23 October 2025
If you are covering SAP’s latest financial results, please find below a comment from Ben Barringer, head of technology research at Quilter Cheviot:
“SAP delivered a solid set of numbers, coming in line with expectations. Third quarter revenues were up 11%, while cloud-based revenues were up 27%, as the company continues to transform its customers base and clear the backlog of businesses moving onto the cloud. That said, the guidance for this year has been trimmed slightly as that cloud growth will be impacted by a slightly slower conversion rate and the US government shutdown. However, this should resolve itself by 2026 and we should see a reacceleration.
“SAP continues to be one of the AI winners, however. It now has a whole host of AI agents that businesses can use and continues to innovate and look for new avenues of revenue. The business isn’t worrying about how many AI agents its has, but it will need to consider the value these are bringing and providing to customers. That said, SAP is experienced in this area and not only has a host of AI solutions for business customers, but it is also eating its own cooking and implementing AI efficiencies across its own company. This is helping to control costs at the same time as that cloud backlog is clearing. Given software companies are under pressure due to the economic backdrop, SAP remains a high-quality defensive tech company.”
