WALLDORF, Germany, April 24, 2026, 00:09 (CEST)
SAP, Europe’s top software company, posted first-quarter numbers late Thursday that beat forecasts, driven by solid cloud demand. Operating profit came in at 2.74 billion euros, up 17%, while cloud revenue increased 19% to reach 5.96 billion euros. The company reaffirmed its 2026 targets.
Software shares are under pressure, rattled by ongoing AI disruption worries and postponed deals linked to Middle East tensions. Softer software numbers from IBM, combined with ServiceNow flagging delays in government contracts in that region, have triggered renewed selling. UBS strategist Kiran Ganesh told Reuters that the increasing “bifurcation within tech and within AI” stands out as a key market force right now. Reuters
SAP topped consensus estimates tracked by Visible Alpha with its key cloud metrics. The company’s current cloud backlog—its own gauge of contracted cloud revenue for the coming year—jumped 20% to 21.93 billion euros. Cloud revenue climbed 27% in constant currencies, SAP’s way of stripping out currency effects. Analysts were looking for 5.87 billion euros in cloud revenue, total revenue of 9.53 billion euros, adjusted operating profit of 2.71 billion euros and adjusted EPS of 1.59 euros, while the company delivered 1.72 euros per share.
SAP is taking share and outpacing the market, CEO Christian Klein said, pointing to demand for the company’s suite and AI offerings. Cloud ERP Suite revenue climbed 23%, or 30% when stripping out currency swings.
CFO Dominik Asam called it “disciplined execution” when talking up the quarter’s revenue and profit results. Adjusted operating margin hit 30.0%, up from 27.2% last year. But software license revenue tumbled 37%, and software support dropped 11%—underscoring where the growth is coming from: cloud, not the legacy businesses. SAP
SAP stuck to its forecast for full-year cloud revenue, still looking for 25.8 billion to 26.2 billion euros, and kept adjusted operating profit guidance in a range of 11.9 billion to 12.3 billion euros, both based on constant currencies. Executives said those targets hinge on a near-term cooling of Middle East tensions and closing the Reltio acquisition, announced in March, during the second or third quarter—part of SAP’s push to build out its data backbone for analytics and AI agents.
SAP’s U.S. shares finished the regular session off 6.2%, but things flipped fast once the release hit. The stock initially jumped roughly 3.5% after hours, then stretched that gain to almost 7% in late trading.
Even so, the quarter had its blemishes. SAP flagged that cloud revenue was boosted by some one-off factors, cautioning that cloud growth will likely slow in Q2; free cash flow dropped 9% to 3.25 billion euros, weighed down by a 408 million euro payment for the Teradata litigation settlement. Looking ahead, the company expects total revenue growth at constant currencies in 2026 to remain roughly in line with 2025, picking up speed in 2027. Management also warned that a worsening situation in the Middle East could have a significant impact on operations.
