SAP Quarterly Statement Q3 2025

• Current cloud backlog of €18.8 billion, up 23% and up 27% at constant currencies
• Cloud revenue up 22% and up 27% at constant currencies
• Cloud ERP Suite revenue up 26% and up 31% at constant currencies
• Total revenue up 7% and up 11% at constant currencies
• IFRS operating profit up 12%, non-IFRS operating profit up 14% and up 19% at constant currencies
• SAP updates its 2025 cloud revenue, operating profit and free cash flow outlook

WALLDORF, Germany, Oct. 22, 2025 /PRNewswire/ -- SAP SE (NYSE: SAP) announced today its financial results for the third quarter ended September 30, 2025.

Christian Klein, CEO:

SAP delivered a great Q3 with strong cloud revenue growth of 27%. We are gaining market share as our customers are adopting solutions across the entire Business Suite, including Business Data Cloud and AI at accelerated pace. For Q4 we are executing against a strong pipeline - which gives us confidence in our accelerating total revenue growth ambition for 2026.

Dominik Asam, CFO:

Q3's strong performance underscores the strength and agility of our model. Through disciplined execution and a sharp focus on profitability and cash flow, we've maintained forward momentum despite an uncertain macroeconomic backdrop. We enter the fourth quarter confident in our ability to deliver on our commitments, as reflected by an improved outlook for operating profit and free cash flow.

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.

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

Financial Highlights^[1]

Third Quarter 2025

In the third quarter, current cloud backlog grew by 23% to €18.84 billion and was up 27% at constant currencies, retaining its second quarter growth momentum considering that the WalkMe acquisition is now in the base. Cloud revenue was up 22% to €5.29 billion and up 27% at constant currencies. Cloud ERP Suite revenue was up 26% to €4.59 billion and up 31% at constant currencies.

Software licenses revenue decreased by 43% to €0.16 billion and was down 42% at constant currencies. Cloud and software revenue was up 8% to €8.02 billion and up 12% at constant currencies. Services revenue was up 2% to €1.06 billion and up 6% at constant currencies. Total revenue was up 7% to €9.08 billion and up 11% at constant currencies.

The share of more predictable revenue increased by 2 percentage points to 87%.

IFRS cloud gross profit was up 24% to €3.95 billion. Non-IFRS cloud gross profit was up 24% to €3.97 billion and was up 28% at constant currencies. IFRS cloud gross margin was up 1.5 percentage points to 74.6%, non-IFRS cloud gross margin up 1.3 percentage points to 75.1% and up 1.1 percentage points at constant currencies to 74.9%.

IFRS operating profit increased 12% to €2.49 billion and IFRS operating margin was up 1.3 percentage points to 27.4%. Non-IFRS operating profit was up 14% to €2.57 billion and was up 19% at constant currencies. Non-IFRS operating margin increased by 1.8 percentage points to 28.3% at both nominal and constant currencies. IFRS and non-IFRS operating profit growth were negatively impacted by approximately €0.1 billion as a result of a change in case law that affected SAP's other tax litigation as well as approximately €0.1 billion related to a workforce transformation, with another €0.1 billion expected to be realized in the fourth quarter of 2025.  

IFRS earnings per share (basic) increased 37% to €1.72. Non-IFRS earnings per share (basic) increased 29% to €1.59. IFRS effective tax rate was 25.3% and non-IFRS effective tax rate was 27.9%. 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 third quarter was up 7% to €1.50 billion and free cash flow increased by 5% to €1.27 billion. The increase was mainly attributable to higher profitability and to lower restructuring payments, which were partially offset by higher tax payments. For the first nine months, operating cash flow was up 36% to €7.86 billion and free cash flow increased by 40% to €7.21 billion.

Share Repurchase Program

In May 2023, SAP announced a share repurchase program with an aggregate volume of up to €5 billion, which was completed on August 13, 2025. SAP had repurchased 26,010,591 shares at an average price of €188.24 resulting in a purchased volume of approximately €4.9 billion under the program. The fourth and final tranche of the program was completed with a purchased volume of approximately €1.5 billion.

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 €0.7 billion for the first nine months of 2025. Approximately €0.1 billion is expected to be paid out in the fourth quarter of 2025.  

