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ERP specialist SAP has reported a strong start to 2025, with first quarter (ended 31st March 2025) revenue up 11% in constant currency (ccy) to €9.01bn, buoyed by impressive cloud performance as the company's transformation continues to gain momentum.
Cloud revenue surged 26% ccy to €4.99bn, with Cloud ERP Suite revenue showing particularly robust growth of 33% ccy to €4.25bn. The current cloud backlog grew 29% ccy to €18.20bn, providing solid visibility for future growth.
SAP posted IFRS operating profit of €2.33bn (up from a €787m loss in the same quarter last year, see SAP cloud up 25% in Q1 24 but restructuring hammers profits) with non-IFRS operating profit climbing 58% ccy to €2.46bn – reflecting the completion of its 2024 transformation programme, which had focused on shifting the company toward AI and cloud services.
The firm's cloud revenue performance was particularly strong in the Asia-Pacific/Japan (up 18% ccy to €1.32bn) and EMEA (up 11% ccy to €4.01bn) regions, with Brazil, Chile, Germany, India, Italy, South Korea and Spain singled out for "outstanding performances."
Operating cash flow improved 31% to €3.78bn, while free cash flow surged 36% to €3.58bn, demonstrating the financial benefits of SAP's transition to a subscription-based model.
SAP maintained its full-year outlook, expecting cloud revenue to grow 26% to 28% ccy to between €21.6bn and €21.9bn for 2025. The company also anticipates non-IFRS operating profit to reach €10.3bn to €10.6bn, representing growth of 26% to 30% ccy.
Posted by: Craig Wentworth at 09:24
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