Intel Q1 a start, but no quick fixes ahead

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

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Intel's first quarter results were better-than-expected and new CEO Lip-Bu Tan said the company will undergo a restructuring to improve "execution and operational efficiency while empowering our engineers to create great products."

The chipmaker, which has been walloped by Nvidia and AMD, said it will aim to lower operating expenses in 2026 to $16 billion from $17 billion in 2025. Operating expenses in 2025 were previously projected to be $17.5 billion. The company didn't disclose a headcount figure for layoffs.

Intel reported a first quarter loss of 19 cents a share on revenue of $12.7 billion, flat with a year ago. Non-GAAP earnings were 13 cents a share. Intel was expected first quarter earnings of a penny a share on revenue of $12.3 billion.

As for the outlook, Intel projected second quarter revenue of $11.2 billion to $12.4 billion with break even non-GAAP earnings. It's possible that demand was pulled forward in the first quarter due to tariff concerns.

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Tan said there are no quick fixes for Intel.

"The first quarter was a step in the right direction, but there are no quick fixes as we work to get back on a path to gaining market share and driving sustainable growth. I am taking swift actions to drive better execution and operational efficiency while empowering our engineers to create great products. We are going back to basics by listening to our customers and making the changes needed to build the new Intel."

CFO David Zinsner said that the "current macro environment is creating elevated uncertainty across the industry, which is reflected in our outlook."

By the numbers:

• Intel's client computing group had revenue of $7.6 billion, down 8% from a year ago.
• Data center and AI revenue was $4.1 billion, up 8% from a year ago.
• Intel Foundry revenue was $4.7 billion, up 7% from a year ago.

Intel's AI strategy is emerging and Tan said the company will be focused on multiple workloads with a hefty dose of edge use cases. Stay tuned for the plan. Here's what Tan said on Intel's conference call:

• "There are many areas we need to improve, and there's no quick fixes. We must remain laser focused on execution," said Tan. "We need to fundamentally transform our culture and the way in which we operate. Organizational complexity and bureaucracies have been suffocating the innovation and agility we need to win. It takes too long for decisions to get made. New ideas and people who generate them have not been given the room or resources to incubate and grow. The unnecessary silos have led to bad execution."
• "We continue to identify ways to operate our manufacturing network more efficiently, I have directed our teams to find additional $2 billion of savings in our growth CapEx, taking our target for this year to $18 billion. We will continue to take closer look at our existing factory footprint to ensure that we are making the most efficient use of our in-store capacity before committing to any additional spending," said Tan.
• "We are taking a holistic approach to redefine our portfolio to optimize our products for new and emerging AI workloads. We are making necessary adjustments to our product roadmap, so that we are positioned to make the best-in-class products while staying laser focused on execution and ensuring on time delivery," he said.
• "Success in foundry business requires more than process technology manufacturing capabilities alone. It is first and foremost a customer service business, built on foundational principle of trust. And we need to instill customer service mindset across our foundry business," said Tan.

Holger Mueller, an analyst at Constellation Research, said:

"Intel does not manage to catch a break – though the management team has been able to deliver to guidance, which in itself is an achievement. New CEO Lip-Bu Tan is taking a page from the classic acceleration playbook – cut layers and elevate the value creators (for Intel its R&D, avoid unnecessary meetings, change OKRs, and also ask everybody to be in the office for 4 days a week). But the problem remains that Intel’s Client Computing Group keeps shrinking, and the growth of its Data Center and AI group cannot make up for it as it operates at a smaller base. Intel needs new growth and Tan needs to find it."

Alphabet allays Q1 worries over Google ads, Google Cloud revenue up 28%

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

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Alphabet handily topped first quarter estimates as Google's advertising business held up well and Google Cloud revenue checked in at $12.26 billion.

The company reported first quarter net income of $34.54 billion, or $2.81 a share, on revenue of $90.23 billion, up 12% from a year ago. Wall Street was looking for first quarter earnings of $2.01 a share on revenue of $89.17 billion.

Sentiment headed into Alphabet's results was weak due to worries about advertising amid economic uncertainty. Here's the breakdown by unit.

