Observed Signal · Jul 24, 2026 · Earnings Report · Source: Manager Magazin · Impact: 4/5 · Sentiment: Neutral
SAP Boosts Cloud Revenue; Stock Jumps
SAP reported stronger cloud contract momentum: expected subscription revenue for the next 12 months rose 27% year‑on‑year to €22.9 billion as of end‑June. Quarterly cloud revenue increased 22%, total revenue was €9.88 billion (+9%) and net profit rose to €2.21 billion (about +25%). Management linked the backlog strength to AI-related product initiatives and the SAP Autonomous Suite / SAP Business AI Platform. SAP completed the acquisitions of Dremio and Prior Labs in July; the company said those deals and higher marketing and AI‑usage costs will weigh on margins and led it to lower its adjusted EBIT growth guidance to 13–17% (from 14–18%). Shares gained about 5% after the results.
SAP is a major enterprise software vendor; strong cloud and AI‑related order backlog, completed data/AI acquisitions (Dremio, Prior Labs) and guidance changes materially affect enterprise cloud, data and AI markets and can influence MarTech/Cloud vendor strategies.
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Key Takeaways & Evidence Grounding
- SAP said expected revenue from subscription contracts for the next 12 months rose 27% year‑on‑year to €22.9 billion as of end‑June.
- Cloud revenue grew 22% year‑on‑year; total quarterly revenue was €9.88 billion (+9%) and net profit €2.21 billion (+~25%).
- SAP completed acquisitions of Dremio and Prior Labs in July; management expects those units to generate losses in H2 and they contributed to a lower EBIT outlook.
- SAP lowered its adjusted EBIT (currency‑adjusted) growth guidance to 13–17% for the year (previously 14–18%), citing acquisitions and higher marketing/AI costs.
- Management attributed the stronger short‑term cloud backlog to AI product initiatives (SAP Autonomous Suite and SAP Business AI Platform); the stock rose roughly 5% after the announcement.
Connected Companies & Entities
3 Entities mapped“SAP said expected revenue from subscription contracts for the next 12 months rose 27% year‑on‑year to €22.9 billion as of the end of June....”
“For analyst Charles Brennan of the US investment bank Jefferies, the development of the contract backlog was the clear highlight of the resu...”
“Toby Ogg of JPMorgan described the margin development as a negative surprise....”
Ontology Mapping & Concepts
Related Market Signals & Shifts
Recent verified developments and strategic activity across this market segment.
SAP Stock Slides 30% on AI Fears Ahead of Q1
SAP shares continued to fall ahead of the company's first-quarter results, trading down more than 3% to around €145 at the DAX close and off roughly 30% year-to-date. Investors are worried that generative AI could displace traditional enterprise software demand even as SAP plans to embed AI across its products. CEO Christian Klein has warned of “short-term pain” from AI and said the company may shift toward more usage-based billing; management expects cost savings from AI of about €2 billion per year by 2028. SAP projects currency-adjusted adjusted EBIT growth of 14–18%, cloud revenue growth of 23–25% and product revenue up 12–13% (ex-consulting). The firm aims for roughly €10 billion free cash flow this year and up to €10 billion of share buybacks over two years.
Oracle Soars 10% After Strong Earnings and Cloud Growth
Oracle reported fiscal third-quarter results that beat Wall Street expectations and raised fiscal 2027 revenue guidance, driving shares up as much as 10% in extended trading. Adjusted EPS was $1.79 versus $1.70 expected and revenue was $17.19 billion versus $16.91 billion expected. Oracle's total cloud revenue reached $8.9 billion, up 44% year over year, with cloud infrastructure revenue of $4.9 billion (up 84%). Management raised fiscal 2027 revenue guidance to $90 billion and said remaining performance obligations more than quadrupled to $553 billion. The company plans to raise $45–50 billion to expand cloud infrastructure capacity and expects over 10 gigawatts of computing power coming online over three years. The report noted large AI-related contracts and highlighted negative free cash flow and earlier share declines amid AI buildout concerns.
SAP CEO Sees Historic Growth Opportunity with AI Products
SAP CEO Christian Klein sees a historic growth opportunity for the company through its new AI products, which are centered around AI agents and an autonomous enterprise platform. Klein emphasizes SAP's unique advantage in enterprise software, industry knowledge, and data, allowing it to differentiate from generic large language models. The company introduced a unified AI platform at a customer conference in May, aiming to optimize business processes, embed AI agents in workflows, and drive cost savings. Klein believes AI in the enterprise is on the verge of a breakthrough and that SAP agents will deliver superior results, but he stresses that humans will always retain responsibility in critical business areas. In 2025, SAP's revenue rose 8% to €36.8 billion, with a net profit of €7.5 billion.
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