said.
CFO Dominik Asam said the fourth quarter would decide how the year lands, describing a gloomy backdrop with rising oil prices and US interest rates that “start to develop teeth.” SAP said growth in cloud revenue was helped by customers returning from “financial distress.” Its profit margin widened to 29.5 percent from 28.3 percent while free cash flow rose 36 percent to 1.72 billion euros.
SAP now expects 2026 subscription revenue — access to software customers rent remotely rather than buy and run themselves — toward the top of its 25.8 billion euros to 26.2 billion euros forecast, up 23 percent to 25 percent. Including the declining classic license business, it sees revenue of 36.3 billion euros to 36.8 billion euros, up 12 percent to 13 percent, at the top of its range.
Klein called it “an outstanding quarter.” Customers are “investing in the technology behind” the company’s AI strategy, he said. New cloud customers included AstraZeneca, Infineon.