• Google search and other revenue was $50.7 billion.
• YouTube ad revenue in the first quarter was $8.93 billion, up from $8.09 billion a year ago.
• Google Cloud revenue was $12.26 billion, up 28% from $9.58 billion a year ago, with operating income of $2.18 billion.

CEO Sundar Pichai said the quarter was solid with promise in Google's AI efforts. He said search AI overviews had 1.5 billion users per month. YouTube and Google One led subscription revenue as the company topped 270 million paid subscriptions in the first quarter.

Google Cloud Next coverage:

• 9 Google Cloud customers on AI implementations, best practices
• Google Cloud Next 25: BigQuery Becomes the Brain of Enterprise AI
• Google Cloud CEO Kurian on agentic AI, DeepSeek, solving big problems
• Google Cloud Next 2025: Agentic AI, Ironwood, customers and everything you need to know
• Google Cloud CTO Grannis on the confluence of scale, multimodal AI, agents
• Lloyds Banking Group bets on Google Cloud for AI-driven transformation
• Healthcare leaders eye agentic AI as next frontier for clinicians, patients
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• Lowe's eyes AI agents as home improvement companion for customers

Other items in Alphabet's report:

• Capital expenditures in the first quarter were $17.2 billion, up 43% from a year ago.
• Alphabet had trailing 12-month cash flow of $74.88 billion.
• The company ended the quarter with 185,719 employees, up from 180,895 from a year ago.

Items from the conference call:

• Pichai said Google Cloud is offering the widest range of TPUs and GPUs and will "continue to invest in next generation capabilities."
• All 15 of products with more than half a billion users are using Gemini models. 
• Circle to search usage was up 40% in the first quarter compared to a year ago. Monthly Lens visual searches are up by 5 billion since Octover. 
• Philipp Schindler, chief business officer of Google, said YouTube's revenue growth was driven by direct response over brand ads. 
• Schindler said AI overview monetization is similar to traditional search results. 
• Anat Ashkenazi, CFO, said search gains was "once again broad based across verticals led by financial services, due primarily to strengthen insurance followed by retail."
• Ashkenazi said growth in Google Cloud was across core and AI services. Workspace revenue was driven by increasing average revenue per seat. Google Cloud operating income was driven by improvements in productivity, efficiency and utilization. 

Ashkenazi said that Google Cloud capacity remains constrained. 
"In cloud, we're in a tight demand supply environment, and given that revenues are tied to the timing of deployment of new capacity, we could see variability in cloud revenue growth rates depending on capacity deployment. Each quarter we expect relatively higher capacity deployment towards the end of 2025."
 

Constellation Research analyst Holger Mueller said:

"Alphabet had a good quarter showing strong ad revenue. Overall Alphabet grew and became more profitable.  Google Cloud did well in the sense of growing 28% YoY now clearly being in the double digit billions of dollars in revenue. Google announced substantial AI innovations at Google Cloud Next, which reaffirms its leadership in AI, with a lead of 3-4 years over the cloud competitors. Now it only has to make sure that CxOs notice and bring in Google Cloud workloads. On the regulatory side, it remains a cliff hanger with Alphabet and its Department of Justice trial. But in the case of splitting up the company, it may bring more focus to the separate entities, so there's nothing investor should worry about – at least from what we know today."

ServiceNow makes its CRM ambitions crystal clear

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

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ServiceNow is hellbent on being a big CRM player, relegating established giants like Salesforce to the legacy infrastructure bin and running its platform playbook repeatedly.

For those of us watching ServiceNow closely, CEO Bill McDermott's CRM play isn't that surprising. After all, ServiceNow has dabbled in CRM workflows for years, but the recent acquisitions of Moveworks and Logik.ai telegraph the move.

• ServiceNow acquires Moveworks for $2.85 billion as it eyes CRM for agentic AI expansion
• Martin Schneider: ServiceNow’s Moveworks pickup and Agentic AI Push Solidify CRM Aspirations
• ServiceNow acquires Logik.ai, as it steps up CRM efforts
• Liz Miller: ServiceNow’s Logik.ai Pick Up Signals CPQ’s Shift to Experience
• ServiceNow acquires Cuein, aims to create AI agent feedback loop
• ServiceNow Yokohama release ups AI agent game

And if you needed more evidence that ServiceNow sees itself as a CRM disruptor consider this: On a strong first quarter earnings call, the acronym "CRM" was mentioned 35 times. Geopolitical and some flavor of economy was mentioned 10 times. Pro Plus, ServiceNow's AI agent tier, was noted 16 times. AI agents were mentioned 11 times. How's that for priorities?

