German Software Giant SAP Reports Record Quarterly Revenue as AI Strategy Drives Cloud Growth
SAP's Q3 total revenue surpassed €10 billion for the first time, with cloud backlog growing 26%. The company cites AI as the main driver behind customers' move to the cloud.
SAP SE, Europe’s largest software company, reported a record-breaking third quarter on October 21, 2026. Total sales reached €10.27 billion (approximately $11.2 billion), marking the first time the company has surpassed the €10 billion threshold in a single quarter. This figure outperformed analyst expectations of €10.10 billion. Adjusted earnings per share came in at €1.89, beating the consensus estimate of €1.83.
The strong performance of its cloud business was the primary engine behind this new revenue record. SAP’s third-quarter cloud revenue increased by 25% year-over-year to €6.67 billion. A more forward-looking metric, the current cloud backlog (contracted but unrecognized revenue), surged 26% to €24.11 billion, exceeding the 24% to 25% growth range forecast by analysts. Non-IFRS operating profit also rose to €3.03 billion, up 18% from the same period a year earlier.
Chief Executive Christian Klein explicitly stated during the earnings call that “AI was the main driver behind customer’s move to the cloud during the quarter.” This assertion aligns with the company’s recently promoted “autonomous enterprise” strategy. A key component of this strategy is Joule, an AI agent tool designed to act as a conversational interface layer connecting to over 70 AI models, working alongside rather than just within existing SAP applications. Klein revealed that hundreds of customers have signed up for new subscriptions to access Joule.
Despite the impressive results, SAP management remains cautious about the future economic environment. Chief Financial Officer Dominik Asam noted that the fourth quarter will be critical in determining how the rest of the financial year lands. He warned that the company is operating amid a gloomy economic backdrop, characterized by rising oil prices and U.S. interest rates that are “starting to develop teeth.” Asam also mentioned that part of the quarter’s cloud growth was driven by customers returning from “financial distress.”