SAP Q4 Results: Backlog Timing Clouds Growth
SAP Q4 Results showed SAP SE met FY2025 revenue on robust cloud demand, but current-cloud backlog timing could temper 2026 cloud guidance and flows.
KEY TAKEAWAYS
- Cloud revenue rose 26% at constant currencies to €21.02 billion, lifting total cloud backlog.
- Management said large transformational deals trimmed current-cloud backlog growth by roughly one percentage point.
- Company announced a two-year share repurchase program up to €10 billion, funded by strong profit and cash flow.
HIGH POTENTIAL TRADES SENT DIRECTLY TO YOUR INBOX
Add your email to receive our free daily newsletter. No spam, unsubscribe anytime.
SAP SE said in a press release on Jan. 29, 2026, that it met its FY2025 revenue outlook amid strong cloud demand but warned that current cloud backlog growth would slightly decelerate and issued cautious 2026 cloud guidance.
Cloud Growth and Backlog Trends
For the year ended Dec. 31, 2025, SAP’s cloud revenue rose 26% at constant currencies to €21.02 billion. The Cloud ERP Suite contributed €18.12 billion, growing 32% at constant currencies. Total cloud backlog reached €77.29 billion, up 30% at constant currencies.
The current cloud backlog for Q4 2025 was €21.05 billion, up 25% at constant currencies. Management said large transformational deals with high revenue ramps in outer years and termination-for-convenience clauses required by law reduced current cloud backlog growth by about one percentage point in the quarter.
Buyback and 2026 Outlook
SAP’s total revenue for FY2025 was €36.8 billion, up 11% at constant currencies. The company reported a non-IFRS operating profit of €10.42 billion and free cash flow of €8.24 billion. More predictable revenue accounted for 86% of total revenue, increasing three percentage points from 2024.
The company announced a two-year share repurchase program of up to €10 billion. Chief Financial Officer Dominik Asam said, "We closed 2025 on a high note, delivering strong operating profit and free cash flow ahead of our expectations."
For 2026, SAP guided cloud revenue to €25.8–26.2 billion, implying 23–25% growth at constant currencies. It forecast cloud-and-software revenue of €36.3–36.8 billion and non-IFRS operating profit of €11.9–12.3 billion, with free cash flow around €10 billion. The company expects current cloud backlog growth to slightly decelerate. It noted an eight-percentage-point currency headwind in Q1 and about a three-point headwind for the full year. Through 2027, management anticipates accelerating total revenue growth, operating expenses rising at about 80–90% of revenue growth, and faster declines in software-support revenue as customers shift to cloud.
SAP reported discrete profit impacts in FY2025 from litigation and restructuring. Teradata-related litigation reduced IFRS operating profit by about €0.2 billion, workforce-transformation costs trimmed non-IFRS operating profit by roughly €0.1 billion, and a tax-litigation case-law change lowered profit by about €0.1 billion.
