- Current cloud backlog of €18.2 billion, up 28% and up 29% at constant currencies
- Cloud revenue up 27% and up 26% at constant currencies
- Cloud ERP Suite revenue up 34% and up 33% at constant currencies
- Total revenue up 12% and up 11% at constant currencies
- IFRS operating profit of €2.3 billion; non-IFRS operating profit of €2.5 billion, up 60% and up 58% at constant currencies
WALLDORF, Germany, April 22, 2025 -- SAP SE (NYSE: SAP) announced today its financial results for the first quarter ended March 31, 2025.
Christian Klein, CEO:
Q1 once again underlines that our success formula is working. Current cloud backlog expanded 29% at constant currencies and total revenue saw a double-digit increase. With a share of more predictable revenue of 86%, SAP's business model remains resilient in uncertain times. Our AI-powered portfolio enables companies to navigate supply chain disruptions in over 130 countries and to unlock efficiencies with agility and speed.
Dominik Asam, CFO:
Q1 marks a solid start to the year in a highly volatile environment, with strong total revenue growth and outstanding operating profit expansion. These results are a testament to our cost discipline and focused execution. While we're encouraged by this momentum, we remain mindful of the broader environment and are approaching the rest of the year with vigilance, continuing to safeguard both profit and cash flow.
Financial Performance
Group results at a glance – First quarter 2025
IFRS | Non-IFRS1 | |||||||
€ million, unless otherwise stated | Q1 2025 | Q1 2024 | ∆ in % | Q1 2025 | Q1 2024 | ∆ in % | ∆ in % | |
SaaS/PaaS | 4,890 | 3,764 | 30 | 4,890 | 3,764 | 30 | 28 | |
Thereof Cloud ERP Suite2 | 4,251 | 3,167 | 34 | 4,251 | 3,167 | 34 | 33 | |
Thereof Extension Suite3 | 639 | 598 | 7 | 639 | 598 | 7 | 6 | |
IaaS4 | 104 | 164 | –37 | 104 | 164 | –37 | –38 | |
Cloud revenue | 4,993 | 3,928 | 27 | 4,993 | 3,928 | 27 | 26 | |
Cloud and software revenue | 7,938 | 6,960 | 14 | 7,938 | 6,960 | 14 | 13 | |
Total revenue | 9,013 | 8,041 | 12 | 9,013 | 8,041 | 12 | 11 | |
Share of more predictable revenue (in %) | 86 | 84 | 2pp | 86 | 84 | 2pp | ||
Cloud gross profit | 3,720 | 2,837 | 31 | 3,745 | 2,849 | 31 | 30 | |
Gross profit | 6,607 | 5,762 | 15 | 6,632 | 5,774 | 15 | 14 | |
Operating profit (loss) | 2,333 | –787 | NA | 2,455 | 1,533 | 60 | 58 | |
Profit (loss) after tax | 1,796 | –824 | NA | 1,681 | 944 | 78 | ||
Earnings per share - Basic (in €) | 1.52 | –0.71 | NA | 1.44 | 0.81 | 79 | ||
Net cash flows from operating activities | 3,780 | 2,878 | 31 | |||||
Free cash flow | 3,583 | 2,642 | 36 | |||||
1 | For a breakdown of the individual adjustments see table "Non-IFRS Operating Expense Adjustments by Functional Areas" in this Quarterly Statement. |
2 | Cloud ERP Suite references the portfolio of strategic Software-as-a-Service (SaaS) and Platform-as-a-Service (PaaS) solutions that are tightly integrated with our core ERP solutions and are included in key commercial packages, such as RISE with SAP. Further, Cloud ERP Suite also includes cloud-based maintenance components supporting our customers' ERP landscapes and their cloud transformation. The following offerings contribute to Cloud ERP Suite revenue: SAP Cloud ERP, SAP Business Technology Platform, financial- and spend management, supply chain management, core solutions for human capital management, commerce, business transformation management and AI. |
3 | Extension Suite references SAP's remaining SaaS and PaaS solutions that supplement and extend the functional coverage of the Cloud ERP Suite. |
4 | Infrastructure as a service (IaaS): The major portion of IaaS comes from SAP HANA Enterprise Cloud. |
Financial Highlights1
First Quarter 2025
In the first quarter, current cloud backlog grew by 28% to €18.20 billion and was up 29% at constant currencies. Cloud revenue was up 27% to €4.99 billion and up 26% at constant currencies. Cloud ERP Suite revenue was up 34% to €4.25 billion and up 33% at constant currencies.
