Europe's biggest software company reported that third-quarter cloud revenue advanced by 25% on a constant-currency basis to €6.67 billion, an amount it cited as $7.49 billion. That exceeded the average analyst estimate of €6.57 billion compiled by Bloomberg, a sign the AI boom has not dented demand for SAP's offerings.
The current cloud backlog, a 12 month sales pipeline, came to €24.1 billion, representing a 26% increase at constant currencies. SAP has previously said this metric should come down as customers finish moving over to the cloud.
Chief Executive Officer Christian Klein has reoriented the Walldorf based company around AI and is directly overseeing development after customers were slow to pick up SAP's AI tools and questioned their value for money. Adoption is "progressing better than many other enterprise AI products, though still not a primary driver of bookings," TD Cowen analysts including Derrick Wood wrote before the results. Klein has stated that AI will be essential to future growth.
SAP builds software for financials, human resources and other core operations, and has pushed customers from on premise installs to cloud access. Most revenue now comes from remote use of its software.
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Shares closed Wednesday in Frankfurt at €208.65. The stock has rebounded from the earlier year "SaaSpocalypse" - a broad software selloff tied to worries that powerful new AI could replace traditional applications - and is up more than 60% from the July 23 low.
In plain English: with steady cloud gains, a large backlog, and an AI-focused approach, SAP plans to end standard support for its legacy offerings next year; after that, maintaining those older services will come with higher costs. That shift, alongside demand holding up, will influence SAP's cloud mix and how investors price its runway.
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