SAP SE (SAP) shares surged 9.88% in pre-market trading on Wednesday, following the release of the company's impressive first-quarter 2025 earnings report. The German software giant reported non-IFRS earnings of €1.44 ($1.65) per share, significantly beating the analyst consensus estimate of €1.30 and marking a remarkable 77.8% increase from the same period last year.
The strong performance was primarily driven by robust growth in SAP's cloud business. The company reported a 26% year-over-year increase in cloud revenue, reaching €4.99 billion. The current cloud backlog, a key indicator of future cloud revenue, grew by 28% to €18.2 billion. Additionally, SAP's strategic Cloud ERP Suite saw an impressive 34% growth, further solidifying the company's position in the enterprise software market.
Despite concerns about the impact of President Trump's tariff policies on the tech industry, SAP demonstrated resilience in its business model. The company reaffirmed its full-year 2025 outlook, projecting cloud revenue growth of 26% to 28% at constant currencies. CEO Christian Klein commented on the results, stating, "Q1 once again underlines that our success formula is working. Current cloud backlog expanded 29% at constant currencies and total revenue saw a double-digit increase." This strong performance and optimistic outlook have clearly resonated with investors, driving the significant stock price surge.
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