SAP Cloud Revenue Rises 26% as Company Targets Top End of Outlook

Key Facts

SAP's cloud revenue rose 26% year on year in the third quarter of 2026 to 6,668 million euros, according to the company's earnings statement, as it steered its annual outlook toward the top end of its existing ranges. Total revenue for the period reached 10,270 million euros, compared with 9,076 million euros in the third quarter of 2025, according to figures published on its investor relations website. Operating profit under International Financial Reporting Standards was about 2,930 million euros in the third quarter. Non-IFRS operating profit was about 3,030 million euros in the same period. That profit exceeded the median analyst forecast of 2,942 million euros, according to Visible Alpha estimates published by the company on its investor relations website.

Cloud revenue exceeded the median analyst forecast of 6,594 million euros for the third quarter, according to Visible Alpha estimates published by the company. Revenue grew 25% year on year at constant currencies, compared with the reported growth rate, which includes the impact of currency movements. In the second quarter of 2026, cloud revenue was 6,281 million euros, according to the earnings statement for that period. The business posted reported annual growth of 22% at the time, while growth at constant currencies was 24%. Annual cloud revenue growth thus accelerated in the third quarter compared with the second quarter, both on a reported basis and at constant currencies.

Within the business, Cloud ERP Suite revenue was about 5,924 million euros in the third quarter, according to the company's quarterly statement. Suite revenue grew 29% compared with the same period a year earlier and 28% at constant currencies. The company said cloud revenue growth benefited from a revenue catch-up spanning several quarters for customers that had recovered from financial distress, a factor that supported the period's reported performance. Chief Executive Christian Klein said in comments on the results published by investor relations: "Our customers are investing in technology." On liquidity, third-quarter free cash flow rose to 1,718 million euros from 1,266 million euros a year earlier, an annual increase of 36%.

Current cloud backlog reached 24,144 million euros in the third quarter, compared with 18,839 million euros in the same period a year earlier, according to the quarterly statement. The backlog posted reported annual growth of 28%, while the increase at constant currencies was 26%. The annual comparison is with the third quarter of the previous year, while current cloud backlog in the second quarter of 2026 was 22,929 million euros. Annual backlog growth at constant currencies was also 26% in that quarter, according to the previous period's earnings statement. Current backlog therefore increased in value from the previous quarter, while its annual growth rate at constant currencies remained steady between the periods.

SAP defines current cloud backlog as contractually committed cloud revenue, according to its half-year report filed with the U.S. Securities and Exchange Commission. The company expects to recognize this revenue over the next 12 months, the period used to define the current backlog. The metric thus includes contractual commitments for revenue the company expects to record within that period, while quarterly cloud revenue reflects what it has already recorded during the quarter. This definition places the backlog within contracted business awaiting revenue recognition, according to the timeframe the company sets for the metric. This backlog differs in nature from the revenue catch-ups that supported third-quarter results, as those catch-ups related to revenue spanning several quarters for customers that had recovered from financial distress.

For fiscal 2026, SAP said it was targeting the top end of its cloud revenue outlook range of 25.8–26.2 billion euros at constant currencies. It is also targeting the top end of its combined cloud and software revenue outlook range of 36.3 to 36.8 billion euros on the same basis. The new guidance means targeting levels closer to the upper limits of the existing outlook, while keeping the lower and upper bounds of each range at their previously announced levels. The first outlook covers cloud revenue alone, while the second includes both cloud and software, according to the company's quarterly statement. SAP scheduled the release of its fourth-quarter and full-year fiscal 2026 results for January 28, 2027, at 6:00 a.m. Central European Time, according to its financial calendar.