SAP Shares Climb on Cloud Business Resilience
SAP.DE
Published on 04/24/2026 at 05:28 am EDT
By Mauro Orru
SAP shares jumped after the German business-software group reported a strong first quarter that showed the resilience of its cloud business, reassuring investors it can weather potential disruption from artificial intelligence and geopolitical tensions that could affect client spending.
The company behind the Concur travel and expense management platform said its current cloud backlog--a closely watched measure of sales that SAP expects over the coming year based on existing contracts--grew 25% at constant currencies, above expectations of around 24%.
SAP shares in Frankfurt gained more than 7% on Friday. However, the stock is down nearly 30% since the year began. Software stocks have taken a beating in recent months after AI advancements raised fears that the technology could replace services for which companies like SAP charge clients. Investors were also concerned that the conflict in the Middle East could prompt clients to review their spending plans and delay software deals.
However, strong current cloud backlog growth is an encouraging sign that clearly shows demand for SAP's products--including its AI portfolio--remains healthy, Deutsche Bank analysts wrote in a note to clients.
Reporting on a non-IFRS basis, SAP said total revenue increased 12% at constant currencies to nearly 9.56 billion euros ($11.17 billion) from a year earlier. Sales from SAP's core cloud business grew 27% to 5.96 billion euros. Analysts had forecast total revenue of 9.53 billion euros and cloud revenue of 5.87 billion euros, according to a non-IFRS consensus provided by the company.
SAP said its cloud business fared extremely well across Brazil, France, Germany, India, South Korea, Switzerland and the U.K., though performance was also strong in the U.S. Chief Executive Christian Klein said SAP was growing faster than the market and that business AI momentum remained strong as enterprises seek to harness the technology to improve their operations.
"The company emphasised that the growing integration of AI across products will drive a gradual increase in consumption-based cloud revenue over time but that the shift is expected to play out over several years as AI adoption expands across the customer base and should be evolutionary rather than disruptive," Barclays analysts wrote in a research note.
SAP's net profit climbed to 2 billion euros from 1.68 billion euros. Operating profit--a closely watched metric for software companies--rose to 2.87 billion euros from nearly 2.46 billion euros, generating an operating margin of 30%. Analysts had forecast an operating profit of 2.71 billion euros and an operating margin of 28.5%, according to the non-IFRS consensus.
SAP, like other European software companies, presents its figures as two sets of numbers. One set is based on the International Financial Reporting Standards--an international accounting method that seeks to provide a global reporting standard--though analysts and investors tend to follow SAP's non-IFRS numbers, which exclude restructuring expenses and acquisition-related charges.
For the year, SAP continues to expect non-IFRS operating profit between 11.9 billion and 12.3 billion euros, cloud revenue of 25.8 billion to 26.2 billion euros and free cash flow of roughly 10 billion euros.
Write to Mauro Orru at [email protected]
(END) Dow Jones Newswires
04-24-26 0528ET