By Leo Marchandon
Oct 21 (Reuters) – Europe’s largest tech company SAP achieved a €10 billion ($11.2 billion) quarterly revenue milestone for the first time on Wednesday, while reporting a 26% rise in current cloud backlog and moving its 2026 revenue expectations to the upper end of its outlook range.
Cloud revenue rose 26% to €6.67 billion in the third quarter while non-IFRS operating profit rose 18% to €3.03 billion. SAP’s cloud backlog at constant currencies grew 26% to €24.14 billion ($27.11 billion), ahead of the 24% to 25% growth UBS had forecast.
SAP’s order book is watched as a gauge of enterprise tech spending worldwide as its software suite runs accounting and payroll at many of the world’s biggest companies. SAP held its operating profit outlook at €11.8 billion to €12.2 billion at constant currencies, a range trimmed in July for its recent acquisitions.
A miss on the measure in January sent the shares down 15% in one day.
SAP said growth in cloud revenue was helped by customers returning from “financial distress.” Its profit margin widened to 29.5% from 28.3% while free cash flow rose 36% to €1.72 billion.
SAP now expects 2026 subscription revenue — access to software customers rent remotely rather than buy and run themselves — toward the top of its €25.8 billion to €26.2 billion forecast, up 23% to 25%. Including the declining classic licence business, it sees revenue of €36.3 billion to €36.8 billion, up 12% to 13%, at the top of its range. SAP kept its yearly operating profit outlook of €11.8 billion to €12.2 billion at constant currencies.
CEO Christian Klein called it “an outstanding quarter.” Customers are “investing in the technology behind” the company’s AI strategy, he said. New cloud customers included AstraZeneca, Infineon and Henkel.
($1 = 0.8903 euros)
(Reporting by Leo Marchandon in Gdansk; Editing by Daniel Wallis and Rod Nickel)
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