SAP SE (SAP): Financial results for Q3 2026
SAP SE (SAP) furnished an SEC Form 6-K — earnings release. Exhibit 99.1 Quarterly Statement Q3 2026 Current cloud backlog of €24.1 billion, up 28% and up 26% at constant currencies Cloud revenue up 26% and up 25% at constant currencies Cloud ERP Suite revenue up 29% and up 28% at constant currencies Total revenue up 13% and up 12% at con
How this was made
The 30-second read
Why it matters
The earnings beat and updated guidance are likely to drive buying interest, especially among investors focused on cloud software exposure.
Market read
SAP's strong quarter and updated guidance could lift the broader enterprise software sector and reinforce bullish sentiment on cloud‑focused stocks.
What to watch
Potential headwinds from macro slowdown in Europe could temper longer‑term growth despite short‑term beat.
Current cloud backlog of €24.1 billion, up 28% and up 26% at constant currencies; cloud revenue up 26%; total revenue up 13%; IFRS and non-IFRS operating profit up 18%.
SAP reported double-digit growth in cloud revenue, total revenue, operating profit and free cash flow, while current cloud backlog rose 28%. The company updated its 2026 cloud revenue and cloud and software revenue outlook toward the upper end of their ranges and maintained its non-IFRS operating-profit and free-cash-flow outlook.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 current cloud backlogother | €24.14B | – | 28% |
| Q3 2026 SaaS/PaaS current cloud backlogother | €6.61B | – | 27% |
| Q3 2026 Cloud ERP Suite current cloud backlogother | €5.92B | – | 29% |
| Q3 2026 Extension Suite current cloud backlogother | €688M | – | 10% |
| Q3 2026 IaaS current cloud backlogother | €56M | – | –27% |
| Q3 2026 cloud revenueother | €6.67B | – | 26% |
| Q3 2026 software licenses revenueother | €147M | – | –9% |
| Q3 2026 software support revenueother | €2.43B | – | –5% |
| Q3 2026 cloud and software revenueother | €9.25B | – | 15% |
| Q3 2026 services revenueother | €1.02B | – | –4% |
| Q3 2026 total revenueother | €10.27B | – | 13% |
| Q3 2026 cloud gross profitother | €4.93B | – | 25% |
| Q3 2026 cloud gross marginother | 73.9% | – | –0.7pp |
| Q3 2026 gross profitother | €7.51B | – | 13% |
| Q3 2026 gross marginother | 73.1% | – | –0.4pp |
| Q3 2026 IFRS operating profitother | €2.93B | – | 18% |
| Q3 2026 non-IFRS operating profitnon-GAAP | €3.03B | – | 18% |
| Q3 2026 IFRS operating marginother | 28.5% | – | 1.1pp |
| Q3 2026 non-IFRS operating marginnon-GAAP | 29.5% | – | 1.2pp |
| Q3 2026 profit after taxother | €2.27B | – | 11% |
| Q3 2026 non-IFRS profit after taxnon-GAAP | €2.17B | – | 17% |
| Q3 2026 IFRS basic earnings per shareother | €1.96 | – | 14% |
| Q3 2026 IFRS diluted earnings per shareother | €1.94 | – | 14% |
| Q3 2026 non-IFRS basic earnings per sharenon-GAAP | €1.89 | – | 19% |
| Q3 2026 net cash flows from operating activitiesother | €1.92B | – | 28% |
| Q3 2026 free cash flownon-GAAP | €1.72B | – | 36% |
| Q1–Q3 2026 total revenueother | €29.70B | – | 10% |
| Q1–Q3 2026 cloud revenueother | €18.91B | – | 23% |
| Q1–Q3 2026 IFRS operating profitother | €8.31B | – | 14% |
| Q1–Q3 2026 non-IFRS operating profitnon-GAAP | €8.64B | – | 14% |
| Q1–Q3 2026 profit after taxother | €6.42B | – | 15% |
| Q1–Q3 2026 free cash flownon-GAAP | €7.97B | – | 11% |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Applications, Technology & SupportThe segment primarily generates revenue from cloud subscriptions and the sale of software licenses and support offerings. Dremio and Prior Labs are included in the segment. | €9.30B | – | – |
| Core ServicesThe segment supports customer transformation and innovation adoption, with revenue mainly generated from professional consulting services and premium support services. | €974M | – | – |
2026 outlook
- RevenueCloud revenue towards the upper end of the outlook range of €25.8 – 26.2 billion at constant currencies; cloud and software revenue towards the upper end of the outlook range of €36.3 – 36.8 billion at constant currencies.
