Key Highlights
- First quarter non-IFRS earnings per share reached €1.72, surpassing the consensus forecast of €1.65
- Quarterly revenue climbed 6% on a year-over-year basis to €9.55 billion
- Cloud segment revenue jumped 19% to €5.96 billion, exceeding analyst expectations of €5.89 billion
- Cloud backlog expanded 20% to reach €21.9 billion
- The company reaffirmed its 2026 cloud revenue target of €25.8–€26.2 billion, subject to specific conditions
Shares of SAP’s American depositary receipts soared 7.7% to $175.74 during Friday’s premarket session, reversing course after Thursday’s 6.2% decline that was triggered by broader software sector weakness following disappointing investor reactions to ServiceNow and IBM earnings reports.
The European software powerhouse delivered first quarter non-IFRS earnings of €1.72 per share, outperforming the Street’s €1.65 projection. Quarterly revenue reached €9.55 billion, representing a 6% increase compared to the prior-year period.
The standout performance came from cloud operations. Cloud revenue hit €5.96 billion, marking a 19% year-over-year increase and narrowly exceeding the €5.89 billion consensus estimate from analysts.
Additionally, the company reported a cloud backlog of €21.9 billion at quarter-end, representing 20% growth versus the comparable quarter last year. This metric provides insight into future revenue streams already under contract but not yet recognized.
Non-IFRS operating profit reached €2.87 billion, up from €2.46 billion in the year-ago quarter and exceeding the €2.71 billion analyst consensus.
Thursday’s 6.2% drop in SAP shares reflected widespread selling across the software sector. Market participants grew cautious following earnings announcements from IBM and ServiceNow, despite both companies posting respectable quarterly results.
Friday’s premarket surge indicates investors responded more positively to SAP’s specific performance metrics.
2026 Guidance Maintained With Stipulations
SAP kept its 2026 cloud revenue forecast intact at €25.8 billion to €26.2 billion. Management also indicated that total revenue growth measured in constant currencies should mirror 2025 levels, with meaningful acceleration anticipated in 2027.
However, two important qualifications accompany this guidance. The first involves the pending acquisition of Reltio, a data management company, which is anticipated to finalize during the second or third quarter. The second relates to stability in the Middle East region.
Chief Financial Officer Dominik Asam specifically highlighted potential disruptions in the Strait of Hormuz as a notable risk element. “We don’t see too long of a continuation of the shutdown of the Strait of Hormuz,” he commented to Barron’s, emphasizing that extended disruption could impact worldwide supply chains and economic expansion.
With characteristic pragmatism, he remarked: “In such a meltdown scenario, SAP is probably the lesser of your concerns in terms of exposure in capital markets.”
Cloud Operations Power Performance
SAP’s cloud division has served as the primary growth catalyst for multiple years, partially driven by enterprise adoption of artificial intelligence technologies. The 19% revenue expansion in the first quarter maintains this trajectory.
The €21.9 billion cloud backlog represents committed future revenue streams awaiting recognition on financial statements.
SAP holds the position as Europe’s most valuable technology company by market capitalization, with a valuation of $192.38 billion based on Thursday’s closing price.
The Reltio transaction, unveiled in March, remains subject to regulatory approval and is projected to conclude during the second or third quarter of 2026.
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