SAP (SAP) Stock Surges 8% Following Strong Q1 Cloud Revenue Performance

Key Highlights

Table of Contents

SAP delivered non-IFRS earnings per share of €1.72 in Q1, surpassing the analyst consensus of €1.65
Overall revenue increased 6% compared to last year, reaching €9.55 billion
Cloud business revenue jumped 19% year-over-year to €5.96 billion, exceeding the €5.89 billion Wall Street forecast
The company’s cloud backlog expanded 20% to reach €21.9 billion
2026 cloud revenue projections of €25.8–€26.2 billion were maintained, though subject to geopolitical and M&A conditions

Shares of SAP’s American depositary receipts soared 7.7% to $175.74 during Friday’s premarket session, recovering from Thursday’s 6.2% decline that was triggered by broader software sector weakness following disappointing market reactions to ServiceNow and IBM earnings.

$SAP Q1’26 EARNINGS HIGHLIGHTS

🔹 Revenue: €9.56B (Est. €9.53B) 🟢; +6%, +12% cc
🔹 Adj. EPS: €1.72; +20%
🔹 Cloud: €5.96B (Est. €5.90B) 🟢; +19%, +27% cc
🔹 Cloud & Software: €8.55B (Est. €8.47B) 🟢; +8%, +14% cc
🔹 Current Cloud Backlog: €21.9B; +20%, +25% constant…

— Wall St Engine (@wallstengine) April 23, 2026

Europe’s largest technology company by market capitalization reported first-quarter non-IFRS profit of €1.72 per share, exceeding the €1.65 consensus estimate. Revenue reached €9.55 billion, representing a 6% increase from the prior-year period.

The standout metric was cloud revenue performance. The segment generated €5.96 billion, marking a 19% year-over-year expansion and narrowly beating the €5.89 billion analyst projection.

SAP SE, SAP

Additionally, SAP closed the quarter with €21.9 billion in cloud backlog, representing 20% growth versus the same quarter last year. This metric provides visibility into contracted revenue that will be recognized in future periods.

Non-IFRS operating profit rose to €2.87 billion from €2.46 billion in the year-ago quarter, comfortably exceeding the €2.71 billion analyst estimate.

The previous session’s 6.2% drop in SAP shares was part of a widespread software sector retreat. Market participants sold off technology stocks after earnings reports from IBM and ServiceNow drew lackluster responses, despite both companies delivering respectable quarterly results.

The strong premarket rebound on Friday indicates investors are viewing SAP’s quarterly performance through a more positive lens when assessed independently.

2026 Guidance Reaffirmed With Caveats

The German enterprise software provider kept its 2026 cloud revenue target intact at €25.8 billion to €26.2 billion. Management also indicated that total revenue growth in constant currency terms should mirror 2025 levels, with an anticipated uptick in 2027.

However, this outlook comes with two important qualifications. The first relates to SAP’s pending acquisition of data management specialist Reltio, which is anticipated to complete during the second or third quarter. The second involves the necessity of reduced tensions in the Middle East.

Chief Financial Officer Dominik Asam specifically highlighted potential disruptions in the Strait of Hormuz as a concern. “We don’t see too long of a continuation of the shutdown of the Strait of Hormuz,” he explained to Barron’s, emphasizing that extended disruption could impact international supply chains and economic expansion.

He continued with measured frankness: “In such a meltdown scenario, SAP is probably the lesser of your concerns in terms of exposure in capital markets.”

Cloud Platform Powers Growth Narrative

The cloud division has served as SAP’s primary growth catalyst for multiple years, partially driven by widespread enterprise artificial intelligence implementation. The 19% revenue expansion in the first quarter maintains this momentum.

The €21.9 billion cloud backlog represents committed future revenue streams that remain to be recorded on financial statements.

SAP holds the position of Europe’s most valuable technology company, with a market capitalization of $192.38 billion based on Thursday’s closing price.

The Reltio transaction, unveiled in March, remains subject to regulatory approval and is projected to finalize during the second or third quarter of 2026.

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