- Operating expensesTotal operating expenses (non-IFRS) to grow at 80% to 90% of total revenue growth in 2027.
- Tax rateAn effective tax rate (non-IFRS) of approximately 29%.
- Note€11.8 – 12.2 billion operating profit (non-IFRS) at constant currencies.
- NoteApproximately €10 billion free cash flow at actual currencies.
- NoteConstant currencies current cloud backlog growth to slightly decelerate.
- NoteConstant currencies total revenue growth in 2026 to remain at similar levels as in 2025 (10.6%) and to accelerate in 2027.
- NoteCloud Customer Satisfaction (Cloud CSAT) to be in a range of 75% to 76%.
- NoteThe Employee Engagement Index to be in a range of 74% to 78%.
- NoteThe Business Health Culture Index (BHCI) to be in a range of 80% to 82%.
- NoteTo steadily decrease carbon emissions across the relevant value chain.
Capital returns
- In January 2026, SAP announced a new share repurchase program with an aggregate volume of up to €10 billion and a term until December 31, 2027.
- As of September 30, 2026, SAP had repurchased 25,205,983 shares at an average price of €164.79, resulting in a purchased volume of approximately €4.2 billion under the program.
- Q1–Q3 2026 purchase of treasury shares was €4,124 million.
- Q1–Q3 2026 dividends paid were €2,883 million.
What drove it
- Cloud revenue growth was positively impacted by several quarter-specific effects, mainly a multi-quarter revenue catch-up from customers returning from financial distress.
- Q3 total revenue included a contribution of €49 million from the acquisitions of Reltio, Dremio, and Prior Labs.
- Q3 IFRS and non-IFRS operating profit included negative contributions of €59 million and €39 million, respectively, from Reltio, Dremio, and Prior Labs.
- Q3 IFRS and non-IFRS operating-profit growth benefited from prior-year negative impacts of €0.1 billion each from a change in case law affecting SAP's other tax litigation and from a workforce transformation, both recorded in Q3 2025.
- Cloud revenue performance was particularly strong in APJ and EMEA and solid in the Americas region.
- Brazil, France, Germany, Italy, India, South Korea and Spain had outstanding performance, while Switzerland, the United Kingdom and the U.S. were particularly strong.
Concerns
- Q3 cloud gross margin was 73.9%, compared with 74.6% in Q3 2025.
- Q3 gross margin was 73.1%, compared with 73.5% in Q3 2025.
- Q3 software licenses revenue declined 9%, software support revenue declined 5%, and services revenue declined 4%.
- IaaS current cloud backlog declined 27%.
- SAP's current cloud backlog outlook for full-year 2026 is based on the assumption of a stable macroeconomic environment in the fourth quarter.
- SAP expects the constant-currencies software support revenue decline rate to accelerate in the coming years as customers transform to the cloud.
What to watch
- Execution against cloud revenue toward the upper end of the €25.8 – 26.2 billion constant-currency range.
- Execution against cloud and software revenue toward the upper end of the €36.3 – 36.8 billion constant-currency range.
- Whether current cloud backlog growth decelerates as expected during 2026.
- The effect of currency exchange-rate fluctuations, including the stated FY 2026 impacts of -1.5pp on cloud revenue growth, -1.0pp on cloud and software revenue growth, and -2.0pp on non-IFRS operating-profit growth if September 30, 2026 rates apply for 2026.
- The margin and revenue contributions from Reltio, Dremio, and Prior Labs.
- The pace of software-support revenue decline as customers transform to the cloud.
Balance sheet and cash flow
- Cash and cash equivalents as at September 30, 2026 were €9,364 million, compared with €8,220 million as at December 31, 2025.
- Financial liabilities were €2,053 million current and €8,535 million non-current as at September 30, 2026.
- Q1–Q3 2026 net cash flows from operating activities were €8,586 million, compared with €7,859 million in Q1–Q3 2025.
- Q1–Q3 2026 net cash flows from investing activities were €–2,332 million, compared with €–747 million in Q1–Q3 2025.
- Q1–Q3 2026 net cash flows from financing activities were €–5,227 million, compared with €–7,442 million in Q1–Q3 2025.
- Q1–Q3 2026 business combinations, net of cash and cash equivalents acquired, were €–1,829 million.
- Q1–Q3 2026 purchase of intangible assets and property, plant, and equipment was €–521 million.
