SAP Reports Strong Q2 2025: Cloud Revenue Soars

• Current cloud backlog of €18.1 billion, up 22% and up 28% at constant currencies
• Cloud revenue up 24% and up 28% at constant currencies
• Cloud ERP Suite revenue up 30% and up 34% at constant currencies
• Total revenue up 9% and up 12% at constant currencies
• IFRS operating profit of €2.5 billion; non-IFRS operating profit of €2.6 billion, up 32% and up 35% at constant currencies
• Outlook 2025 unchanged

SAP achieved double-digit growth in cloud revenue during the second quarter of 2025, significantly improving its profitability. The company’s AI solutions are providing new momentum. This strong performance underscores SAP’s strategic shift towards cloud-centric operations and innovative AI integration.

Financial Performance Highlights

SAP recorded robust financial results in Q2 2025. The company’s cloud revenue increased by 24% to €5.13 billion. Overall revenue saw a 9% rise, reaching €9.03 billion. Furthermore, IFRS operating profit surged to €2.46 billion, marking a 12.5 percentage point improvement in the operating margin (27.2%). Cloud ERP Suite revenue demonstrated particularly strong growth, expanding by 30%.

Christian Klein, CEO, emphasized that “our AI innovations, such as Joule and Business Data Cloud, position SAP as a central player in the next era of enterprise operations.” Dominik Asam, CFO, attributed this growth to disciplined cost management and robust customer demand. The gross profit for cloud-backed services expanded by 26% to €3.83 billion, with the gross margin reaching 74.7%. IFRS earnings per share (EPS) jumped 91% to €1.45, while non-IFRS EPS was €1.50 (+37%). Free cash flow also increased significantly, by 83%, to €2.36 billion.

Customer Adoption and Global Expansion

New customers globally adopted SAP’s cloud-based solutions during the quarter. The “RISE with SAP” package was implemented by notable organizations including Alibaba Group, Mercedes-AMG Petronas F1 Team, GSK, and Proximus Group. Additionally, several entities, such as Biel City Administration and Iochpe-Maxion, successfully deployed the SAP S/4HANA Cloud system.

The “GROW with SAP” program, which streamlines cloud-ERP implementation, was chosen by PwC, NEBCO, and Daoudata, among others. Revenue performance was particularly strong in the APJ and EMEA regions, with the Americas also showing stable results. Brazil, France, India, and Spain reported outstanding achievements, while Germany, Japan, and the USA also concluded with solid performances. Collaborative efforts with partners also expanded. In May, SAP and Accenture formed a strategic agreement to develop enterprise intelligence for the AI era. New collaborations were also initiated with Palantir to accelerate customer migration to the cloud and with Alibaba Group to expedite cloud transitions.

Strategic Transformation and Shareholder Value

SAP’s comprehensive organizational transformation program, initiated in early 2024, concluded in Q1 2025. This program incurred a total cost of €3.2 billion, aiming for more scalable operations in the long term. The successful transformation initiatives contributed to substantial improvements in operational efficiency and a reduction in share-based compensation expenses.

Shareholders also benefited from these positive results. The company’s €5 billion share repurchase program, launched in 2023, saw the repurchase of 24.7 million shares by the end of June at an average price of €185.51 per share. Furthermore, the annual general meeting approved a dividend of €2.35 per share for the 2024 fiscal year. In May, CEO Christian Klein’s contract was extended for an additional five years, through 2030. CFO Dominik Asam’s mandate is secured until 2028.