SAP reported Q4 non-IFRS earnings per share of €1.62, representing a 16% year-over-year increase, while total revenues of €11.27 billion fell short of the company’s own guidance of €11.5 billion. Cloud contract backlog grew 16% to €21.1 billion, down from the 25% growth recorded in the prior year. Software license revenues declined 4% year-over-year, reflecting extended deal cycles in large transformation projects.

On January 29, SAP’s shares tumbled more than 15%, marking the steepest single-day drop since October 2020. The decline was driven by investor concerns over the slower cloud backlog growth and a cautious outlook for full-year 2026. Analysts highlighted that recent large contracts would ramp up more gradually, and termination-for-convenience clauses in certain deals weighed on Q4 backlog by approximately one percentage point.

CEO Christian Klein emphasized that SAP remains focused on integrating artificial intelligence into its business applications, arguing that AI agents require deep understanding of enterprise data to deliver value. SAP projects full-year 2026 cloud revenue growth of 23% to 25%, slightly below the 26% achieved in 2025 but within analyst consensus. CFO Dominik Asam acknowledged that geopolitical tensions are extending deal cycles for sovereign cloud solutions, but confirmed the company will continue to invest in AI-enhanced modules across its ERP and supply-chain portfolios.