SAP reported fourth-quarter non-IFRS earnings per share of €1.62, up 16% year-on-year, propelled by 19% growth in cloud revenue to €5.61 billion (26% at constant currencies). Cloud ERP Suite revenue climbed 23% to €4.86 billion (30% cc), while total cloud backlog reached €21.05 billion, growing 16% (25% cc). IFRS operating profit increased 27% to €2.55 billion, lifting the IFRS operating margin by 4.9 points to 26.4%, and free cash flow swung to positive €1.03 billion from negative €0.91 billion a year earlier.

Despite robust earnings, SAP’s shares fell nearly 17% in early trading as current cloud backlog growth missed the 26% target, rising only 16%. CEO Christian Klein attributed the shortfall to longer deal cycles for large transformational contracts and legal termination clauses, which together shaved approximately one percentage point off constant-currency backlog growth. This marked the steepest daily decline since October 2020 and left the stock trading at its lowest level since mid-2024.

For fiscal 2026, SAP guided to cloud revenue growth in the low-to-mid-20% range at constant currencies, below some analyst forecasts for a return to high-20s expansion. Non-IFRS operating profit is expected to advance roughly 15% at constant currencies, reflecting ongoing investments in AI and R&D. Investors have grown wary as the company balances margin preservation with aggressive AI integration—two-thirds of Q4 cloud orders included SAP Business AI.

To bolster shareholder returns, SAP announced a new two-year share repurchase program totaling up to €10 billion. The program follows €6 billion repurchased in 2025 and underscores confidence in cash-flow generation, with full-year free cash flow of €8.24 billion (up 95% year-on-year). SAP’s long-term roadmap emphasizes AI-driven process automation, ecosystem partnerships and expansion of sovereign cloud solutions to address geopolitical requirements.