SAP has today reported fourth-quarter revenue that met market estimates, as resilient demand for its cloud software and services suggested enterprise spending held up despite a cooling global economy.
SAP also announced a two-year buyback programme worth up to €10 billion.
The Walldorf-based company has spent much of the past year racing to move its legacy database customers to the cloud while executing a €3.2-billion restructuring programme. Major customers wins in the fourth quarter included Dexco, Lockheed Martin and Rolls-Royce.
The company reported total revenue of €9.7 billion for the quarter, in line with a company-compiled consensus.
Cloud revenue for the fourth quarter came in at €5.6 billion compared to a consensus of €5.5 billion.
For the full year, cloud revenue surged 26% at constant currencies to €21 billion, while total cloud backlog climbed 30% to €77.3 billion. CEO Christian Klein said SAP Business AI has become a driver for growth as it was included in two thirds of SAP's Q4 cloud order entry.
SAP expects cloud revenue to grow between 23% and 25% in 2026 to between €25.8 billion and €26.2 billion.
The company also projects cloud and software revenue of €36.3 billion to 436.8 billion, growing 12% to 13% while operating profit is expected to climb by 14% to 18% to €11.9 billion to €12.3 billion.
The enterprise software maker anticipates free cash flow of approximately €10 billion for the year with its effective tax rate expected to improve to around 29% from 30.4%.
SAP said current cloud backlog growth will slightly decelerate in 2026 after posting 25% growth in 2025, though it expects total revenue growth to accelerate up to 2027 as more customers migrate to cloud-based solutions.
