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Investing.com -- SAP on Thursday topped quarterly top-line expectations, helped by cloud backlog growth and demand for its artificial intelligence platform for businesses. The German software giant also slightly raised its full-year adjusted operating profit guidance to reflect recent acquisitions.
U.S.-listed shares of the company rose 5.1% after hours, while its Germany-listed shares rose 6% by 03:43 ET (07:43 GMT).
Founded in 1972, SAP is Germany’s third largest firm by market capitalization. It is a leader in developing enterprise resource planning systems, or unified software platforms that organizations use to manage operations across finance, procurement, human relations, supply chain, and customer experience.
Walldorf-based SAP earned non-IFRS profit per basic share, which strips out one-off items, of 1.59 euros on revenue of 9.88 billion euros ($11.24 billion) for Q2 2026. Analysts had been expecting revenue of 9.85 billion euros. Non-IFRS operating profit in constant currency rose 9% Y/Y to 2.81 billion euros ($3.20 billion).
Its current cloud backlog (CCB) at the end of the quarter stood at 22.90 billion euros ($26.05 billion), up 26% in constant currency.
"The acceleration in CCB to +26%, implying stable CCB ex M&A vs Q1 at +25%, was the main positive surprise vs consensus at 24.3%, and is at odds vs the end 2026 guidance of slight deceleration," Bank of America analysts said.
The bank reiterated its Buy rating on the stock, while trimming price targets to €208 from €210 and to $237 from $245.
"This performance is underpinned by our Autonomous Enterprise strategy with strong momentum across our Autonomous Suite as well as our Business AI Platform. Customers are choosing SAP to enable accurate and compliant AI outcomes grounded in their most critical business processes and data," top boss Christian Klein said in a statement.
SAP’s results come at a time when the software stocks on both sides of the Atlantic have faced intense pressure from artificial intelligence. Investors are concerned that generative AI models and agentic tools will soon be able to perform many of the operations that software companies do, such as coding, data analysis, and automation of workflows. Companies in the space have noticed, and have raced to create agentic tools themselves, including SAP with its Joule and Business AI platforms.
As software stocks have declined, chipmakers have been the major beneficiary of the AI trade. The Philadelphia Semiconductor Index - a key barometer of U.S. chip stocks - has surged 74.3% YTD, a significant outperformance compared to the 17.5% YTD slide in the iShares Expanded Tech-Software Sector ETF - an exchange-traded fund that tracks an index composed of U.S. stocks in the software industry. SAP’s U.S.-listed stock has slid nearly 40% YTD.
Looking at SAP’s outlook, the company now expects full-year non-IFRS operating profit in consonant currency of 11.9 billion euros to 12.3 billion euros ($13.54 billion to $13.99 billion) from 11.8 billion euros to 12.2 billion euros previously.
The bump to the guidance reflected the dilutive impact of two acquisitions completed earlier this month. The company bought high-performance data lakehouse platform Dremio and Prior Labs, a developer of an AI architecture called Tabular Foundation Models.
Vahid Karaahmetovic contributed to this report.