McDermott noted that ServiceNow CRM and industry workflows are "already ServiceNow's fastest growing business." He added that Logik.ai will be used to drive AI powered selling.

"This will be a natural step forward in ServiceNow CRM strategy, building on our core strengths of connecting functional teams and powering simple, efficient workflows.

Configure, price, quote, sell, fulfill, service on one fully integrated architecture with native built AI agents to take automation to the next level. There's not a day that passes when we don't hear from customers who are dissatisfied with their status quo. For a long time, I've been saying no one has to lose for us to win. Our customers have now adjusted me. They want someone else to lose, so they can continue to invest more in ServiceNow."

The numbers are highlighting ServiceNow momentum and it’s very clear that the company sees itself on a collision course with Salesforce, which is unifying its platform with Agentforce. ServiceNow has plenty of room to run in CRM as it expands its total addressable market. CRM and industry workflows were in 16 of the company's top 20 deals and nine of them had more than $1 million in ACV.

McDermott was asked about ServiceNow's CRM strategy since it doesn't sound like the company is going to be satisfied being a connector of workflows. In fact, ServiceNow is getting closer to the core system of record.

Note the nuance from McDermott:

"We regard the CRM system of record as an important data source. It's fine. But you're right. Our ambitions supersede a database. We believe strongly that our massive capabilities have emboldened us to go after a CRM in a differentiated way. And for one example, when you just talk about sales and order management and that solution, we're just super excited about how we're going to reimagine it. If you talk to a high-tech manufacturer today and they have to put together a supercomputer, the complexity of configuring it, pricing and quoting it could be days. So anything that's complicated, we're going to do in minutes or seconds. And we're delivering a fully integrated AI powered front office. That's going to connect sales and service, streamline operations and dramatically improve time to revenue."

McDermott said enterprises want to get away from "the fragmented legacy CRM stacks" and want a unified platform to take advantage of AI and AI agents. "It would be super tactical to add an agent to one instance of a disconnected CRM system from all the other processes I just mentioned. So we're going to make CRM faster. We're going to make it smarter and it's going to be purpose-built for modern business," said McDermott.

ServiceNow's Amit Zavery also noted that customers are having a difficult time modernizing workflows with AI with legacy systems. It's about process reinvention for CPQ, sales order management and customer service as much as CRM.

Indeed, McDermott said he was talking to one company that had 175 different instances of a CRM system and looking at ServiceNow to consolidate them.

The other takeaway is that ServiceNow leaders see their platform as deflationary to the broader enterprise software space. "No one says I'm going to use my ERP to cut across all systems and drive productivity. And that same goes for a CRM standalone or an HCM standalone. But they do say that about ServiceNow," said McDermott. "We put it all together in an enterprise grade AI workflow. So now you're taking advantage of AI, you're taking advantage of the data, and you're taking advantage of integrating processes at mass scale to get big business outcomes. It just so happens that CRM is one that we intend to be the leader in."

IBM maintains Q2 outlook, reports better-than-expected Q1

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

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IBM reported better-than-expected first quarter results and maintained its outlook in what CEO Arvind Krishna called a "fluid" macroeconomic environment.

Big Blue also said that its generative AI book of business is now more than $6 billion to date and up more than $1 billion in the quarter.

IBM reported first quarter earnings per share of $1.12 a share on revenue of $14.5 billion, up 1% from a year ago. Non-GAAP earnings were $1.60 a share.

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Wall Street was expecting IBM to report first quarter earnings of $1.40 a share on revenue of $14.4 billion. Krishna said:

"We remain bullish on the long-term growth opportunities for technology and the global economy. While the macroeconomic environment is fluid, based on what we know today, we are maintaining our full-year expectations for revenue growth and free cash flow."

