Summary
SAP SE (SAP, Financial) has announced its financial results for the first quarter of 2025, showcasing significant growth in cloud revenue and operating profit. The company reported a 28% increase in its current cloud backlog, reaching €18.2 billion, and a 27% rise in cloud revenue. The results, released on April 22, 2025, underline SAP's robust business model and strategic focus on cloud solutions, despite a volatile economic environment.
Positive Highlights
- Cloud backlog increased by 28% to €18.2 billion, with a 29% rise at constant currencies.
- Cloud revenue grew by 27% to €4.99 billion, with a 26% increase at constant currencies.
- Cloud ERP Suite revenue surged by 34% to €4.25 billion, with a 33% rise at constant currencies.
- Total revenue increased by 12% to €9.01 billion, with an 11% rise at constant currencies.
- IFRS operating profit reached €2.3 billion, with a non-IFRS operating profit of €2.5 billion, marking a 60% increase.
Negative Highlights
- Software licenses revenue decreased by 10% to €0.18 billion.
- Services revenue declined by 1% to €1.07 billion.
- Infrastructure as a Service (IaaS) revenue fell by 37%.
Financial Analyst Perspective
From a financial analyst's viewpoint, SAP's Q1 2025 results demonstrate a strong start to the year, driven by impressive growth in cloud services. The significant increase in operating profit, both IFRS and non-IFRS, highlights the company's effective cost management and strategic execution. The decline in software licenses and services revenue, however, suggests a shift in customer preference towards cloud-based solutions, which SAP is well-positioned to capitalize on.
Market Research Analyst Perspective
As a market research analyst, SAP's performance in Q1 2025 reflects the growing demand for cloud solutions across various industries. The company's ability to secure major clients and expand its cloud offerings indicates a strong market position. The robust growth in regions like APJ and EMEA, along with strategic customer wins, underscores SAP's global reach and adaptability in a dynamic market environment.
Frequently Asked Questions
Q: What was the growth in SAP's cloud backlog in Q1 2025?
A: SAP's cloud backlog grew by 28% to €18.2 billion, with a 29% increase at constant currencies.
Q: How much did SAP's cloud revenue increase in Q1 2025?
A: SAP's cloud revenue increased by 27% to €4.99 billion, with a 26% rise at constant currencies.
Q: What was the change in SAP's operating profit in Q1 2025?
A: SAP's IFRS operating profit reached €2.3 billion, and non-IFRS operating profit was €2.5 billion, marking a 60% increase.
Q: How did SAP's software licenses revenue perform in Q1 2025?
A: SAP's software licenses revenue decreased by 10% to €0.18 billion.
Q: What is SAP's financial outlook for 2025?
A: SAP expects cloud revenue of €21.6 – 21.9 billion, cloud and software revenue of €33.1 – 33.6 billion, and non-IFRS operating profit of €10.3 – 10.6 billion at constant currencies for 2025.
Read the original press release here.
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