SAP SE Q3 2025 Earnings Recap

SAP reported strong Q3 2025 results, highlighted by a 27% increase in cloud revenue and a robust current cloud backlog, underscoring the company's accelerating market share gains, particularly in the U.S. public sector.

Key Takeaways

• Cloud revenue grew by 27%, marking the fifth consecutive quarter of growth exceeding 25% with a solid gross margin of approximately 75%.
• Total revenue increased by 11%, and current cloud backlog also rose by 27%, indicating solid demand for SAP's offerings.
• Free cash flow rose 5%, and operating profit was up 19%, despite facing a negative impact of approximately €200 million.
• Notable customer wins included industry leaders like Alphabet, Ericsson, and Lufthansa, who chose to deepen their relationship with SAP through new initiatives.
• SAP's strategy of combining AI solutions with existing business processes shows promising potential, particularly in B2B environments, as they continue to innovate in cloud offerings and partnership initiatives.