Cloud and AI

SAP announced total revenue of 9.08 billion EUR, which is only slightly below 9.15 billion representing the consensus of the London Stock Exchange Group (LSEG), but at the same time 7% higher than a year ago. The company’s cloud revenues developed somewhat more positively, increasing by 22% year-on-year, which proves that the transition from traditional software licenses to modern cloud solutions is paying off. In addition, investor confidence was further strengthened by another specific figure – the cloud backlog, i.e., the value of contracted deals that are yet to be invoiced. It recorded a year-on-year increase of 23%, reaching a record 18.8 billion EUR. According to Christian Klein, the CEO, this is clear evidence that AI is the main reason why customers are signing new contracts with SAP. Klein also emphasized that SAP is not playing with trendy phrases. The long-term goal is not to sell the hype around AI but to implement artificial intelligence into business processes in a practical way. The company already uses AI in areas such as planning, finance, and supply chain management, significantly streamlining internal processes for large enterprises.

Europe’s answer to American giants

Across the Atlantic, American companies such as Microsoft, Google, and Salesforce are constantly competing to introduce new AI solutions, while SAP is trying to stand out by taking a different approach – European trustworthiness and a focus on security. Klein openly states that European companies are looking for stable, regulation-balanced solutions that effectively protect corporate data. “I am not sure whether the EU is choosing the right strategy,” he noted with slight criticism. In the United States, the approach is as follows: “Give me your AI, let’s test it, we will improve and optimize it over time.” We in Europe build on trust and quality, which is our primary competitive advantage.

Looking ahead

On the one hand, failing to meet revenue expectations may indicate certain risks, but the outlook for the future remains optimistic. The company already has 80 to 85% of its revenue for next year secured through existing contracts, which is an exceptionally strong signal of stability in the cloud software sector. Nevertheless, the company admitted to a slight slowdown in the signing of new contracts, meaning that some deals were postponed to a later period, which could have affected the results in the short term. According to Deutsche Bank, which named SAP a “top pick” in the European technology sector, this situation is only temporary. “Although there are certain delays in signing contracts, SAP continues to meet its goals very well,” said analyst J. Schaller.

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Sources:

https://www.cnbc.com/2025/10/23/europes-big-ai-hope-sap-books-85percent-of-2026-revenue-as-deals-boom-.html

https://www.cnbc.com/2025/03/25/sap-becomes-europes-most-valuable-firm-amid-german-stock-boom.html

https://www.sap.com/investors/en/financial-documents-and-events/recent-results.html