• Software revenue of $6.3 billion was up 7% in the first quarter compared to a year ago. Growth was led by Red Hat with first quarter growth of 12% and automation, up 14%.
• Consulting revenue in the first quarter was $5.1 billion, down 2% from a year ago.
• Infrastructure revenue was $2.9 billion in the quarter, down 6%.

As for the outlook, IBM projected 2025 revenue growth of at least 5%. Second quarter revenue will be between $16.4 billion and $16.75 billion.

Krishna said:

"Technology remains a key competitive advantage allowing businesses to drive cost efficiencies, productivity and preserve the balance sheets. In the near term, uncertainty may cause clients to pause and take a wait and see approach. However, the value of hybrid cloud automation, data sovereignty and on premise solutions becomes even more critical in volatile windows. Recent conversations that I've had with clients reflect this view of the current environment."

He also touted AI's role. 

"The AI portfolio we have built is designed to give clients a comprehensive set of tools to deploy AI within their enterprise. AI agents will accelerate the ability of many enterprises to turn the promise of generative AI into real value. Consulting is helping clients design and deploy AI strategies and use cases." 

Other items from the call:

• Krishna said infrastructure is playing a bigger role with the new z17 mainframe and first installment of IBM Quantum System Two in Spain.
• CFO James Kavanaugh said IBM is leveraging AI to improve its own productivity. "We remain laser focused on accelerating our productivity initiatives. We are transforming our enterprise operation, leveraging technology and embedding AI across more than 70 workflows, such as HR IT support, procurement, finance, quote to cash and more," he said. 
• IBM has decreased its vendor spend by more than $1 billion by optimizing supply chain and service delivery and right-sizing infrastructure. 
• IBM has little tariff exposure in the US as goods imported outside of the US represent less than 5% of the overall spend. 

ServiceNow eases worries with strong Q1 earnings, Q2 outlook

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

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ServiceNow's first quarter should alleviate a bevy of emerging concerns in enterprise technology. The company landed multiple Pro Plus AI deals in the quarter and grew its US public sector business by more than 30% amid macroeconomic uncertainty.

For the first quarter, ServiceNow reported earnings of $460 million, or $2.20 a share, on revenue of $3.088 billion. Non-GAAP earnings in the first quarter were $4.04 a share.

Wall Street was looking for earnings of $3.94 a share on revenue of $3.09 billion.

The company has expanded more into CRM and revamped its business model so AI agents are activated on its platform and enterprises pay by consumption. ServiceNow's ground game is also strong as the company shined in manufacturing and healthcare and life sciences.

• ServiceNow acquires Logik.ai, as it steps up CRM efforts
• ServiceNow acquires Moveworks for $2.85 billion as it eyes CRM for agentic AI expansion
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In addition, ServiceNow outlined new partnerships along with its results. ServiceNow said it has partnered with Aptiv to provide edge device intelligence across multiple industries. ServiceNow also said it will launch an AI service management suite with Vodafone Business. The company also said it will partner with Devoteam in a bid to land CRM projects in Europe and the Middle East.

CEO Bill McDermott said the company is driving value for customers and playing a big role in transformation projects. CFO Gina Mastantuono said ServiceNow is driving efficiencies via AI and reducing costs. ServiceNow ended the first quarter with 508 customers with annual contract values topping $5 million.

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As for the second quarter outlook, ServiceNow said it was benefiting from a weaker US dollar and it exceeded the high end of its subscription revenue guidance. Nevertheless, it said it “only flowing through part of those benefits” in its outlook to account for economic uncertainty. ServiceNow projected subscription revenue of $3.03 billion to $3.035 billion, up 19% to 19.5%. For 2025, ServiceNow is projecting revenue between $12.64 billion and $12.68 billion, up 18.5% to 19%.

On a conference call, McDermott said:

"While it's true there are some unknowns out there, this is far from the first macro disruption we have encountered. You don't build a defining company by surrendering to uncertainty. You do it by seeing challenges as opportunities. We have zero interest in anything less than outperforming."

He added that customers are focused on taking out costs, modernizing tech stacks and leveraging AI. McDermott also talked up ServiceNow's US government business.

