(Frankfurt) — SAP SE, the German enterprise software giant, reported second-quarter 2025 results that outpaced market expectations, with strong revenue growth, higher profitability, and surging cash flow. The company’s performance underscored its pivotal role in the ongoing wave of digital transformation and cloud adoption across industries.
SAP operates as one of the world’s leading providers of enterprise software, delivering ERP (Enterprise Resource Planning) systems, cloud solutions, platform-as-a-service (PaaS), software-as-a-service (SaaS), infrastructure services, and professional consulting. Its products support core operations for businesses across sectors including manufacturing, finance, retail, healthcare, and the public sector.
In Q2 2025, SAP posted total revenue of €9.03 billion, up 9% year-on-year and 12% at constant currencies. The performance came despite continued global economic headwinds.
Cloud revenue was the key growth driver, increasing 24% YoY and 28% at constant currencies. Within this, the Cloud ERP Suite, which includes RISE with SAP and integrated SaaS/PaaS ERP platforms, grew 30% YoY (up 34% at constant currencies), confirming its role as SAP’s growth engine.
The Extension Suite, designed to expand ERP capabilities, grew 3% YoY (7% at constant currencies), while Infrastructure as a Service (IaaS)—including SAP HANA Enterprise Cloud—declined 37% YoY (35% at constant currencies), signaling ongoing challenges in that segment.
Gross profit in the cloud division rose by 26–27% YoY, with gross margins reaching 74–75%, depending on IFRS or non-IFRS reporting. Operational efficiency further boosted profitability.
Operating profit (non-IFRS) increased 32% YoY (35% at constant currencies), while IFRS operating profit also rose sharply, reflecting successful cost control and restructuring measures.
Earnings per share surged: IFRS EPS jumped 91% to €1.45, while non-IFRS EPS climbed 37% to €1.50.
Operating cash flow reached €2.58 billion, a 71% YoY increase, and free cash flow soared by 83% compared with Q2 2024.
For the first half of 2025, total revenue stood at €18.04 billion, up 10% YoY (12% at constant currencies). Cloud and software revenue hit €15.90 billion, compared to €14.13 billion in H1 2024, representing growth of 13–14% on a constant currency basis.
The Cloud ERP Suite contributed €8.67 billion in H1 2025 revenue, a 32% YoY increase (33% at constant currencies), further cementing its dominance. By contrast, the Extension Suite delivered slower mid-single-digit growth, while IaaS continued to contract.
Predictable revenue streams also grew in significance, with 86% of total Q2 revenue now classified as recurring or subscription-based, compared with 84% last year.
SAP highlighted the impact of its internal transformation program launched in 2024, noting gains in efficiency and margins. Management reiterated its focus on disciplined execution to sustain profitability.
The company reaffirmed its 2025 outlook, guiding for cloud revenue between €21.6 billion and €21.9 billion at constant currencies—an increase of 26–28% from 2024.
Shareholder confidence has been buoyed by these results, with SAP emphasizing that its hybrid model—balancing resource-driven earnings with future-oriented cloud investments—positions it well to withstand macroeconomic volatility.
