SAP Quarterly Statement Q2 2025

Rhea-AI Summary

SAP (NYSE: SAP) reported strong Q2 2025 financial results, with significant growth in cloud business and profitability. The company's current cloud backlog reached €18.1 billion, up 22% (28% at constant currencies). Cloud revenue increased 24% to €5.13 billion, while Cloud ERP Suite revenue grew 30% to €4.42 billion.

Key financial highlights include total revenue growth of 9% to €9.03 billion, IFRS operating profit of €2.46 billion, and non-IFRS operating profit up 32% to €2.57 billion. The company maintained its 2025 outlook, expecting cloud revenue of €21.6-21.9 billion and non-IFRS operating profit of €10.3-10.6 billion at constant currencies.

SAP's share repurchase program has acquired 24.7 million shares at an average price of €185.51, totaling approximately €4.6 billion of the €5 billion program.

Positive

• Cloud backlog grew 22% to €18.05 billion (28% at constant currencies)
• Cloud revenue increased 24% to €5.13 billion (28% at constant currencies)
• Cloud ERP Suite revenue up 30% to €4.42 billion (34% at constant currencies)
• Non-IFRS operating profit increased 32% to €2.57 billion
• Free cash flow increased 83% to €2.36 billion
• Share of more predictable revenue increased by 2 percentage points to 86%
• Cloud gross margin improved by 1.8 percentage points to 74.7%

Negative

• Software licenses revenue decreased 15% to €0.19 billion
• Services revenue declined 5% to €1.06 billion
• Higher effective tax rate of 30.1% (IFRS) and 30.8% (non-IFRS) due to tax loss carryforwards
• Restructuring program expenses totaled approximately €3.2 billion

Insights

Financial Analyst

SAP delivered outstanding Q2 results with accelerating cloud growth, strong profitability gains, and maintained its positive 2025 outlook.

SAP's Q2 2025 results demonstrate exceptional momentum in its cloud business transformation. Current cloud backlog grew 22% (28% at constant currencies) to €18.1 billion, a critical forward-looking indicator showing robust demand. Cloud revenue increased 24% (28% at constant currencies) to €5.13 billion, with the strategic Cloud ERP Suite growing even faster at 30% (34% at constant currencies).

Particularly impressive is the company's profitability improvement. Non-IFRS operating profit jumped 32% to €2.57 billion, with operating margin expanding 5 percentage points to 28.5%. This demonstrates that SAP's 2024 transformation program is delivering substantial operational efficiencies while the company continues to grow.

The share of more predictable revenue increased 2 percentage points to 86%, reflecting SAP's successful transition from traditional license sales to subscription-based cloud models. This shift provides greater revenue stability and visibility. Meanwhile, free cash flow surged 83% to €2.36 billion, giving SAP ample resources to continue its €5 billion share repurchase program, of which €4.6 billion has already been executed.

Geographically, cloud revenue was particularly strong in Asia-Pacific/Japan and EMEA, with solid performance in the Americas. The customer win list includes major global enterprises across diverse industries, demonstrating broad-based demand.

SAP maintained its full-year 2025 outlook, projecting cloud revenue growth of 26-28% at constant currencies and non-IFRS operating profit growth of 26-30%. This confidence, despite acknowledged "elevated levels of uncertainty and reduced visibility" in the current environment, signals management's conviction in their business momentum.

The results validate SAP's AI strategy, with CEO Klein highlighting "AI innovations such as Joule becoming available 'everywhere and for everything' and SAP Business Data Cloud as a powerful accelerator." These AI capabilities, combined with strategic partnerships announced with Accenture, Palantir, and Alibaba Group, position SAP to capitalize on the enterprise AI transformation wave.

WALLDORF, Germany, July 22, 2025

• Current cloud backlog of €18.1 billion, up 22% and up 28% at constant currencies
• Cloud revenue up 24% and up 28% at constant currencies
• Cloud ERP Suite revenue up 30% and up 34% at constant currencies
• Total revenue up 9% and up 12% at constant currencies
• IFRS operating profit of €2.5 billion; non-IFRS operating profit of €2.6 billion, up 32% and up 35% at constant currencies
• Outlook 2025 unchanged

/PRNewswire/ -- SAP SE (NYSE: SAP) announced today its financial results for the second quarter ended June 30, 2025.

