SAP Cloud Revenue Exceeds Expectations, AI Demand Becomes the Main Driving Force

Europe's largest software company, SAP, reported first-quarter cloud business revenue that exceeded analysts' expectations, causing its American Depositary Receipts (ADRs) to jump by 10% in after-hours trading.

On April 23rd, after the U.S. stock market closed, SAP released its financial report for the first quarter of fiscal year 2026, delivering a better-than-expected result:

• First-quarter total revenue reached $11.17 billion, a year-over-year increase of 6.1%, which is in line with market expectations.

• Cloud business revenue reached €5.962 billion (approximately $6.96 billion), a year-over-year increase of 27% at constant currencies, higher than the analyst consensus expectation of €5.9 billion; actual year-over-year growth also maintained an increase of 19%, exceeding analyst expectations.

• First-quarter profit increased by 17% year-over-year, with GAAP earnings per share at $1.94, exceeding the expected $1.81. Adjusted earnings per share were $2.01, also exceeding the market expectation of $1.92.

• SAP maintains its full-year cloud business revenue forecast of €25.5 billion to €26.2 billion.

SAP CEO Christian Klein stated:

The company performed strongly in the first quarter, our growth is faster than the market, and we are winning share with AI solutions.

It is worth noting that the current cloud business backlog increased by 25% at constant currencies, reaching $25.58 billion, in line with analyst expectations.

This indicator was once a sensitive point in the market. In January of this year, when SAP released the same 25% growth figure, the stock price fell. Christian Klein had previously referred to this growth rate as a "disappointing" level.

However, the market reaction this time was quite different. After the release of the financial report, the company's ADRs rose by 10% in after-hours trading and then retreated to about a 7% increase.

Investors seem more willing to reassess the value of this growth rate in conjunction with the advancement of AI commercialization. Although SAP's stock price has fallen by 32% since the beginning of the year, this financial report undoubtedly provides it with some breathing room.

Cloud Business Thrives Globally Across Three Major Regions

An analysis by geographical area shows that SAP's cloud business has achieved robust growth in all three major markets globally.

At constant currencies, EMEA (Europe, Middle East, and Africa) cloud revenue reached €2.625 billion, a 29% year-over-year increase; Americas cloud revenue was €2.754 billion, a 23% increase; APJ (Asia Pacific and Japan) cloud revenue was €947 million, a 30% increase, leading the growth rate among the three regions.

Overall cloud and software revenue reached €9.034 billion at constant currencies, a 14% increase.

EMEA remains the largest contributing region, with cloud and software revenue reaching €4.037 billion, while the Americas and APJ are €3.63 billion and €1.368 billion, respectively.

In terms of total revenue, the domestic German market grew by