SAP (SAP) Q4 2025 (Media) earnings summary

Executive summary

• Achieved and exceeded outlook for operating profit and cash flow in 2025, with robust cloud growth and record cloud backlog of €77.3 billion, up 30% at constant currencies, despite a challenging start and geopolitical tensions.

• Cloud ERP Suite and SAP Business AI adoption were key growth drivers, with AI and Business Data Cloud now core to product innovation and two-thirds of Q4 cloud order entry including AI.

• Transformation strategy, including RISE and GROW, drove significant cloud adoption and mid-market expansion.

• Announced a new €10 billion share repurchase program to be executed from February 2026 through 2027.

Financial highlights

• Total cloud backlog grew 30% to €77.3 billion; current cloud backlog up 25% to €21 billion.

• FY2025 cloud revenue rose 23% to €21.0 billion (26% at constant currencies); Cloud ERP Suite revenue up 28% to €18.1 billion (32% at constant currencies).

• Total revenue for the year approached €37 billion, up 11% at constant currencies.

• Non-IFRS cloud gross margin expanded by 1.7 percentage points to 75%.

• IFRS operating profit rose 111% to €9.83 billion; non-IFRS operating profit up 28% to €10.42 billion.

• Free cash flow for the year was €8.24 billion, at the high end of guidance.

• Non-IFRS basic EPS increased 36% to €6.15.

Outlook and guidance

• FY2026 guidance: cloud revenue €25.8–26.2 billion (+23–25% at constant currencies), cloud and software revenue €36.3–36.8 billion (+12–13%), non-IFRS operating profit €11.9–12.3 billion (+14–18%), free cash flow ~€10 billion.

• Expecting moderate deceleration in current cloud backlog growth in 2026, but less than in 2025.

• Total revenue growth projected to accelerate, with record free cash flow of approximately €10 billion anticipated.

• Operating profit growth expected to outpace revenue growth, driven by operating leverage.

• Midterm non-IFRS effective tax rate guided to 28%-30%.