Business software maker SAP has trimmed its full-year outlook for key cloud sales due to lower-than-anticipated transactional revenues in the second quarter.
"We've seen fewer public sector customers in Q2, also due to the geopolitical situation, but demand remains strong for H2," chief executive Christian Klein said in a press call.
The company reported second-quarter revenue growth of 5%, in line with market expectations.
Cloud revenue was €3.3 billion in the second quarter, falling short of a median estimate of €3.4 billion in a company-provided consensus, while total revenue came in at €7.55 billion compared to a median forecast of 47.6 billion.
"We see significant opportunities ahead, in particular through the transformative power of AI," Klein added in a statement.
SAP expects generative AI to fundamentally change its business and has pledged to invest more than $1 billion in AI-powered technology startups via its enterprise capital firm Sapphire Ventures.
For the full year, it lowered its cloud revenue outlook to €14 billion-14.2 billion from €14 billion-14.4 billion, and slightly lifted its forecast for its non-IFRS operating profit to €8.65 billion-8.95 billion from €8.6 billion-8.9 billion.
