SAP Reports Strong Q2 Earnings, Cloud Shift Continues Despite Macro Uncertainty

SAP reported its second-quarter earnings and revenue, which slightly surpassed Wall Street’s expectations. The enterprise software company posted earnings of 1.50 euros per share (approximately $1.76), marking a 36% increase from the previous year. Revenue grew by 9% to 9.027 billion euros ($10.57 billion), just edging past the forecasted revenue of 9.02 billion euros. Cloud computing revenue saw a 28% rise to 5.13 billion euros, though this was slightly below the expected 5.18 billion euros. SAP’s ‘Current Cloud Backlog’ (CCB), which indicates future expected revenue from customer contracts, rose 28% to $18.05 billion, although growth slowed compared to previous quarters. Management cited macroeconomic uncertainty, particularly in sectors like U.S. public sector and manufacturing, as factors contributing to longer sales cycles. SAP also expects some deceleration in CCB growth for the second half of 2025, but remains confident in its strong pipeline. Despite these challenges, SAP reaffirmed its 2025 financial outlook and noted that its shift toward subscription-based cloud services is progressing, similar to its competitor Oracle. SAP stock saw a slight dip in early trading, falling more than 4%, but the stock has still seen a 25% rise in the U.S. this year.