German software giant SAP (SAP, Financial) unveiled its fourth-quarter results showing cloud computing sales slightly surpassed analysts' expectations. The company reported a 27% year-over-year increase in cloud revenue, reaching €4.71 billion (approximately $4.9 billion), exceeding the average analyst forecast of €4.68 billion.
Overall, SAP's fourth-quarter sales rose 11% to $9.377 billion, with basic earnings per share increasing by 31% to $1.37. Operating profit was about $2.016 billion, up 6% year-over-year. SAP continues to promote its cloud computing services powered by artificial intelligence (AI), encouraging customers to shift from traditional on-premise servers to cloud-based IT infrastructure, which typically results in higher average spending per customer.
Following the earnings announcement, SAP's stock rose 3.1% before trimming gains to 0.4% at €262.55 in Frankfurt. The company also revised its cloud sales forecast for 2025 to €21.6 billion to €21.9 billion, up from a previous forecast of over €21.5 billion. Its latest cloud backlog, reflecting future revenue to be recognized over the next 12 months, rose 29% to €18.1 billion.
SAP's AI strategy has significantly contributed to its standing as Europe's most valuable tech company, surpassing ASML. The company's offerings, such as SAP AI Core and AI Foundation integrated with its Business Technology Platform, provide comprehensive AI application development and deployment tools, further cementing its market position.
