TLDR
SAP shares crashed 11% Thursday after Q4 cloud backlog grew 25%, missing Wall Street’s 26% projection
The drop represents SAP’s largest single-day decline since October 2020 when the stock fell 22%
Management warned cloud backlog growth will “slightly decelerate” in 2026, adding to investor concerns
Fourth quarter results showed cloud revenue up 26% to 5.61 billion euros and total revenue climbing 9% to 9.68 billion euros
SAP launched a 10 billion euro share repurchase program starting February 2026 and ending December 2027
SAP took a beating Thursday. The German software company saw shares drop 11% in early European trading.
The trigger was disappointing cloud growth numbers.
#SAP SE$SAP, Q4-25.
Results:
Adj. EPS: €1.62 
Revenue: €9.68B 
Net Income: €1.90B
Cloud revenue hit €5.61B in Q4, supported by strong growth in SAP Business AI and Cloud ERP adoption. pic.twitter.com/uoHE4QGJzp
— EarningsTime (@Earnings_Time) January 29, 2026
SAP reported current cloud backlog growth of 25% for the fourth quarter. That brought the total to 21.05 billion euros, or about $25.17 billion. Wall Street expected 26% growth.
Missing by one percentage point might seem trivial. In the software industry, it’s anything but.
This marks SAP’s worst trading session since October 2020. Back then, shares plummeted 22% after weak third-quarter earnings. The stock has now fallen more than 30% over the past 12 months.
CEO Christian Klein attempted damage control. He said the Q4 cloud backlog builds a “strong foundation” for revenue acceleration through 2027.
Investors didn’t share his optimism.
Forward Guidance Raises Red Flags
The guidance created bigger problems than the Q4 miss. SAP expects cloud revenue growth between 23% and 25% for 2026. Analysts wanted 24% to 26%.
Management also cautioned that cloud backlog growth would “slightly decelerate” this year.
That’s the opposite of what the market wanted.
SAP attributed the backlog shortfall to timing. Large transformation deals scheduled revenue recognition for outer years. Legal requirements for termination clauses also played a role. Together, these factors reduced growth by approximately 1 percentage point.
UBS analysts called the cloud backlog results a “disappointment” in their Thursday analysis.
Citi analysts wrote that SAP’s fundamentals stay solid. But they questioned whether the results satisfy investors given current sector weakness. AI spending concerns and bubble fears continue weighing on software stocks.
Quarterly Results Show Mixed Picture
The actual Q4 performance had bright spots. Total revenue reached 9.68 billion euros, growing 9% year-over-year. Cloud business sales surged 26% to 5.61 billion euros.
Geography mattered. Canada, Brazil, Germany, India, Italy, Spain, the UK and South Korea delivered strong cloud performance. Australia, Japan, Mexico, Saudi Arabia, Singapore and the U.S. also contributed solid results.
SAP closed 2025 with full-year revenue of 36.80 billion euros. That’s 11% growth at constant currencies.
Net profit for the quarter came in at 1.89 billion euros compared to 1.63 billion euros a year earlier. Operating profit increased to 2.83 billion euros from 2.44 billion euros. Operating margin reached 29.2%.
SAP sweetened the deal with a share buyback announcement. The company will repurchase up to 10 billion euros worth of stock. The program kicks off in February 2026 and concludes at the end of 2027.
For 2026, SAP forecasts non-IFRS operating profit between 11.9 billion and 12.3 billion euros. Free cash flow should land around 10 billion euros. The company continues transitioning from software licenses to subscription-based cloud services.
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