SAP Q2 Results | Cloud and AI Drive Record Operating Profit

Since our last SAP call, it’s been printing money like a hedge fund on fire. You don’t ignore a chart like that, you respect it. So the question now isn’t what happened , it’s what’s next. Let’s dig in and see if this beast’s got more fuel or if it’s time to take some chips off the table

SAP delivered solid Q2 results, with revenue climbing 9% year over year to €9.0 billion, aligning with market expectations. The company’s non-IFRS earnings per share came in at €1.50, beating analyst forecasts, reflecting strong execution in its cloud first strategy.

Cloud revenue was a standout, growing 24% to €5.1 billion, largely due to increasing demand for ERP cloud solutions, which saw a robust 30% surge. Additionally, SAP’s cloud backlog reached €18.1 billion, up 28% in constant currency, signaling strong forward momentum in its subscription based business. The company's adjusted operating profit rose an impressive 35%, supported by expanding profit margins and internal efficiencies gained through AI-powered automation and cost optimization.

CEO Christian Klein underscored SAP’s commitment to becoming an AI centric enterprise. He noted that the company now has 14 AI agents actively deployed and has embedded more than 100 prebuilt data products into its Business Suite applications. These enhancements are designed to improve decision-making, automate routine processes, and deliver greater value to customers across industries.

SAP also secured a number of high-profile customer wins during the quarter, including Alibaba, BMW, GSK, Delta Airlines, Adobe, and the German Armed Forces—demonstrating broad-based confidence in SAP’s technology platform. A particular focus has been on the Business Data Cloud, which integrates real-time business data for insights and analytics. According to SAP, this offering is helping lift the value of large cloud deals by as much as 30%.

Looking ahead, SAP reaffirmed its full year 2025 outlook, projecting between €21.6 and €21.9 billion in cloud revenue, alongside €10.5 billion in operating profit and €8 billion in free cash flow.

While acknowledging some external challenges such as currency volatility and delays in client decisions due to tariffs management expressed confidence in a strong second half performance, bolstered by a healthy sales pipeline and disciplined cost control

SAP’s revenue model continues to shift towards more predictable income, with recurring revenue now making up 86% of the total, underscoring the success of its subscription-based and cloud-first approach. The company remains focused on scaling its AI and data capabilities to maintain momentum and long term growth.