SAP’s shares surged by 5% at Tuesday’s market open, reaching a record high of 221 euros ($239.21). This came after the German software giant raised its full-year targets, driven by impressive third-quarter cloud performance.
Cloud revenue saw a 27% increase, adjusted for currency fluctuations, amounting to 4.35 billion euros ($4.71 billion). This growth was fueled by a 36% rise in Cloud ERP Suite sales.
CEO Christian Klein attributed much of this growth to artificial intelligence, noting that approximately 30% of cloud contracts in the third quarter featured AI use cases.
Barclays analysts described SAP’s 2025 guidance as “conservative,” highlighting positive comments from management on the matter.
Operating profit increased by 28% to 2.24 billion euros, surpassing forecasts, due to cost-cutting measures and fewer new hires, CFO Dominik Asam noted. The company is also preparing for AI’s future impact, with restructuring costs expected to reach around 3 billion euros as up to 10,000 jobs are evaluated.
As a result, SAP raised its full-year cloud and software revenue forecast to 29.5-29.8 billion euros from 29-29.5 billion euros, while projecting 2024 operating profit at 7.8 billion euros, up from the previous forecast of 7.6-7.9 billion euros.
JPMorgan analysts see SAP’s performance as an indicator of the broader health of enterprise IT spending, noting implications for competitors like Oracle, Workday, and Microsoft.
($1 = 0.9239 euros)
4o
