Temple Size pay the price of disappointed expectations about the cloud: title of the German software giant collapses di more than 15%, stopping at 167 euros per share, the worst daily performance since October 2020. A slump that drags down the Frankfurt Stock Exchange (-0,99%) in negative territory, while the rest of theEurope continues to move in positive territory. SAP shares, which started from a record above 283 euros in February 2025, have lost about a third of their value, while the Dax in the same period it gained over 14%.
The German stock market is also weighed down by Deutsche Bank, which drops almost 2% despite the record accounts of 2025, penalized by the investigations for suspected money laundering linked to the Russian oligarch Novel Abramovich.
SAP reports fourth-quarter 2025 results: earnings up, but cloud computing falls short of expectations.
In fourth quarter of the 2025, Sap has recorded a Useful adjusted net income grew by 17% to almost 1,9 billion euros, exceeding analysts' estimates by approximately 8%.operating profit non-Ifrs rose 16% to 2,83 billion, while the turnover reached $9,68 billion, up 3% (9% at constant exchange rates). Cloud revenue reached $5,6 billion, up 19% and in line with expectations.
However, investors are worried about the cloud order book, The so-called Current Cloud Backlog, which grew 16% in the quarter to 21,1 billion, well below the 26% growth expected by the market. SAP explained that "large transformation agreements and termination clauses for convenience have slowed the growth of the backlog by about one percentage point,” underlining how the structure of the contracts is influencing the short-term outlook.
According to Jefferies, the slightly lower-than-expected growth is linked to a higher share of government contracts, subject to termination clauses, and larger cloud orders concentrated in later years, which reduced the immediate contribution to the backlog by about 1%.
2025 Annual Performance: Revenue and Operating Profit Growing
The whole of 2025 closed with revenues for 36,8 billion euros (+8%), a Useful operating profit of 10,4 billion (+28%) and net profit of 7,2 billion (+36%). Total cloud revenues reached 21,02 billion (+26% at constant currencies), while the strategic portfolio Cloud Erp Suite rose 32% to $18,12 billion. The share of predictable revenue—including cloud subscriptions and support contracts—increased to 86% from 83% the previous year. backlog total at the end of the year amounted to 77,3 billion (+22%). edge operating reached 28,3%, with an increase of 4,5 percentage points, and the free cash flow It nearly doubled to $8,24 billion, driven by higher profitability and lower restructuring payments.
Management has announced a new share buyback programme 10 billion, to be completed by 2027.
SAP 2026 Forecast: Moderate Growth and Solid Free Cash Flow
For the 2026, the German giant plans a cloud revenue growth between 23% and 25% At constant currencies, this is equal to a value between 25,8 and 26,2 billion euros. Total cloud and software revenue is expected to be between 36,3 and 36,8 billion (+12/-13%), while operating profit is estimated between 11,9 and 12,3 billion (+14/-18%). The free cash flow is expected to be around 10 billion, up from 8,24 billion in 2025. Growth will also be supported by Sap Business AI, included in two-thirds of the quarter's cloud orders, and widespread adoption ofartificial intelligence in the Erp Suite.
Analysts confirm confidence but highlight critical issues regarding the cloud
Despite today's drop, analysts maintain positive ratings on the stock. Jefferies confirms the “Buy” rating with a target price of 290 euros, Goldman Sachs maintains the “Buy” at 320 euros, while JP Morgan SAP confirms its "Overweight" rating at €290, while highlighting that its cloud order book represents a critical issue. In summary, SAP shows solid numbers and growth forecasts, but the market remains wary of the speed of cloud order expansion and its ability to maintain a sustainable growth rate.