Christian Klein, CEO:
We have delivered yet another quarter of outstanding results. AI innovations such as Joule becoming available "everywhere and for everything" and SAP Business Data Cloud as a powerful accelerator of AI make our portfolio ever stronger. Enterprise operations are about to enter a new era, and SAP is best positioned to benefit from that evolution.

Dominik Asam, CFO:
We achieved a very good Q2, with accelerating total revenue growth, strong profitability and free cash flow. Our performance was supported by continued customer demand and disciplined cost control. As we move into the second half, we remain cautiously optimistic, keeping a close eye on geopolitical developments and public sector trends.

Financial Performance

Group results at a glance – Second quarter 2025

	IFRS				Non-IFRS1
€ million, unless otherwise stated	Q2 2025	Q2 2024	∆ in %		Q2 2025	Q2 2024	∆ in %	∆ in % const. curr.
SaaS/PaaS	5,045	4,018	26		5,045	4,018	26	30
Thereof Cloud ERP Suite2	4,422	3,414	30		4,422	3,414	30	34
Thereof Extension Suite3	624	604	3		624	604	3	7
IaaS4	85	135	–37		85	135	–37	–35
Cloud revenue	5,130	4,153	24		5,130	4,153	24	28
Cloud and software revenue	7,966	7,175	11		7,966	7,175	11	14
Total revenue	9,027	8,288	9		9,027	8,288	9	12
Share of more predictable revenue (in %)	86	84	2pp		86	84	2pp
Cloud gross profit	3,833	3,030	26		3,856	3,043	27	31
Gross profit	6,620	6,017	10		6,643	6,029	10	13
Operating profit (loss)	2,456	1,222	>100		2,568	1,940	32	35
Profit (loss) after tax	1,749	918	91		1,747	1,278	37
Earnings per share - Basic (in €)	1.45	0.76	91		1.50	1.10	37
Net cash flows from operating activities	2,577	1,509	71
Free cash flow					2,357	1,288	83
1 For a breakdown of the individual adjustments see table "Non-IFRS Operating Expense Adjustments by Functional Areas" in this Quarterly Statement.
2 Cloud ERP Suite references the portfolio of strategic Software-as-a-Service (SaaS) and Platform-as-a-Service (PaaS) solutions that are tightly integrated with our core ERP solutions and are included in key commercial packages, such as RISE with SAP. Further, Cloud ERP Suite also includes cloud-based capabilities enabling our customers' ERP landscapes and their cloud transformation. The following offerings contribute to Cloud ERP Suite revenue: SAP Cloud ERP, SAP Business Technology Platform, financial- and spend management, supply chain management, core solutions for human capital management, commerce, business transformation management and AI.
3 Extension Suite references SAP's remaining SaaS and PaaS solutions that supplement and extend the functional coverage of the Cloud ERP Suite.
4 Infrastructure as a service (IaaS): The major portion of IaaS comes from SAP HANA Enterprise Cloud.

 

