SAP Beats Q1 Profit Estimates on Strong Cloud Growth, Shares Jump

SAP, Europe’s largest software maker, reported a strong first-quarter performance, surpassing profit expectations on the back of robust growth in its cloud business. The company’s U.S.-listed shares rose 5.4% following the announcement, reflecting positive investor sentiment.

For the quarter ended March 31, SAP posted a 17% year-on-year increase in profit, driven largely by accelerating demand for its cloud offerings. Total revenue rose 6% to €9.56 billion ($11.17 billion), slightly exceeding analyst estimates of €9.53 billion.

Cloud revenue emerged as the key growth driver, surging 19% to €5.96 billion, ahead of the median analyst forecast of €5.88 billion. The continued shift toward cloud-based enterprise solutions underscores SAP’s strategic focus on scalable, subscription-driven business models.

Non-IFRS operating profit, which excludes one-time items, climbed to €2.87 billion from €2.46 billion in the same period last year, beating expectations of €2.71 billion.

Despite global uncertainties, SAP maintained its full-year outlook, projecting overall revenue growth alongside cloud revenue expansion of 23% to 25%. However, the company noted that these projections are contingent on the de-escalation of ongoing geopolitical tensions, particularly in the Middle East.

Chief Financial Officer Dominik Asam stated that the company remains focused on cost discipline and profitability while navigating a complex macroeconomic and geopolitical environment.

Looking ahead, SAP expects revenue growth at constant currencies in 2026 to remain in line with 2025 levels, with further acceleration anticipated in 2027. This updated outlook signals a more measured growth trajectory compared to its earlier projections of steady acceleration through 2027.

SAP’s latest results highlight the growing importance of cloud computing in enterprise technology, as organizations worldwide continue to prioritize digital transformation and operational agility.