Potential Slowing Down of SAP Progress
As the technology giant SAP prepares to release its Q2 earnings on July 22, 2025, analysts are expressing a generally positive outlook for the company. Despite some forecasted challenges, such as currency headwinds, experts predict a solid quarter for SAP.
The transformation of SAP towards cloud-based services has been a significant factor in its recent success. Analysts are optimistic about the company's ability to deliver strong results, driven by its cloud business. The bar for a positive surprise is high following previous earnings surprises and share price gains.
According to available information, SAP is expected to achieve €10.5 billion in revenue, reflecting a 17% increase year-over-year. While specific cloud revenue figures are not provided, SAP's cloud business has been a key driver of its recent performance. The company guided a 26%-28% constant-currency cloud revenue growth for 2025, with Q1 showing a 26% growth rate.
The non-IFRS operating profit is expected to increase by 26% to €2.44 billion in Q2. The growing importance of SAP's broad solution portfolio is emphasized by analysts, with cloud and software revenues projected to rise by 11% to around €8 billion in Q2.
One of the key drivers of this growth is the anticipated increase in cloud revenue, with analysts expecting around €5.1 billion for Q2, representing a 24% year-over-year increase. This growth is expected to be driven by SAP's expanding customer base and the increasing adoption of cloud services.
Despite some forecasted challenges, analysts consider SAP's stock a "top pick" despite potential challenges. Some analysts view the anticipated slowdown in growth as a temporary hurdle, while others see it as an opportunity for the company to focus on long-term strategies.
In conclusion, while the actual performance of SAP's Q2 2025 earnings will not be known until the official release on July 22, analysts remain optimistic about the company's prospects. The transformation towards cloud-based services, the expanding customer base, and the increasing adoption of cloud services are all contributing to a positive outlook for SAP.
The transformation of SAP towards cloud-based services is a significant factor in its business growth, with analysts projecting a 24% year-over-year increase in cloud revenue for Q2, driven by the expanding customer base and the increasing adoption of cloud services. Furthermore, the growing importance of SAP's broad solution portfolio is emphasized by analysts, with the non-IFRS operating profit expected to increase by 26% to €2.44 billion in Q2 and cloud and software revenues projected to rise by 11%.