Group results at a glance – Six months ended June 2025

	IFRS				Non-IFRS1
€ million, unless otherwise stated	Q1–Q2 2025	Q1-Q2 2024	∆ in %		Q1–Q2 2025	Q1-Q2 2024	∆ in %	∆ in % const. curr.
SaaS/PaaS	9,935	7,782	28		9,935	7,782	28	29
Thereof Cloud ERP Suite revenue2	8,672	6,581	32		8,672	6,581	32	33
Thereof Extension Suite revenue3	1,262	1,202	5		1,262	1,202	5	7
IaaS4	189	299	–37		189	299	–37	–36
Cloud revenue	10,124	8,082	25		10,124	8,082	25	27
Cloud and software revenue	15,904	14,134	13		15,904	14,134	13	14
Total revenue	18,040	16,329	10		18,040	16,329	10	12
Share of more predictable revenue (in %)	86	84	2pp		86	84	2pp
Cloud gross profit	7,553	5,867	29		7,601	5,892	29	30
Gross profit	13,226	11,778	12		13,275	11,803	12	14
Operating profit (loss)	4,789	434	>100		5,024	3,473	45	45
Profit (loss) after tax	3,545	94	>100		3,428	2,223	54
Earnings per share - Basic (in €)	2.98	0.05	>100		2.94	1.91	54
Net cash flows from operating activities	6,357	4,388	45
Free cash flow					5,939	3,929	51
1 For a breakdown of the individual adjustments see table "Non-IFRS Operating Expense Adjustments by Functional Areas" in this Quarterly Statement.
2 Cloud ERP Suite references the portfolio of strategic Software-as-a-Service (SaaS) and Platform-as-a-Service (PaaS) solutions that are tightly integrated with our core ERP solutions and are included in key commercial packages, such as RISE with SAP. The following offerings contribute to Cloud ERP Suite revenue: SAP S/4HANA Cloud, SAP Business Technology Platform, and core solutions for HR and payroll, spend management, commerce, customer data solutions, business process transformation, and working capital management. For additional information and historical data on Cloud ERP Suite, see SAP's Reporting Framework.
3 Extension Suite references SAP's remaining SaaS and PaaS solutions that supplement and extend the functional coverage of the Cloud ERP Suite.
4 Infrastructure as a service (IaaS): The major portion of IaaS comes from SAP HANA Enterprise Cloud

 

Financial Highlights[1]

Second Quarter 2025

In the second quarter, current cloud backlog grew by 22% to €18.05 billion and was up 28% at constant currencies. Cloud revenue was up 24% to €5.13 billion and up 28% at constant currencies. Cloud ERP Suite revenue was up 30% to €4.42 billion and up 34% at constant currencies.

Software licenses revenue decreased by 15% to €0.19 billion and was down 13% at constant currencies. Cloud and software revenue was up 11% to €7.97 billion and up 14% at constant currencies. Services revenue was down 5% to €1.06 billion and down 2% at constant currencies. Total revenue was up 9% to €9.03 billion and up 12% at constant currencies.

The share of more predictable revenue increased by 2 percentage points to 86%.

IFRS cloud gross profit was up 26% to €3.83 billion. Non-IFRS cloud gross profit was up 27% to €3.86 billion and was up 31% at constant currencies. IFRS Cloud gross margin was up 1.8 percentage points to 74.7%, non-IFRS cloud gross margin up 1.9 percentage points to 75.2% and up 1.8 percentage points at constant currencies to 75.0%.

IFRS operating profit increased to €2.46 billion and IFRS operating margin was up 12.5 percentage points to 27.2%. IFRS operating profit growth was positively impacted by a restructuring expense decline of €0.6 billion as compared to Q2 2024 in connection with the 2024 transformation program. Non-IFRS operating profit was up 32% to €2.57 billion and was up 35% at constant currencies, non-IFRS operating margin increased by 5.0 percentage points to 28.5% and was up 4.8 percentage points to 28.2% at constant currencies. Both, IFRS and non-IFRS operating profit growth benefitted from the operational efficiencies realized through successful execution of the 2024 transformation program and lower share-based compensation expenses.

Driven by the operating profit growth, IFRS earnings per share (basic) increased 91% to €1.45. Non-IFRS earnings per share (basic) increased 37% to €1.50. IFRS effective tax rate was 30.1% and non-IFRS effective tax rate was 30.8%. Both were mainly driven by a temporary inability to offset withholding taxes in Germany due to carryforward of tax losses from prior year. The IFRS effective tax rate is lower than the non-IFRS effective tax rate due to tax benefits from tax-exempt income.

Operating cash flow in the second quarter was up 71% to €2.58 billion and free cash flow increased by 83% to €2.36 billion.  The increase was mainly attributable to the higher profitability and the positive development of working capital (outside of restructuring related impacts), lower payouts for share-based compensation, lower restructuring payments, and lower income-tax payments. For the first six months, operating cash flow was up 45% to €6.36 billion and free cash flow increased by 51% to €5.94 billion

Share Repurchase Program

In May 2023, SAP announced a share repurchase program with an aggregate volume of up to €5 billion and a term until December 31, 2025. As of June 30, 2025, SAP had repurchased 24,743,442 shares at an average price of €185.51 resulting in a purchased volume of approximately €4.6 billion under the program.

