German Software Giant SAP Raises 2026 Cloud Revenue Guidance as Q3 Cloud Backlog Surges 28%
SAP's Q3 cloud backlog reached €24.1 billion, prompting the company to raise its 2026 cloud revenue guidance to the upper end of its forecast range.
German enterprise software company SAP announced on October 22, 2026, that it is raising its full-year 2026 cloud revenue guidance to the upper end of its existing forecast range (€25.8 billion to €26.2 billion). This adjustment follows strong quarterly performance: in the three months ending in September, SAP's cloud backlog—contracted cloud business awaiting recognition as revenue—grew 28% year-over-year to €24.1 billion, or 26% at constant currencies.
Specific financial data shows total revenue for the third quarter increased by 13% to €10.27 billion, with cloud revenue rising 26% to €6.67 billion. The adjusted operating margin improved to 29.5% from 28.3% a year earlier, and free cash flow climbed 36% to €1.72 billion. Management maintained its forecast for full-year adjusted operating profit of €11.8 billion to €12.2 billion and expects free cash flow of approximately €10 billion.
Notably, SAP pointed out that cloud revenue growth benefited from a multi-quarter catch-up from customers returning from financial distress, while operating profit growth also gained from prior-year costs linked to tax litigation and workforce transformation. Additionally, the company expects total revenue growth to accelerate in 2027, although operating expenses will increase by 80% to 90% of total revenue growth, reflecting ongoing cost pressures during the migration to cloud services. Following the news, SAP shares traded up 2.4% in premarket Thursday.