Analysis
SAP delivered a strong Q3 2026, with total revenue of €10,270 million, up 13%, and cloud revenue of €6,668 million, up 26%. Current cloud backlog reached €24,144 million, up 28%, while Cloud ERP Suite current cloud backlog increased 29% to €5,924 million. The company attributed cloud growth in part to a multi-quarter revenue catch-up from customers returning from financial distress. Cloud revenue performance was particularly strong in APJ and EMEA and solid in the Americas region.
The revenue mix continued to shift toward cloud. Cloud and software revenue increased 15% to €9,249 million, while software licenses revenue declined 9% to €147 million, software support revenue declined 5% to €2,434 million, and services revenue declined 4% to €1,021 million. The Applications, Technology & Support segment reported total segment revenue of €9,297 million, while Core Services reported €974 million. SAP expects the constant-currencies software support revenue decline rate to accelerate in coming years as customers transform to the cloud.
Profit growth outpaced revenue growth. IFRS operating profit increased 18% to €2,930 million and non-IFRS operating profit increased 18% to €3,030 million. IFRS operating margin expanded 1.1 percentage points to 28.5%, while non-IFRS operating margin expanded 1.2 percentage points to 29.5%. Gross-margin trends were less favorable: IFRS cloud gross margin declined 0.7 percentage points to 73.9%, and IFRS gross margin declined 0.4 percentage points to 73.1%. Operating-profit growth also benefited from prior-year negative impacts of €0.1 billion each from tax litigation case-law effects and a workforce transformation.
Cash generation remained strong. Q3 net cash flows from operating activities rose 28% to €1,920 million and free cash flow rose 36% to €1,718 million. For Q1–Q3 2026, free cash flow was €7,968 million, compared with €7,205 million in Q1–Q3 2025. SAP repurchased 25,205,983 shares at an average price of €164.79, for approximately €4.2 billion under its new program as of September 30, 2026, while Q1–Q3 dividends paid were €2,883 million.
SAP updated its 2026 cloud revenue and cloud and software revenue outlook toward the upper ends of their respective constant-currency ranges. It maintained its €11.8 – 12.2 billion non-IFRS operating-profit outlook and approximately €10 billion actual-currency free-cash-flow outlook. The guidance assumes a stable macroeconomic environment in the fourth quarter, and SAP disclosed that exchange rates at September 30, 2026 could reduce FY 2026 cloud revenue growth by -1.5pp, cloud and software revenue growth by -1.0pp, and non-IFRS operating-profit growth by -2.0pp.
Management, verbatim
Q3 was an outstanding quarter, with current cloud backlog up 26% at constant currencies. Our Autonomous Enterprise strategy is not just resonating, it is being adopted. Our customers are investing in the technology behind it – from the cloud and data foundation to our Business AI. They see that Joule Work makes the business case for their transformation more attractive than ever.
Christian Klein, CEO
For the first time, SAP crossed €10 billion in total quarterly revenue and €3 billion of non-IFRS operating profit, reflecting the strength and scalability of our business model. Our disciplined approach to cost management, paired with continued cloud momentum, demonstrates our ability to grow both the top and bottom line at the same time.
Dominik Asam, CFO
Not in the filing
stated, not guessed- Prior-quarter comparisons were not reported for the key Q3 metrics.
- Q3 2026 non-IFRS diluted earnings per share was not reported.
- Q3 2026 quarterly cash, debt, dividend payments, treasury-share purchases, investing cash flow and financing cash flow were not reported as separate quarterly figures.
- Gross-margin guidance was not provided.
- A prior outlook section was not provided, so reported results cannot be compared with prior guidance.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
SAP's Q3 2026 earnings were filed via SEC Form 6‑K, providing the first public disclosure of the quarter's financials and outlook.
Ticker impact
SAP reported Q3 2026 results with 13% revenue growth, strong cloud backlog increase and updated guidance for 2026 cloud revenue.
likely upward pressure as market prices in robust cloud growth and updated guidance
Revenue and profit beat expectations, cloud backlog up 28%, and guidance updated to the upper end of the range, which typically supports the stock.
Market effects
Highlights continued strength in enterprise cloud software, supporting peers in the ERP and SaaS space.
Positive for European tech stocks and broader market sentiment on the day of the release.
Reinforces demand for cloud services globally, may influence investor sentiment toward other large cloud providers.
Counterpoint
If the market has already priced in strong cloud growth, the stock may face a short-term pullback on profit-taking.
Key entities
- ExecutiveChristian Klein
CEO of SAP, quoted on cloud backlog growth.
- ExecutiveDominik Asam
CFO of SAP, highlighted revenue milestones.
