Oct 21, 2026 earnings call — Autonomous enterprise and Joule AI drive cloud growth
Cloud backlog reached €24.1 billion, up 26%, and cloud revenue was €6.7 billion, up 25%.
Revenue $11.5B (est $11.4B) · EPS $2.18 (est $2.03)
Key quotes
"Joule Work. This is where enterprise AI finally becomes usable. Our 400 million SAP users can now work with SAP in natural language and Joule gets the job done."
"Cloud revenue grew to approximately €6.7 billion up 25% helped by several 1-off positive effects, which added approximately 1 percentage point of growth in Q3."
"At SAP, the customer's data remains the customer's data. We never upload customer data or process IP into large language models. Not for training, not for model improvement, not for any purpose."
Analyst Q&A 12
Q4 cloud backlog caution
Q (Adam Wood · Morgan Stanley): Analyst asked why management kept a cautious fourth-quarter cloud backlog guide and whether pipeline or customer behavior justified more optimism.
A: Management said half of bookings are still to be executed in Q4 and the macro backdrop is not great. He emphasized the guidance is a range not a point, noted commodity and interest-rate pressures, and suggested the upper end of the range might be around 24%.
"I would say it is probably reasonable to not assume that the macro is super conducive in Q4." — Dominik Asam (CFO)
Which products boost backlog
Q (Toby Ogg · JPMorgan): Analyst asked if the backlog is growing faster than internal expectations and which products are surprising on the upside and why.
A: Management said strong demand is coming from RISE migrations, Joule agents, and the Business Data Cloud (BDC), plus better partnerships and GSIs accelerating migrations. He said new AI capabilities and BDC features are creating big customer excitement and will expand to non-SAP data in Q1.
"Now in Q1, we will be able to even, you know, auto generate non SAP data products, put it into the knowledge graph, and we can extend the ontology layer almost automated also for non SAP data." — Christian Klein (CEO)
AI agents accuracy and credits
Q (Charles Brennan · Jefferies): Analyst asked how far away agent response time and accuracy improvements are, and whether AI credits are affecting P&L dynamics between CCB bookings and revenue.
A: Management said accuracy is an ongoing effort and they are tracing every query through data and ontology layers; they are making good progress but work remains on response times and accuracy. On credits, they said migration/AI credits are amortized over contract life so they do not create an immediate P&L shock, and a move to more consumption-based models will be gradual as they sell outcomes tied to adoption.
"I would say first of all, it is very important to note that whenever we give credits to a customer, we basically amortize these so they are kind of spread over the life of the contract." — Dominik Asam (CFO)
Regional AI adoption differences
Q (Jackson Ader · KeyBanc): Analyst asked whether the Americas could catch up to EMEA and APAC in cloud revenue growth as AI adoption patterns differ by region.
A: Management said regional performance on AI and data is broadly consistent across regions over the last four quarters. He noted North America is often the front-runner on AI and industry co-development, while EMEA and APJ are following well; North America is also more penetrated in cloud.
"No. I mean, when I look at the regional performance both on AI and data, I mean, the regions really perform equally strong." — Christian Klein (CEO)
Q4 to full-year revenue bridge
Q (Bernstein): Analyst asked what factors bridge the faster year-to-date revenue growth to the full-year revenue guide and why implied Q4 cloud revenue growth is lower than Q3.
A: Management said visibility into Q4 cloud revenue is high and implied cloud revenue growth is around 23%. He cited easier Q3 comps last year, a small SmartRecruiters contribution in last year's Q3, a CCB decel from 27% to 25% in Q4 last year, unpredictable license timing, and services running about -5% constant currency at roughly a €1 billion per-quarter run rate as factors.
"I mean, you are absolutely right that our visibility for Q4 cloud revenue terms, which is, of course, the key driver of total revenues, is quite high at this stage." — Dominik Asam (CFO)
Migration credits and cash flow
Q (Michael Briest · UBS): Analyst asked whether migration credits are being used by customers and whether that affects Q4 or free cash flow.
A: Management said migration credits will affect free cash flow at some point but not enough to make him nervous about the full-year guidance of €10 billion. He also noted higher accounts receivable in Q3 and said the company will tighten collections to ensure cash is collected.
"Indeed, I mean, we always pointed out to the fact that migration credits at some point in time will affect our free cash flow, not to the degree that I would feel nervous about the full year guidance of €10 billion." — Dominik Asam (CFO)
Model routing and cost savings
Q (Johannes Schaller · Deutsche Bank): Analyst asked how model routing and choosing different AI models will affect gross margin and whether savings can be kept or passed to customers.
A: Management said they evaluate each agent use case for outcome and price and are increasingly switching to open-weight models. They are also running a large AI automation initiative across cloud delivery and operations to cut third-party contractor costs and expect healthy cloud gross-margin development over time.
"Yeah. Absolutely right. Johannes, I mean, obviously, we are also now checking every agent use case we are shipping also on what is the best model and not only from a performance from an outcome but also from a price perspective." — Christian Klein (CEO)
headless software and partnership strategy
Q (Ben Castillo · BNP Paribas): Analyst asked whether software will go more headless (plug-in access) vs retaining SAP's AI UX, and about being model-agnostic versus exclusive partnerships and customer validation of that strategy.
A: No answer from management is recorded in the transcript for this question.
Margins outlook and operating leverage
Q (Frederic Boulan · BofA): Analyst asked for more detail on margin moving parts, operating leverage, and ability to expand margins next year.
A: Management said they run an internal all-in AI program driving productivity gains across R&D, delivery, sales, finance and HR, and expect up to €3 billion of efficiency gains over the next two years. They will also optimize model choice, automate delivery processes, adjust third-party contracts, and use other levers (sovereign cloud, retail, acquisitions) while keeping total operating expense growth contained to about 80%–90% of top-line growth.
"I mean, you know, we are working on an all in on AI program, you know, internally at SAP." — Christian Klein (CEO)
Transactional business trend
Q (Evercore): Analyst asked whether the transactional business that was stabilizing can continue to stabilize and become a tailwind into 2027.
A: Management said 'tailwind' would be too strong because transactional growth is still far below group-average cloud growth. He said the transactional business has moved from slightly negative toward some positive territory, which reduces the headwind rather than creating a tailwind.
"Tailwind is a strong word because it might imply that it is higher than the group average cloud growth, which is definitely not." — Dominik Asam (CFO)
Concur competitive position
Q (Citizens): Analyst asked about Concur's travel-and-expense business given new competitors growing fast.
A: Management said Concur is a sizable, stable business deeply integrated into SAP finance solutions and focused on expense-to-pay. He noted high agent adoption on Concur, some minor booking-side competition, and upcoming partnerships with credit-card providers and airlines, concluding the business is intact and healthy.
"This is predominantly focused on the expense to pay." — Christian Klein (CEO)
Backlog: migration vs AI/BDC
Q (Citi): Analyst asked whether backlog is skewing to migration as ECC maintenance deadline approaches, or whether AI and BDC are growing share from a small base.
A: Management said RISE journeys now combine migration to S/4 and line-of-business solutions with BTP to build a harmonized SAP and non-SAP data layer. He said RISE contracts are getting richer with AI and BTP embedded, and in every RISE deal they are leading with AI and including the data layer.
"You see the consistency that in every RISE deal, we are leading with AI, and the data layer is always part of it." — Christian Klein (CEO)