SAP (SAP) Q2 2026 earnings summary

Executive summary

• Q2 2026 delivered strong results, with cloud revenue up 22% year-over-year to €6.28 billion and total revenue up 9% to €9.88 billion, driven by robust cloud and software performance and major AI-driven product launches.

• Current cloud backlog reached €22.9 billion, up 27% year-over-year, reflecting strong demand for cloud solutions and the Autonomous Enterprise strategy.

• Major product launches included the Autonomous Enterprise and Joule Work, with beta programs oversubscribed and strong customer adoption.

• Key customer wins spanned industries, including Shell, Morgan Stanley, PwC, Booking.com, and others, with "RISE with SAP" and AI/data solutions seeing broad adoption.

• AI and SAP Business Data Cloud featured in over 90% of the 50 largest deals, driving confidence for H2.

Financial highlights

• Cloud revenue rose 22% year-over-year to €6.28 billion; total revenue increased 9% to €9.88 billion; cloud backlog reached €22.9 billion, up 27%.

• IFRS operating profit up 8% to €2.64 billion; non-IFRS operating profit up 7% to €2.74 billion.

• IFRS earnings per share increased 30% to €1.89; non-IFRS EPS up 6% to €1.59.

• Free cash flow for Q2 was €3 billion, up 27% year-over-year; operating cash flow was €3.15 billion.

• Cloud gross margin (non-IFRS) at 74.6%; IFRS cloud gross margin at 74.3%, down 0.5 percentage points year-over-year.

Outlook and guidance

• 2026 cloud revenue expected at €25.8–26.2 billion, up 23–25% year-over-year; cloud and software revenue at €36.3–36.8 billion, up 12–13%.

• Non-IFRS operating profit forecasted at €11.8–12.2 billion, reflecting over €100 million dilutive impact from recent acquisitions.

• Free cash flow guidance for 2026 is ~€10 billion; non-IFRS effective tax rate expected at ~29%.

• Expectation of slight deceleration in CCB growth for H2 due to macro uncertainty, especially in the Middle East.

• Outlook assumes near-term de-escalation of Middle East conflict; further escalation could materially impact results.