SAP Reports Strong Q1 2026 Results Driven by Cloud Growth; Reaffirms Key 2026 Outlook

summarizeSummary

SAP reported strong Q1 2026 results with significant cloud revenue and operating profit growth, while reaffirming most of its full-year 2026 outlook, though total revenue growth is now expected to remain similar to 2025.

check_boxKey Events

• Strong Q1 Financial Performance

  Cloud revenue grew 19% (27% at constant currencies) to €5.96 billion, and non-IFRS operating profit increased 17% (24% at constant currencies) to €2.87 billion. Total revenue rose 6% (12% at constant currencies) to €9.56 billion.

• Updated 2026 Outlook

  SAP reaffirmed its full-year 2026 outlook for cloud revenue, cloud and software revenue, non-IFRS operating profit, and free cash flow. However, it now expects constant currency total revenue growth in 2026 to remain at similar levels as in 2025, rather than accelerating through 2027 as previously assumed.

• Share Repurchase Program Update

  As of April 1, 2026, SAP completed the first tranche of its €10 billion share repurchase program, having bought back approximately €2.6 billion worth of shares.

• Teradata Litigation Settlement

  The company paid €408 million in March 2026 to settle the Teradata litigation, resulting in an additional expense of €29 million in Q1 2026 and impacting operating and free cash flows.

auto_awesomeAnalysis

SAP delivered a strong first quarter, primarily driven by robust cloud revenue and operating profit growth, which exceeded market expectations. The company reaffirmed its full-year 2026 outlook for key financial metrics, including cloud revenue and non-IFRS operating profit, signaling continued confidence in its core business. However, the outlook for constant currency total revenue growth in 2026 was adjusted to remain at similar levels as in 2025, rather than accelerating as previously anticipated, which could introduce a slight tempering of growth expectations. The resolution of the Teradata litigation, involving a significant cash payout, impacted Q1 operating and free cash flows but removes a long-standing legal overhang. The ongoing share repurchase program and the strategic acquisition of Reltio further highlight the company's capital allocation and growth initiatives.