SAP reported second quarter profit and revenue that edged by Wall Street estimates. SAP stock dipped amid management commentary on sales trends.
The enterprise software maker reported financial results after the market close on Tuesday.
For the quarter ending June 30, SAP earnings came in at 1.50 euros per share (about $1.76) on an adjusted basis, up 36% from a year earlier. Revenue climbed 9% to 9.027 billion euros (about $10.57 billion). Analysts had estimated adjusted EPS of 1.42 euros per share on revenue of 9.02 billion euros.
Cloud computing revenue rose 28% to 5.13 billion euros vs. estimates of 5.18 billion euros.
SAP Stock: Shift To Cloud
SAP reports its own financial metric called Current Cloud Backlog, or CCB. It refers to the amount of revenue a software company expects to recognize in the future from contracts with customers. In Q2, CCB rose 28% to $18.05 billion, slowing from 29% growth the previous three quarters.
"Management stated the one-point deceleration was in part due to the broader uncertain macro contributing to elongated sales cycles in certain sectors such as U.S. public sector and manufacturing/supply chain companies impacted by tariff uncertainty," said Keith Bachman, analyst at BMO Capital Markets in a report.
"Management anticipates a slight CCB growth deceleration in the second half of 2025, though shared that pipeline coverage is strong. SAP management stated that typically two thirds of annual cloud business close in the second half, thus increasing concern given the macro uncertainty especially if deal cycles are further elongated."
On the stock market today, NYSE-listed SAP stock dipped over 4% to near 293 in early trading.
Also, SAP reaffirmed its 2025 outlook.
In 2025, SAP stock in the U.S. had advanced 25% as of Tuesday's regular session.
Like Oracle, SAP is moving away from software-license sales to subscription-based cloud services.
Further, SAP stock holds a Composite Rating of 93 out of a best-possible 99, according to IBD Stock Checkup.
Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
