SAP reported third-quarter 2026 results that beat Wall Street expectations across the board, with adjusted earnings of $2.14 per share against analyst estimates of $1.83.
Revenue came in at $11.64 billion for the quarter, topping consensus estimates of $10.10 billion by a significant margin.
Total quarterly revenue reached €10.3 billion, up 12% year on year, marking the first time in SAP’s history that a single quarter crossed the €10 billion threshold.
Cloud revenue grew 25% in constant currencies to €6.7 billion, driven by accelerating enterprise adoption of SAP’s artificial intelligence capabilities.
The company’s growing cloud backlog reached €24.1 billion, a 26% increase that signals continued strong demand from enterprise customers migrating to the cloud.
Cloud ERP suite revenue rose 28% and represented 89% of total cloud revenue, reflecting the deepening integration of SAP’s core software with its cloud platform.
Operating profit grew 18% to more than €3 billion, as the company continued scaling its cloud business while managing costs across the enterprise.
CEO Christian Klein described the quarter in emphatic terms, stating that “Q3 was an outstanding quarter,” adding that customers are getting access to SAP’s latest AI capabilities with an “incredible” response from the market.
Klein noted that AI was the primary driver behind customers accelerating their move to the cloud during the quarter, with AI helping to speed up RISE with SAP cloud migrations in particular.
According to IDC data cited by the company, SAP is growing approximately 11 percentage points faster than the broader market, a figure executives used to underscore the company’s expanding competitive position.
CFO Dominik Asam acknowledged the strong quarter but flagged that a slight deceleration in growth was attributable to continued political and macroeconomic uncertainty in global markets.
Asam also noted that several one-off positive effects added approximately one percentage point to cloud revenue growth in Q3, a factor analysts will likely strip out when modelling future quarters.
Cloud gross margin declined 0.7 percentage points year on year during the quarter, and Asam indicated that several levers would be needed to stabilise that metric going forward.
Looking ahead to Q4, which management described as the company’s largest bookings period, SAP expects cloud revenue growth to moderate to approximately 23%, down from 25% in the third quarter.
Asam pointed to macro uncertainty as a potential headwind for Q4 performance, while also noting that the company’s rapidly expanding base continues to grow in absolute terms each year despite the percentage-rate pressure.