Business Highlights

In the third quarter, customers around the globe continued to choose the "RISE with SAP" journey to drive their end-to-end business transformations. These customers included: Alphabet, ANA HOLDINGS, BarmeniaGothaer, Computacenter, DXC Technology, Endress+Hauser, Ericsson, Jack Wolfskin, Japan Aviation Electronics Industry, JK Tyre & Industries, JYSK, The Magnum Ice Cream Company, Maple Leaf Foods, NIPPON EXPRESS HOLDINGS, Olam Food Ingredients, Otto Aerospace, STIHL, Takeda Pharmaceuticals, Tapestry, Vale Base Metals, and Zalaris.

BMW, City of Charlottesville, The Clorox Company, Country Fire Authority, La Trobe University, Nestlé, NYK Line, and PwC went live on SAP S/4HANA Cloud in the third quarter.

ABB, ArborGen, Kodiak AI, Konecta, Noventa, Perplexity, and VidaVeg 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: BREITLING, Canton of Bern, Derbyshire County Council, Grupo Boticário, Panasonic, Schwarz Group, Sysmex Corporation, Tata Consultancy Services, and Volkswagen Mexico.

Aeropuertos Argentina, The Australian Postal Corporation, HiPP, Landis+Gyr, and Rieter went live on SAP solutions.

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

On August 1, SAP and SmartRecruiters announced that SAP entered into an agreement to acquire SmartRecruiters, a leading talent acquisition (TA) software provider. The acquisition was completed on September 11.

On September 19, SAP and ADP, a global leader in HR and payroll solutions, announced that they are partnering to enable shared clients to run ADP Global Payroll in the cloud.

On September 24, SAP and OpenAI announced the launch of OpenAI for Germany, a partnership to bring SAP's enterprise applications expertise and OpenAI's leading AI technology to Germany's public sector.

In addition, SAP and Amazon Web Services (AWS), an Amazon.com company, unveiled plans to make SAP's Sovereign Cloud capabilities available on the AWS European Sovereign Cloud, a new independent cloud for Europe backed by a planned €7.8 billion investment from Amazon.

On September 25, SAP confirmed that the European Commission began formal proceedings on on-premise maintenance and support policies. SAP is working closely with the EU Commission to resolve the matter. Further, SAP does not currently anticipate the engagement will result in material impact on its financial performance.

In September, SAP National Security Services (SAP NS2®) was awarded a $1 billion firm-fixed-price Indefinite Delivery/Indefinite Quantity (IDIQ) contract from the United States Army for an end-user license agreement for the RISE with SAP portfolio. This significant deal is expected to run through September 2035, and enables the migration from on-premise systems to SAP's NS2's FedRAMP-authorized cloud platform, enhancing the speed and efficiency of enterprise software delivery to support mission-critical military operations.

On October 6, SAP and Google Cloud announced that they are expanding their long-standing data and analytics partnership with the launch of SAP Business Data Cloud Connect for Google BigQuery - a new capability introduced that simplifies access to mission-critical SAP data products from SAP Business Data Cloud through bidirectional, zero-copy sharing.

Outlook 2025

Financial Outlook 2025

For 2025, SAP is updating its cloud revenue, operating profit and free cash flow outlook and now expects:

• To generate cloud revenue towards the lower end of the outlook range of €21.6 – 21.9 billion at constant currencies (2024: €17.14 billion), up 26% to 28% at constant currencies.
• To generate non-IFRS operating profit towards the upper end of the outlook range of €10.3 – 10.6 billion at constant currencies (2024: €8.15 billion), up 26% to 30% at constant currencies.
• €8.0 – 8.2 billion free cash flow (2024: €4.22 billion). The previous outlook was approximately €8.0 billion.

SAP continues to expect:

• €33.1 – 33.6 billion cloud and software revenue at constant currencies (2024: €29.83 billion), up 11% to 13% at constant currencies.
• An effective tax rate (non-IFRS) of approximately 32% (2024: 32.3%)^[2].
• 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 September 30, 2025 Rates Apply for the Remainder of 2025

This includes an exchange rate of 1.17 USD per EUR.

Non-Financial Outlook 2025

For 2025, SAP continues to expect:

• A Customer Net Promoter Score of 12 to 16.
• The Business Health Culture Index (BHCI) to be in a range of 80% to 82%.
• 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 quarterly statement and all information therein is preliminary and unaudited. Due to rounding, numbers may not add up precisely. The Q3 2025 Quarterly Statement can be downloaded from: https://www.sap.com/investors/sap-2025-q3-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 Wednesday, October 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 third 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.

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[1] The Q3 2025 results were also impacted by other effects. For details, please refer to the disclosures on page 26 of this document. 

[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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