SAP reported stronger-than-expected first-quarter results for 2026, with earnings per share reaching 1.66 euros against a forecast of 1.64 euros and revenue climbing to 9.56 billion euros, matching analyst expectations.
The beat was driven by a 27% currency-adjusted surge in cloud revenue to 5.96 billion euros, outpacing the Visible Alpha consensus of 5.87 billion euros, while the company’s current cloud backlog rose 25% to 21.9 billion euros, slightly below the 24.1% growth analysts had anticipated.
Operating profit on a non-IFRS basis increased 24% to 2.87 billion euros, lifting the margin to 30.0% from 27.2% a year earlier and surpassing the 28.5% expected by analysts.
SAP confirmed its full-year outlook, projecting currency-adjusted cloud revenue growth of 23% to 25% to reach 25.8 to 26.2 billion euros, though it warned that cloud revenue growth would likely slow in the second quarter after a strong start to the year.
The results surprised investors who had grown wary of SAP’s slowing momentum amid rising competition from AI-focused startups like Anthropic, whose Claude AI modules have fueled concerns that traditional enterprise software could develop into obsolete.
Yet SAP credited its recent resilience to embedded AI features in its cloud offerings, which helped stall declining growth rates in its cloud division and regain market share in the competitive tech landscape.
SAP CEO Christian Klein cited a solid start to the year despite an uncertain business environment, noting that past periods of geopolitical tension had seen customers double down on SAP products to strengthen operational resilience.
The stock reacted sharply, jumping 4.68% in XETRA trading to close at 147.28 euros, reversing its status as the weakest performer in the DAX index year-to-date.
Still, SAP remains down roughly one-third from its peak valuation, reflecting persistent skepticism about its ability to sustain growth amid structural shifts in enterprise technology.
How SAP’s AI integration is reshaping investor confidence
The company’s ability to leverage AI not as a threat but as an enhancement to its core software suite has begun to ease fears that legacy ERP systems are headed for irrelevance, particularly as clients seek integrated, secure platforms amid volatility.
Why the cloud backlog matters more than quarterly revenue beats
While quarterly cloud revenue surpassed estimates, the backlog figure offers a clearer view of SAP’s ability to lock in future revenue, making it a critical metric for judging the durability of its cloud transition beyond short-term fluctuations.
What the DAX’s weakest stock rebound reveals about market sentiment
The sharp intraday rebound in SAP’s share price indicates that even deeply discounted tech stocks can experience rapid reassessment when fundamentals exceed low expectations, especially in sectors undergoing technological transition.
Did SAP’s AI features directly contribute to the quarter’s financial performance?
Yes, SAP stated that its strong results were achieved “thanks to the AI functions in its programs,” which helped halt declining cloud growth rates and win back market share against competitors.
Is SAP expecting cloud growth to accelerate or decelerate through 2026?
SAP forecasts cloud revenue growth of 23% to 25% for the full year but expects the pace to slow in the second quarter after a strong start, with the backlog increase likely to trail the prior year’s 25% growth rate.
