On January 29, SAP shares plunged approximately 15%, marking the steepest one-day drop since October 2020. The sell-off was triggered by the company’s forecast that current cloud backlog growth would decelerate to around 23–25% in 2026, down from 25% in 2025. Investors reacted to the warning that recent large contracts will ramp up more slowly than anticipated, cutting short-term visibility on future cloud revenue. CEO Christian Klein emphasized the importance of executing SAP’s long-term strategy and integrating artificial intelligence into core business processes, but the cautionary backlog outlook rattled market confidence.

In the fourth quarter, SAP reported non-IFRS earnings per share of €1.62, up 16% year-over-year, while cloud revenue grew 19% to €5.61 billion (26% at constant currency). Total cloud backlog reached a record €77.3 billion, up 22% year-over-year (30% at constant currency), yet current cloud backlog rose only 16% (25% at constant currency), missing the company’s 26% target. Non-IFRS operating profit climbed 16% to €2.83 billion and non-IFRS operating margin expanded by 3.2 percentage points to 29.2%. Free cash flow for the quarter recovered to €1.03 billion from a €0.91 billion outflow a year earlier, driven by disciplined expense controls and lower restructuring payments.

For full-year 2026, SAP expects cloud revenue growth of 23–25%, slightly below the 26% achieved in 2025, reflecting lengthening deal cycles in digital transformation projects and increased demand for sovereign cloud solutions. The company reaffirmed total revenue growth of around 9–11% at constant currencies and non-IFRS operating profit expansion to approximately €10.6 billion. SAP also announced a new two-year share repurchase program of up to €10 billion, underscoring management’s confidence in cash generation and commitment to returning capital to shareholders.