2024 Transformation Program: Focus on scalability of operations and key strategic growth areas

In January 2024, SAP announced a company-wide restructuring program which concluded as planned in the first quarter 2025. Overall expenses associated with the program were approximately €3.2 billion. Restructuring payouts amounted to €2.5 billion for the full-year 2024 and €0.6 billion for the first six months of 2025. Approximately €0.2 billion is expected to be paid out in the remainder of 2025.  

Business Highlights

In the second quarter, customers around the globe continued to choose the "RISE with SAP" journey to drive their end-to-end business transformations. These customers included: Acron Aviation, Alibaba Group, Balluff, BALMAIN, Bell Food Group, Cementos Argos, Eberspächer Group, Ernsting's family, GSK, J-POWER, Linfox, Mannington Mills, Mercedes-AMG PETRONAS Formula One, NS Reizigers, Proximus Group, Replay, Sumitomo Rubber Industries, Synapxe, University Medical Center of the Johannes Gutenberg University Mainz, and Votorantim.

Alivus Life Sciences, Biel City Administration, Iochpe-Maxion, Rico Auto Industries, and Sinar Mas Mining went live on SAP S/4HANA Cloud in the second quarter.

Daoudata, EGYM, Gardner White Furniture, MCH Group, NEBCO, and PwC chose "GROW with SAP", a journey helping customers adopt cloud ERP with speed, predictability, and continuous innovation.

Key customer wins across SAP's solution portfolio included: Accenture, Adobe, BAE Systems, BMW Group, Brown-Forman, Delta, Deutsche Börse, Döhler, German Armed Forces, German Federal Pension Insurance, Helaba, HENSOLDT, IBM, Infosys, Interroll, L'Oréal, LTIMindtree, MANN+HUMMEL, Metcash, SPIE, Standard Chartered, and Zurich Cantonal Bank.

Ahlstrom, BRF, Covestro, NTN, Techcombank, and Zespri International went live on SAP solutions.

In the second quarter, SAP's cloud revenue performance was particularly strong in APJ and EMEA and solid in the Americas region. Brazil, Chile, France, India, Italy, South Korea and Spain had outstanding performance, while Canada, China, Germany, Japan, and the U.S. were particularly strong.

On May 5, SAP announced that it had further extended the contract of CEO and chairman of the Executive Board Christian Klein to five years, until April 2030. In addition, the contract of Dominik Asam, CFO and member of the Executive Board, has been further extended for two years to March 2028.

On May 13, SAP held its Annual General Meeting (AGM) of Shareholders as a virtual event. The AGM approved all agenda items with strong support, including the dividend proposal of €2.35 per share for fiscal year 2024.

On May 20, SAP and Accenture announced joined forces to help companies enable connected intelligence across the enterprise to drive speed and agility in the AI era, through a strategic expansion of their long-standing partnership. In addition, SAP and Palantir announced a partnership to facilitate joint customers' cloud migration journey and modernization programs, by connecting the unified, context-rich data environment of SAP Business Data Cloud with Palantir's Ontology and AIP.

On May 27, SAP and Alibaba Group announced a strategic partnership to accelerate cloud transformation.

Outlook 2025

Financial Outlook 2025

While the prevailing dynamic environment implies elevated levels of uncertainty and reduced visibility, SAP currently continues to expect:

•  €21.6 – 21.9 billion cloud revenue at constant currencies (2024: €17.14 billion), up 26% to 28% at constant currencies.

•  €33.1 – 33.6 billion cloud and software revenue at constant currencies (2024: €29.83 billion), up 11% to 13% at constant currencies.

•  €10.3 – 10.6 billion non-IFRS operating profit at constant currencies (2024: €8.15 billion), up 26% to 30% at constant currencies.

•  Approximately €8.0 billion free cash flow at actual currencies (2024: €4.22 billion)

•  An effective tax rate (non-IFRS) of approximately 32% (2024: 32.3%)^[2].

The company also continues to expect current cloud backlog growth at constant currencies to slightly decelerate in 2025.

While SAP's 2025 financial outlook for the income statement parameters is at constant currencies (including an average exchange rate of 1.08 USD per EUR), actual currency reported figures are expected to be impacted by currency exchange rate fluctuations as the company progresses through the year, as reflected in the table below.

