SAP Q2 earnings beat estimates as cloud backlog rises 26%
SAP reported €9.88 billion in second-quarter revenue and beat profit estimates, easing near-term concerns about AI pressure on enterprise software.
By Dominic Okoye · Staff Writer
· 3 min read
SAP Q2 earnings came in ahead of Wall Street’s expectations, giving the enterprise software company a near-term answer to investor concern that generative AI could weaken demand for traditional business applications. SAP reported second-quarter revenue of €9.88 billion, up 11% from a year earlier and slightly above analysts’ €9.85 billion target, while adjusted earnings of €1.89 per share beat the €1.68 consensus estimate.
The company’s American depositary receipts rose more than 2% in after-hours trading after the report. The move was modest against the larger backdrop: SAP’s stock has fallen 40% year to date, with investors weighing whether AI tools could eventually replace parts of the software stack that companies have long bought from vendors such as SAP.
SAP also reported operating profit of €4.16 billion for the quarter, compared with €3.54 billion a year earlier. The company did not raise its full-year revenue or cash-flow outlook, which keeps the beat from becoming a broader reset of expectations.
How did SAP Q2 earnings compare with estimates?
SAP beat on both adjusted profit and revenue. Adjusted earnings were €1.89 per share versus the €1.68 expected by Wall Street, and revenue was €9.88 billion versus the €9.85 billion analyst target.
The cloud business remains the center of the story. SAP said cloud revenue rose 24% year over year, and current cloud backlog increased 26% to €22.9 billion. Backlog is a useful signal for enterprise software companies because it reflects contracted cloud revenue that has not yet been recognized, though it is not the same as current-period sales.
The cloud shift also continues to change SAP’s revenue mix. The company said software support revenue fell 7% in the quarter as more customers move from on-premises systems to SAP’s cloud platform. That tradeoff is familiar across enterprise software: recurring cloud contracts can improve visibility, but they also replace older maintenance streams that were profitable and predictable.
What is SAP saying about AI risk?
Chief Executive Christian Klein argued that SAP’s AI products are differentiated because they are built into the business processes and data environments customers already use. According to Klein, that positioning helps SAP support more accurate and compliant AI outputs than general-purpose tools.
That remains SAP’s claim, and the company did not disclose in the report how much revenue is directly attributable to AI products. Like other large software vendors, SAP is trying to cast AI as an expansion layer on top of its installed base rather than a substitute for its core systems.
The immediate numbers support the narrower point that AI has not yet damaged SAP’s cloud demand. They do not settle the longer-term question of whether enterprises will use AI agents and coding tools to reduce spending on large application suites. For now, SAP’s backlog growth suggests customers are still committing budget to its platform.
SAP lowered its guidance for non-adjusted operating profit by €100 million, citing the acquisitions of Dremio Inc. and Prior Labs GmbH in May. The company left its broader full-year revenue and cash-flow guidance unchanged.
This story draws on original reporting from SiliconANGLE.
