SAP reported a net profit of €1.94bn ($2.27bn) for the first quarter of 2026 (Q1 2026), reflecting an 8% increase from €1.79bn ($2.09bn) in the same period of the previous year.
Earnings per share (EPS) of the German enterprise software firm rose by 9% to €1.66 in the reported quarter ended 31 March 2026 from €1.52 in Q1 2025.
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The company’s total revenue for the quarter was €9.55bn, marking a 6% increase from €9.01bn in the first quarter of 2025.
SAP’s operating profit for the quarter increased by 17% to €2.74bn from €2.33bn in the prior-year period, with the operating margin improving by 2.8% points to 28.7%.
Cloud revenue grew by 19% to €5.96bn, while cloud and software revenue increased by 8% to €8.54bn. The cloud ERP Suite revenue rose by 23% and by 30% at constant currencies.
The company’s free cash flow decreased by 9% to €3.24bn from €3.58bn in the first quarter of 2025. SAP’s financial performance was supported by a reduction in share-based compensation expenses, which declined by €135m.
In terms of geographic performance, cloud revenue in the Europe, Middle East, and Africa (EMEA) region increased by 27% to €2.58bn, while the Americas saw a 13% increase to €2.51bn.
The Asia-Pacific and Japan (APJ) region experienced an 18% rise in cloud revenue to €862m.
SAP’s current cloud backlog stood at €21.9bn, reflecting a 20% increase compared to the previous year, and a 25% rise at constant currencies.
SAP CEO Christian Klein said: “We had a strong start to the year, with Current Cloud Backlog growing by 25% and Cloud Revenue up 27% at constant currencies. This performance is supported by our momentum in Business AI as we are already delivering real outcomes for customers today.
“We are growing faster than the market and are gaining share as customers expand across our Suite and with our AI solutions. At Sapphire, we will show how we are taking the next leap forward.”
The company’s financial outlook for the full year 2026 anticipates cloud revenue to reach between €25.8bn and €26.2bn at constant currencies, representing a 23% to 25% increase from 2025.
SAP expects cloud and software revenue to be between €36.3bn and €36.8bn, marking a 12% to 13% rise at constant currencies. Non-IFRS operating profit is projected to be between €11.9bn and €12.3bn, up 14% to 18% at constant currencies, with free cash flow expected to be approximately €10bn.
The effective tax rate (non-IFRS) is anticipated to be around 29%, and the growth of the current cloud backlog at constant currencies is expected to slightly decelerate from the 25% growth seen in 2025.
SAP’s strategic initiatives during the reported quarter included the creation of the new Customer Value Group, which combines the Customer Success and Customer Services & Delivery organisations, effective 1 April. This group aims to enhance the customer journey by aligning selling, delivery, services, and support, driving adoption, renewal, and expansion of SAP’s cloud and AI-powered solutions.
Towards the end of the first quarter, the German software giant announced the acquisition of Reltio, a provider of master data management (MDM) software, for an undisclosed price.
Earlier this week, SAP and Google Cloud announced a partnership to enhance AI-driven marketing strategies.
The collaboration integrates SAP Engagement Cloud, SAP Customer Experience, and Joule solutions with Gemini Enterprise, enabling marketers to deploy AI agents that access unified data across both ecosystems. This integration allows for executing complex marketing strategies based on user-defined goals.
Gemini Enterprise serves as a central hub for data integration and multi-agent coordination, supported by SAP Business Data Cloud Connect for Google and BigQuery. This setup ensures secure, bidirectional data access, facilitating seamless multi-agent orchestration and optimised outcomes across platforms.