CFO Mastantuono said: "We went through a very rigorous analysis of our business and its exposure to areas that could potentially be impacted by the current geopolitical. Federal is a piece of it and enterprise, of course. What I'll tell you is that demand remains strong. The customers we're talking to are absolutely focused on the future and growth in and cost out. ServiceNow platform remains a deflationary tool that customers are leaning into in times of uncertainty."

Constellation Research analyst Holger Mueller said ServiceNow put up a strong quarter. He said:

"ServiceNow breaks two key milestones, $10 billion projected revenue for the fiscal year and $3 billion in revenue for the quarter. For the longest time it was not clear where future growth will come from, but Bill McDermott and team have expanded their total addressable market going into CRM and HCM. Both markets make sense as they are characterized by unstructured processes and fragmented automation islands. But next quarter will show as ServiceNow is making new enemies."  

Other key items:

• "CRM and industry workflows continued its momentum in 16 of our top 20 deals, with nine deals that were over a million core business workflow," said McDermott. 
• McDermott said it is expanding its addressable market with CRM and supply chain. "There's not a day that passes when we don't hear from customers who are dissatisfied with the status quo," said McDermott. 
• ServiceNow said RaptorDB, the company's next-gen database, saw annual contract value sequential gains and had five deals worth more than $1 million.  

The company noted that Paul Smith is resigning as the company’s president of global customer and field operations. He is succeeded by Paul Fipps.

Nvidia NeMo Microservices generally available, aims for AI agent data flywheel

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

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Nvidia said its NeMo Microservices are generally available as it aims to enable developers to leverage a "data flywheel" that enables enterprises to scale AI agents.

The general availability of Nvidia NeMo Microservices is a follow-up to GTC 2025 announcements. The idea of the NeMo Microservices portfolio is to automate and scale what Nvidia refers to as AI teammates.

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The components of NeMo Microservices, which will integrate with Nvidia's Triton Inference Server, include:

• NeMo Curator for data processing.
• NeMo Customizer for model customization.
• NeMo Evaluator to pick and evaluate models.
• NeMo Guardrails for protection.
• NeMo Retriever for information retrieval.
• Llama Nemotron, a reasoning large language model.

These components each have a role in taking enterprise data and creating the flywheel to leverage agents. Nvidia's NeMo Microservices are going live with a host of integrators and key enterprise vendors such as SAP and ServiceNow backing them.

NeMo Microservices will be available in Nvidia AI Enterprise, include hybrid cloud deployments and work with multiple models and AI software frameworks. Each microservice operates in its own container and Nvidia said there will be a lot more on deck focused on orchestration and adding components.

In a briefing, Nvidia outlined the following use cases:

• Amdocs is using telecom genAI agents for a 64% improvement in average handling time with half of calls being resolved on the first call. Amdocs deployments used NeMo Microservices to create agents for billing, sales and network to analyze logs.
• ServiceNow AI agents across HR, IT and customer support are freeing up 3 million hours of human capacity.
• Yum is using the Nvidia microservices stack to expand voice AI order taking to 500 restaurants.
• Accenture, AT&T and Cisco all cited use cases in research, call center agents and software development.

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Microsoft: Human, AI agent ratios will be critical to success as new roles emerge

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

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As enterprises adopt AI agents and digital workers, companies' success may depend on the human-agent ratio and how workflows are managed.

Microsoft released its annual Work Trend Index report, which surveyed 31,000 people across 31 countries and including LinkedIn labor and hiring trends. The report argues that Frontier Firms are emerging that are utilizing digital workers via agentic AI.

According to Microsoft, in the next two to five years most enterprises will be on the way to being a Frontier Firm. Findings of the report include:

• 82% of leaders say they'll use digital labor to expand in the next 12- to 18-months.
• 53% of leaders say productivity has to increase, but 80% of the global workforce said they are strapped for time and energy. Microsoft said its telemetry from Microsoft 365 applications show that employees are interrupted every two minutes by meetings, emails or pings.
• 46% of leaders say their companies are using agents to fully automate workflows and processes.
• 33% of leaders are considering using AI to reduce headcount.

The Microsoft report included new updates for Microsoft 365 Copilot including search, IT governance tools, notebooks and memory and personalization. Microsoft's general theme is that enterprises will be able to procure intelligence on-demand with digital labor.

