SAP posts strong Q3 on cloud growth

SAP posted third quarter revenue growth of 13%, cloud revenue growth of 26% and crossed the €10 billion quarterly revenue mark for the first time.

The ERP and cloud software giant reported third quarter net profit of €2.27 billion, or €1.96 a share, on revenue of €10.3 billion. Cloud revenue in the quarter was €6.67 billion. Most of that sum was SAP's cloud ERP suite.

CEO Christian Klein said the third quarter was strong and its Joule AI efforts are gaining traction. "Our Autonomous Enterprise strategy is not just resonating, it is being adopted. Our customers are investing in the technology behind it – from the cloud and data foundation to our Business AI. They see that Joule Work makes the business case for their transformation more attractive than ever," said Klein.

Recent headlines:

• SAP highlights its autonomous enterprise, Joule agent vision, acquires TechWolf
• SAP CEO Klein: Our AI agents want to solve the complex business processes

A few items worth noting in the third quarter:

• SAP said cloud revenue growth was "positively impacted by several quarter-specific effects, mainly a multi-quarter revenue catch-up from customers returning from financial distress."
• The third quarter had a revenue bump of €49 million from the acquisitions of Reltio, Dremio and Prior Labs.
• SAP said it acquired more than 25 million shares as of Sept. 30 due to a new share repurchase program outlined in January.

As for the outlook, SAP said it expects to generate cloud revenue toward "the upper end of the outlook range of €25.8 billion to 26.2 billion at constant currencies, up 23% to 25% from a year ago at constant currencies for 2026. Cloud and software revenue for the year will be about €36.3 billion to €36.8 billion for 2026 in constant currencies.

SAP reiterated its outlook for adjusted operating profit as well as €10 billion free cash flow for 2026.