SAP accelerates momentum with 28% cloud growth in Q2

SAP has delivered another quarter of robust cloud performance, with Q2 2025 (ended 30 June) cloud revenue climbing 28% year-over-year in constant currency to €5.13bn, accelerating from the 26% growth reported in Q1 (see SAP posts strong Q1 cloud growth).

Total revenue grew 12% ccy to €9.03bn, whilst Cloud ERP Suite revenue – the company's strategic focus area – jumped 34% ccy to €4.42bn. The company’s current cloud backlog expanded 28% ccy to €18.05bn, signalling continued momentum ahead.

The financial benefits of SAP's 2024 AI-focused transformation programme (see Double digit growth for SAP Q2 as AI-focused restructuring continues) are now flowing through emphatically – not just in terms of revenue growth, but also now profitability – with IFRS operating profit doubling to €2.46bn in Q2 compared with the same period last year (the non-IFRS metric grew 35% yoy ccy to €2.57bn). Operating cash flow was also up significantly – a 71% rise to €2.58bn.

CEO Christian Klein highlighted AI as a key differentiator, with SAP’s AI-powered assistant Joule becoming available “everywhere and for everything” alongside SAP Business Data Cloud as an AI accelerator.

Regional performance remained solid, with EMEA cloud revenue up 15%. Customer wins spanned industries, including GSK, Mercedes-AMG PETRONAS Formula One, and Bell Food Group taking the RISE with SAP journey to drive their end-to-end business transformations.

For the first half, cloud revenue grew 27% ccy to €10.12bn, keeping SAP on track to meet its full-year outlook of €21.6-21.9bn in cloud revenue (26-28% growth) and non-IFRS operating profit of €10.3-10.6bn. The sustained cloud acceleration and SAP’s margin expansion validate the company’s strategic pivot last year, positioning it strongly as enterprises increasingly embrace AI-powered transformation. However, notwithstanding these successes, CFO Dominik Asam injected a note of caution alongside the optimistic forward-looking assessment, alluding to “geopolitical developments and public sector trends” (we’ve seen longer decision cycles and project delays affect numerous suppliers in recent quarters) which could temper good fortune as the second half of the company’s fiscal year plays out.

Posted by: Craig Wentworth at 10:12

Tags: results   growth   profitability   quarterlies