SAP shares surge as full-year guidance raised

Shares in SAP jumped in Frankfurt on Tuesday after the German enterprise software giant raised its annual guidance on the back of a strong increase in cloud revenues in the third quarter, driven by strong demand for its AI services.

The stock gained nearly 5% to €220.80, giving it a market capitalisation of €271.2bn, overtaking semiconductor group ASML (€265bn) as Europe's largest listed tech company.

SAP, known for its Concur travel and expense platform, reported total revenue of €8.48bn in the three months to 30 September, up 9% on last year, with cloud revenues surging 25% to €4.35bn.

The company ended the period with a cloud backlog of €15.4bn, up 25% on the same point last year.

Total operating profits were up 29% at €2.21bn, with earnings per share rising 15% to €1.25.

“Q3 was another strong quarter for SAP, and we are confidently raising our 2024 financial outlook. Cloud revenue growth developed remarkably well in the quarter, especially for our Cloud ERP Suite," said chief executive Christian Klein.

"Even more importantly, we are making strong progress on Business AI with groundbreaking innovations such as SAP Knowledge Graph. A significant part of our cloud deals in Q3 included AI use cases.”

SAP is now targeting €29.5bn-29.8bn of cloud and software revenue for 2024, up 10% on last year and €400m higher than previous guidance at the midpoint.

Operating profit is forecast to come in at €7.8bn-8.0bn, up from €7.6bn-7.9bn guidance previously and representing 20% growth on 2023.