Germany's SAP hits €10 billion quarterly revenue milestone, lifts 2026 view

Oct 21 : Europe's largest tech company SAP on Wednesday achieved a €10 billion ($11.2 billion) quarterly revenue milestone for the first time, while reporting a 26 per cent rise in current cloud backlog and lifting its 2026 revenue outlook to the upper end of its range.

Cloud revenue rose 26 per cent to €6.67 billion in the third quarter while non-IFRS operating profit rose 18 per cent to €3.03 billion. SAP's cloud backlog at constant currencies grew 26 per cent to €24.14 billion ($27.11 billion), ahead of the 24 per cent to 25 per cent growth UBS had forecast. SAP held its operating profit outlook at €11.8 billion to €12.2 billion 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 per cent in one day. 

"AI was the main driver behind customers move to the cloud," in the quarter, 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. 

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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 per cent from 28.3 per cent while free cash flow rose 36 per cent to €1.72 billion.

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 to €26.2 billion forecast, up 23 per cent to 25 per cent. Including the declining classic licence business, it sees revenue of €36.3 billion to €36.8 billion, up 12 per cent to 13 per cent, 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.

($1 = 0.8903 euros)