MILAN, January 29, 2026, 10:09 (CET)
SAP shares were poised for their biggest one-day drop since October 2020 on Thursday, plunging 11% by 0852 GMT. Investors zeroed in on a cloud backlog update that missed expectations. Citi analyst Balajee Tirupati said SAP “needed an all-round acceleration” and flagged the update’s “puts and takes,” warning the stock might trail. 1
Walldorf-based SAP reported fourth-quarter revenue of 9.7 billion euros ($11.6 billion), matching the company’s consensus estimates. Cloud revenue reached 5.6 billion euros, slightly above the 5.5 billion euros forecast. The company also announced a fresh two-year share buyback program valued at up to 10 billion euros. Looking ahead, SAP projects cloud revenue between 25.8 billion and 26.2 billion euros in 2026, signaling growth of 23% to 25%. 2
Chief executive Christian Klein described the quarter as “a strong cloud quarter,” highlighting SAP Business AI as a key driver, included in two thirds of fourth-quarter cloud orders. Chief financial officer Dominik Asam noted that SAP “closed 2025 on a high note,” with operating profit and free cash flow surpassing the company’s own forecasts for the year. 3
SAP’s cloud backlog, a key indicator of contracted cloud revenue expected to convert into sales over the next year, climbed 16% to 21.05 billion euros this quarter. On a constant currency basis, that increase was 25%. The company noted that large deals with “termination for convenience” clauses trimmed the figure by about one percentage point. It also announced a new buyback program set to begin in February and continue through the end of 2027. 4
“Backlog” might bring warehouses to mind, but here it mainly refers to paperwork—signed contracts waiting to turn into revenue. “Constant currencies” means SAP is removing exchange rate fluctuations to highlight true growth.
Timing is the catch for investors. Huge “transformational” contracts may shine on paper, yet if revenue kicks in later than expected—or customers drag their feet on migrations—that boost in top-line growth slips further down the road.
SAP’s decline dragged on German shares, while the wider European market held steady. The STOXX 600 edged up 0.2%, but Germany’s DAX slipped 0.9% in early trading. 5
Tech sentiment has been volatile. Microsoft shares dropped 6.2% in Frankfurt following the company’s report of record AI spending alongside a slowdown in cloud-computing growth, underscoring investor skepticism about the returns on hefty AI investments. 6
Ahead of the report, analysts surveyed by Benzinga predicted SAP would deliver earnings per share of $1.76 on $9.77 billion in revenue. 7
SAP management will face questions later Thursday, with the focus expected to return to one key issue: are cloud bookings and AI add-ons growing quickly enough to shift sentiment on the stock?
