SAP reported that its current cloud backlog rose 16% in Q4 to €21.1 billion, a deceleration from the 25% constant-currency growth achieved in full year 2025. The company attributed approximately one percentage point of the slowdown to extended deal cycles for large transformational contracts and statutory termination-for-convenience clauses. For the full year, total cloud backlog reached a record €77.3 billion, up 22% year-on-year (30% at constant currencies), setting a solid foundation but signaling a moderation in near-term contract ramp-up.

In Q4, SAP’s cloud revenue grew 19% to €5.61 billion (26% at constant currencies), driven by a 30% jump in Cloud ERP Suite revenue. Non-IFRS operating profit rose 16% to €2.83 billion, margin expanding by 320 basis points to 29.2%. Earnings per share on a non-IFRS basis increased 16% to €1.62. For full year 2025, total revenue reached €36.8 billion (11% growth at constant currencies), with cloud revenue up 23% (€21.0 billion) and Non-IFRS operating profit hitting €10.66 billion (31% growth at constant currencies). Free cash flow nearly doubled to €8.24 billion, reflecting disciplined cost control and strong cash conversion.

Following the earnings release, SAP shares tumbled more than 16% in one day—the steepest drop since late 2020—after management guided to 23–25% cloud revenue growth for 2026 versus 26% achieved last year. Investors reacted to the projected slight deceleration in cloud backlog growth, with market commentators noting the broader software sector sell-off driven by AI disruption concerns. CFO Dominik Asam conceded that backlog growth had slowed 'more sharply than anticipated,' attributing it to prolonged negotiation cycles for sovereign cloud and digital transformation deals.

CEO Christian Klein emphasized SAP’s focus on embedding AI into its business applications, arguing that proprietary business data and process integration will differentiate SAP in the AI era. The company highlighted that two-thirds of Q4 cloud order entry included SAP Business AI capabilities. Concurrently, SAP announced a new two-year share buyback program of up to €10 billion, underscoring management’s confidence in long-term value creation and signaling a commitment to return excess cash to shareholders.