Software licenses revenue decreased by 10% to €0.18 billion and was down 10% at constant currencies. Cloud and software revenue was up 14% to €7.94 billion and up 13% at constant currencies. Services revenue was down 1% to €1.07 billion and down 2% at constant currencies. Total revenue was up 12% to €9.01 billion and up 11% at constant currencies.
The share of more predictable revenue increased by 2 percentage points to 86%.
IFRS cloud gross profit was up 31% to €3.72 billion. Non-IFRS cloud gross profit was up 31% to €3.74 billion and was up 30% at constant currencies. IFRS Cloud gross margin was up 2.3 percentage points to 74.5%, non-IFRS cloud gross margin up 2.5 percentage points to 75.0% and up 2.6 percentage points at constant currencies.
IFRS operating profit increased to €2.33 billion and IFRS operating margin was up 35.7 percentage points to 25.9%. IFRS operating profit growth was positively impacted by a restructuring expense decline of €2.2 billion as compared to Q1 2024 in connection with the 2024 transformation program. Non-IFRS operating profit was up 60% to €2.46 billion and was up 58% at constant currencies, non-IFRS operating margin increased by 8.2 percentage points to 27.2% and was up 8.1 percentage points to 27.1% at constant currencies. Both, IFRS and non-IFRS operating profit growth benefitted from the operational efficiencies realized through successful execution of the 2024 transformation program.
IFRS earnings per share (basic) increased to €1.52. Non-IFRS earnings per share (basic) increased 79% to €1.44. IFRS effective tax rate was 27.2% and non-IFRS effective tax rate was 29.4%. Both were mainly driven by a temporary inability to offset withholding taxes in Germany due to carryforward of tax losses from prior year. The IFRS effective tax rate is lower than the non-IFRS effective tax rate due to tax benefits from tax-exempt income.
Operating cash flow in the first quarter was up 31% to €3.78 billion and free cash flow increased by 36% to €3.58 billion. The increase was mainly attributable to the higher profitability and the positive development of working capital (outside of restructuring related impacts), which was partially offset by higher payouts for share-based compensation and restructuring.
Share Repurchase Program
In May 2023, SAP announced a share repurchase program with an aggregate volume of up to €5 billion and a term until December 31, 2025. As of March 31, 2025, SAP had repurchased 18,985,135 shares at an average price of €164.79 resulting in a purchased volume of approximately €3.1 billion under the program. Additionally, the third tranche of the program was completed on April 08, 2025, with a purchased volume of approximately €1.5 billion.
2024 Transformation Program: Focus on scalability of operations and key strategic growth areas
In January 2024, SAP announced a company-wide restructuring program which concluded as planned in the first quarter 2025. Overall expenses associated with the program are approximately €3.2 billion. Restructuring payouts amounted to €2.5 billion for the full-year 2024 and €0.3 billion for the first quarter 2025. Approximately €0.4 billion is expected to be paid out in the remainder of 2025.
Business Highlights
In the first quarter, customers around the globe continued to choose "RISE with SAP" to drive their end-to-end business transformations. These customers included: Alte Leipziger-Hallesche, East Japan Railway, Federal Employment Agency (Bundesagentur für Arbeit), Heijmans, HUGO BOSS, Hyundai Motor Company, Kia Corporation, Mazda Motor, Molson Coors Beverage Company, Piramal Pharma, SYENSQO, TOPPAN, Tyson Foods, Villeroy & Boch Group, Webasto Group, and WWZ Energie.
Climeworks, HMM, LG Energy Solution, Lion, Nanometrics, and Samyang Foods went live on SAP S/4HANA Cloud in the first quarter.
Gymshark, HARGASSNER, Oki Electric Industry, Sciens Building Solutions, Stegra, and VFS Global chose "GROW with SAP", an offering helping customers adopt cloud ERP with speed, predictability, and continuous innovation.
Key customer wins across SAP's solution portfolio included: ACTION, Booking, DKSH, Energy Queensland, Ferring Pharmaceuticals, KION GROUP, Klüber Lubrication München, The Kraft Heinz, Maastricht University, MARELLI Europe, NEC Corporation, Tibnor, and WEG.
Alfred Ritter, Axpo Services, BASF Coatings, Deutsche Bahn, Parle Biscuits, Ravensburger, and Wipro went live on SAP solutions.
In the first quarter, SAP's cloud revenue performance was particularly strong in APJ and EMEA and robust in the Americas region. Brazil, Chile, Germany, India, Italy, South Korea and Spain had outstanding performances, while Canada, China, France, Japan, Singapore and the U.S. were particularly strong.
