On January 29, SAP shares fell between 15% and 17%, marking the steepest one-day decline since October 2020. The sell-off followed a Financial Times report that SAP’s cloud contract backlog growth would decelerate to between 23% and 25% in 2026, down from 25% in 2025. This guidance fell short of investor expectations and drove the stock to its lowest level in almost two years.

SAP reported non-IFRS Q4 earnings per share of €1.62, up 16% year-over-year, but missed analyst consensus of €1.76. Total revenue rose year-over-year to €11.27 billion, slightly below the €11.46 billion consensus. While EPS growth was driven by higher software-as-a-service margins and cost discipline, the revenue shortfall highlighted pressure on subscription sales and professional services.

During the earnings call, CFO Dominik Asam conceded that the deceleration in cloud backlog was sharper than the company had anticipated. He attributed the slowdown to lengthening deal cycles for large digital-transformation contracts and increased demand for sovereign-cloud solutions amid regulatory scrutiny in key markets. Asam revised full-year cloud-revenue growth guidance to 23%–25%, down from 26% in 2025, and warned of continued pressure on new contract signings in H1 2026.

CEO Christian Klein emphasized SAP’s long-term opportunity to integrate artificial intelligence into its core offerings. He pointed to recent launches of agent-based AI tools in the SAP Business Data Cloud and Retail Intelligence solutions for consumer industries. Klein argued that by embedding AI into business-process data, SAP can differentiate itself from pure-play software providers and capture a larger share of enterprise digital-transformation budgets over the next three to five years.