Research: The Future of Agentic AI: Get Ready to Build Your Own Agents With Ease | Exponential Efficiency in the Age of AI | AI Trends for 2025 and Beyond | 2025 Employee Experience Trends

What caught my eye in the report is how enterprises on the frontier of agentic AI will have to create new roles and upend traditional org charts. After all, where humans sit in the workflow will be critical to success. Some of those roles that are emerging include:

• AI data specialist.
• AI ROI analyst.
• AI business process consultant.

In addition, org charts may be replaced by models where teams form around jobs instead of functions powered by agents and humans. But mixing and matching humans and AI agents will be as much art as science. Roles may blend HR and IT as enterprises try to blend human and digital labor.

Indeed, 28% of managers are considering hiring AI workforce managers to lead hybrid teams of people and agents.

Microsoft noted in its report:

“As agents increasingly join the workforce, we’ll see the rise of the agent boss: someone who builds, delegates to, and manages agents to amplify their impact—working smarter, scaling faster, and taking control of their career in the age of AI. From the boardroom to the front line, every worker will need to think like the CEO of an agent-powered startup, directing teams of agents with specialized skills like research and data analysis. For those ready to expand their scope, it will be a career accelerator—but the data shows that leaders are ahead of employees. Bridging the gap will take more than access; it will require training, oversight, and a new way of working—one that leaders must help shape.”

• BT150 zeitgeist: Agentic AI has to be more than an 'API wearing an agent t-shirt'
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• AI agents bring consumption models to SaaS: Goldilocks or headache?
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• Agentic AI without process optimization, orchestration will flop

SAP Q1 solid amid uncertainty

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

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SAP in the first quarter delivered cloud revenue growth of 27% from a year ago with total revenue growth of 12%.

The company reported first quarter earnings of €1.796 billion, or €1.52 a share, on revenue of €9.01 billion. Cloud revenue was €4.99 billion, up 27% from a year ago. Cloud ERP revenue was €4.25 billion, up 34% from a year ago.

CEO Christian Klein said the first quarter results show that its "success formula is working." Current cloud backlog was up 29% at constant currencies. CFO Dominik Asam said the first quarter was "a solid start to the year in a highly volatile environment."

SAP maintained its 2025 outlook, but Asam noted that the company remains "mindful of the broader environment and are approaching the rest of the year with vigilance, continuing to safeguard both profit and cash flow."

The enterprise software giant added that it is adding customers to its RISE with SAP program including Hyundai and Kia, Mazda, Molson Coors and Tyson Foods to name a few. The company recently outlined the SAP Business Cloud via a partnership with Databricks and a stack designed for agentic AI.

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"No one can really predict how the global economy will develop throughout 2025 without any doubt, uncertainty in the market remains high," said Klein, who said SAP's business model is resilient and the pipeline looks strong. "Our globalization team localizes SAP portfolio, including solutions like global trade services management that enables our customers to manage every single global transaction in real time steer their companies in uncertain times. Our customers can run real time financial simulations based on internal and external data."

Other items from the call:

• Klein said Sapphire will include deep dives into agents and core areas as well as "the next chapters of the SAP growth story."
• SAP customers are building use cases around supply chain, productivity and AI and processes such as order-to-cash. Those use cases haven't diminished amid geopolitical risks, said Klein. 
• The promise of the SAP Business Cloud partnership with Databricks revolves around customers match SAP data with other system. "This is a real 360 that doesn't require an arm

SAP is also using its own software to highlight returns for customers.

As for the outlook, SAP projected cloud revenue at constant currency of €21.6 billion to €21.9 billion in cloud revenue, up 26% to 28%. Cloud and software revenue at constant currencies will be up 11% to 13% for 2025. SAP projected operating profit excluding items of €10.3 billion to €10.6 billion in 2025. SAP said the outlook will vary depending on currency fluctuations.

Constellation Research analyst Holger Mueller said:

"It looks like SAP is starting to pick up speed convincing its customers to move to the cloud and S/4HANA. AI has come to the rescue for SAP, with customers realizing that with AI they need to run SAP, data and automation in the cloud. The launch of the SAP Business Data Cloud should invigorate the trend. Now SAP of course has to show in Q2 that Q1 was no fluke."