On February 13, SAP announced SAP Business Data Cloud, a groundbreaking solution that unifies SAP and third-party data throughout an organization, providing the trusted data foundation organizations need to make more impactful decisions and foster reliable AI.
On February 20, SAP proposed a dividend of €2.35 per share for fiscal year 2024 representing a year-over-year increase of 6.8% compared to the regular dividend paid for fiscal year 2023. The dividend is subject to shareholder approval at the upcoming AGM scheduled for May 13, 2025.
Outlook 2025
Financial Outlook 2025
While the prevailing dynamic environment implies elevated levels of uncertainty and reduced visibility, SAP currently continues to expect:
- €21.6 – 21.9 billion cloud revenue at constant currencies (2024: €17.14 billion), up 26% to 28% at constant currencies.
- €33.1 – 33.6 billion cloud and software revenue at constant currencies (2024: €29.83 billion), up 11% to 13% at constant currencies.
- €10.3 – 10.6 billion non-IFRS operating profit at constant currencies (2024: €8.15 billion), up 26% to 30% at constant currencies.
- Approximately €8.0 billion free cash flow at actual currencies (2024: €4.22 billion)
- An effective tax rate (non-IFRS) of approximately 32% (2024: 32.3%)2.
The company also continues to expect current cloud backlog growth at constant currencies to slightly decelerate in 2025.
While SAP's 2025 financial outlook for the income statement parameters is at constant currencies (including an average exchange rate of 1.08 USD per EUR), actual currency reported figures are expected to be impacted by currency exchange rate fluctuations as the company progresses through the year, as reflected in the table below.
Currency Impact Assuming March 31, 2025. Rates Apply for 2025
In percentage points | Q2 2025 | FY 2025 |
Cloud revenue growth | -1.0pp | -2.0pp |
Cloud and software revenue growth | -1.0pp | -0.5pp |
Operating profit growth (non-IFRS) | 0.0pp | -1.0pp |
This includes an exchange rate of 1.08 USD per EUR.
Additional Information
This press release and all information therein is preliminary and unaudited. Due to rounding, numbers may not add up precisely. The Q1 2025 Quarterly Statement can be downloaded from: https://www.sap.com/investors/sap-2025-q1-statement
SAP Annual General Meeting of Shareholders
The Annual General Meeting of Shareholders will take place on May 13, 2025, as a virtual event. The whole event will be webcast on the Company's website and online voting options will be available for shareholders. Further details can be found at https://www.sap.com/agm.
Financial Analyst and Investor Conference
SAP will hold a financial analyst event on Wednesday, May 21st, in conjunction with SAP Sapphire & ASUG Annual Conference Orlando.
SAP Performance Measures
For more information about our key growth metrics and performance measures, their calculation, their usefulness, and their limitations, please refer to the following document on our Investor Relations website: https://www.sap.com/investors/performance-measures
Webcast
SAP senior management will host a financial analyst conference call on Tuesday, April 22nd at 11:00 PM (CEST) / 10:00 PM (BST) / 5:00 PM (EDT) / 2:00 PM (PDT). The conference will be webcast on the Company's website at https://www.sap.com/investor and will be available for replay. Supplementary financial information pertaining to the first quarter results can be found at https://www.sap.com/investor
About SAP
As a global leader in enterprise applications and business AI, SAP (NYSE: SAP) stands at the nexus of business and technology. For over 50 years, organizations have trusted SAP to bring out their best by uniting business-critical operations spanning finance, procurement, HR, supply chain, and customer experience. For more information, visit www.sap.com.
For customers interested in learning more about SAP products: | |
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This document contains forward-looking statements, which are predictions, projections, or other statements about future events. These statements are based on current expectations, forecasts, and assumptions that are subject to risks and uncertainties that could cause actual results and outcomes to materially differ. Additional information regarding these risks and uncertainties may be found in our filings with the Securities and Exchange Commission, including but not limited to the risk factors section of SAP's 2024 Annual Report on Form 20-F.
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1 The Q1 2025 results were also impacted by other effects. For details, please refer to the disclosures on page 19 of this document.
2 The effective tax rate (non-IFRS) is a non-IFRS financial measure and is presented for supplemental informational purposes only. We do not provide an outlook for the effective tax rate (IFRS) due to the uncertainty and potential variability of gains and losses associated with equity securities, which are reconciling items between the two effective tax rates (non-IFRS and IFRS). These items cannot be provided without unreasonable efforts but could have a significant impact on our future effective tax rate (IFRS).
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