1. On Wednesday, SAP reported a 58% growth in operating profit in the first quarter compared to the same period last year at constant exchange rates, while also confirming its full-year cloud revenue outlook.

2. Last month, the German software giant surpassed Novo Nordisk to become the most valuable publicly traded company in Europe.

3. SAP also stated that it still expects full-year cloud service revenue to decline in the range of 21.6 billion euros to 21.9 billion euros at constant exchange rates this year.

On Wednesday, SAP reported a 58% growth in operating profit in the first quarter compared to the same period last year at constant exchange rates, while also confirming its full-year cloud revenue outlook.

According to LSEG data, SAP's operating profit reached 2.5 billion euros ($2.9 billion) in the first quarter, compared to analysts’ expectations of nearly 2.2 billion euros.

The company's shares rose 10.3% at 10:23 AM in London on Wednesday.

The German software giant last month surpassed Novo Nordisk to become the most valuable publicly traded company in Europe, reporting that revenue rose 11% to 9 billion euros, with cloud backlog increasing 29% year-over-year. Earnings per share increased 79% year-over-year to 1.44 euros.

SAP also stated that it still expects full-year cloud service revenue to decline in the range of 21.6 billion euros to 21.9 billion euros at constant exchange rates this year.

SAP is 'more relevant than ever' amid tariff uncertainties

Speaking to CNBC's 'Squawk Box Europe' on Wednesday, SAP CEO Christian Klein mentioned the uncertainty that the new U.S. tariffs are creating for businesses around the world — including SAP's customer base.

During his visit to the U.S. last week, Klein said he spoke with customers concerned about the impact of a series of tariffs that U.S. President Donald Trump imposed on imports.

“What they told me was, ‘your software is more relevant than ever,’” he told CNBC, adding that SAP is helping companies do business in over 130 countries. The company’s software provides customers with the means to maintain their supply chains resilient, he said, by helping them identify which of their suppliers can still provide competitive pricing.

Klein said: “That gives me and the company a lot of confidence at this time when it comes to growth for the entire year, and that’s why we are also confirming our guidance.”

SAP upgraded its full-year 2025 outlook in January after adjusted operating profit rose 25% to 8.15 billion euros for the full year 2024. The company completed its company-wide restructuring program in the first quarter of this year.

On Wednesday, Klein shared with CNBC that the growth of SAP's cloud unit has given the company 'a lot of predictability.'

“When I talk about predictability, it’s not just a buzzword,” he said. “Look at our total revenue, it… includes 86% recurring revenue. That’s predictability; that’s resilience.”

“It’s very difficult to predict what will happen after the 90-day pause on most of the U.S. [reciprocal] tariffs, and of course there are many scenarios,” he added. “But we remain optimistic when looking at what we see in the market [and] what we hear from our customers.”

Resilience

In response to SAP's earnings update on Wednesday, analysts praised the company's resilience in the current macroeconomic environment. In a note to clients on Wednesday, Deutsche Bank analysts called SAP's first-quarter results 'a masterclass in resilience.'

Note that they expect the company to weather any downturn that may affect the global economy, with analysts from the German lending firm praising 'strong cost discipline and subsequent cost levers that management holds in case of a macroeconomic downturn allowing the company to protect profits.'

JPMorgan analyst Toby Ogg said in a note on Wednesday: “Overall, with warnings starting to emerge in the tech sector and considering that SAP's stock has dropped -22% from its peak, this is a strong set of results and illustrates the resilience and defensiveness in SAP's earnings trajectory.”

Analysts from TD Cowen also agreed with this positive outlook by raising their price target from $315 to $320 per share.

Derrick Wood of this investment bank said: “We remain confident in SAP's ability to navigate challenging macroeconomic conditions, and this model will continue to see rapid growth alongside significant margin expansion.”

Pascal Spano from German bank Metzler also stated that the latest results demonstrate the company and management's superiority during a downturn.

Spano told clients in a note after the results were published that: “Cloud revenue and the current cloud backlog continue to show good growth momentum, demonstrating solid demand across all verticals despite current uncertainties.”


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