Currency Impact Assuming June 30, 2025 Rates Apply for the Remainder of 2025

In percentage points	Q3 2025	FY 2025
Cloud revenue growth	-5.0pp	-3.5pp
Cloud and software revenue growth	-4.0pp	-3.0pp
Operating profit growth (non-IFRS)	-4.5pp	-3.0pp

 

This includes an exchange rate of 1.17 USD per EUR.

Non-Financial Outlook 2025

As announced on May 9, SAP has replaced the Women in Executive Roles KPI with the Business Health Culture Index (BHCI). In 2025, SAP expects a BHCI score in the range of 80% to 82%.

For 2025, SAP continues to expect:

•  A Customer Net Promoter Score of 12 to 16.

•  The Employee engagement index to be in a range of 74% to 78%.

•  To steadily decrease carbon emissions across the relevant value chain.

Additional Information

This press release and all information therein is preliminary and unaudited. Due to rounding, numbers may not add up precisely. The Q1 2025 Quarterly Statement can be downloaded from: https://www.sap.com/investors/sap-2025-q2-statement

SAP Performance Measures

For more information about our key growth metrics and performance measures, their calculation, their usefulness, and their limitations, please refer to the following document on our Investor Relations website: https://www.sap.com/investors/performance-measures

Webcast
SAP senior management will host a financial analyst conference call on Tuesday, July 22nd at 11:00 PM (CEST) / 10:00 PM (BST) / 5:00 PM (EDT) / 2:00 PM (PDT). The conference will be webcast on the Company's website at https://www.sap.com/investor and will be available for replay. Supplementary financial information pertaining to the second quarter results can be found at https://www.sap.com/investor

About SAP
As a global leader in enterprise applications and business AI, SAP (NYSE: SAP) stands at the nexus of business and technology. For over 50 years, organizations have trusted SAP to bring out their best by uniting business-critical operations spanning finance, procurement, HR, supply chain, and customer experience. For more information, visit www.sap.com.

For more information, financial community only:
Alexandra Steiger	+49 (6227) 7-767336	investor@sap.com, CET
Follow SAP Investor Relations on LinkedIn at SAP Investor Relations.
For more information, press only:
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Daniel Reinhardt	+49 (6227) 7-40201	daniel.reinhardt@sap.com, CET
For customers interested in learning more about SAP products:
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This document contains forward-looking statements, which are predictions, projections, or other statements about future events. These statements are based on current expectations, forecasts, and assumptions that are subject to risks and uncertainties that could cause actual results and outcomes to materially differ. Additional information regarding these risks and uncertainties may be found in our filings with the Securities and Exchange Commission, including but not limited to the risk factors section of SAP's 2024 Annual Report on Form 20-F.

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[1] The Q2 2025 results were also impacted by other effects. For details, please refer to the disclosures on page 26 of the Q2 Quarterly Statement. 

[2] The effective tax rate (non-IFRS) is a non-IFRS financial measure and is presented for supplemental informational purposes only. We do not provide an outlook for the effective tax rate (IFRS) due to the uncertainty and potential variability of gains and losses associated with equity securities, which are reconciling items between the two effective tax rates (non-IFRS and IFRS). These items cannot be provided without unreasonable efforts but could have a significant impact on our future effective tax rate (IFRS).

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FAQ

What were SAP's key Q2 2025 financial results?

SAP reported cloud revenue of €5.13 billion (up 24%), total revenue of €9.03 billion (up 9%), and non-IFRS operating profit of €2.57 billion (up 32%).

How much has SAP spent on its share repurchase program?

SAP has repurchased 24.7 million shares at €185.51 average price, totaling €4.6 billion of the €5 billion program.

What is SAP's cloud revenue outlook for 2025?

SAP expects cloud revenue of €21.6-21.9 billion at constant currencies, representing growth of 26-28%.

How did SAP's Cloud ERP Suite perform in Q2 2025?

Cloud ERP Suite revenue grew 30% to €4.42 billion and increased 34% at constant currencies.

What was SAP's free cash flow in Q2 2025?

Free cash flow increased 83% to €2.36 billion, driven by higher profitability and positive working capital development.

How much did SAP's cloud backlog grow in Q2 2025?

Current cloud backlog grew 22% to €18.05 billion and was up 28% at constant currencies.