Strong cloud demand pushes the German software giant to a record quarter as its cloud backlog expands and full-year revenue expectations move to the upper end of its forecast.

German enterprise software giant SAP has surpassed €10 billion in quarterly revenue for the first time, reporting €10.27 billion in revenue for the third quarter of 2026 and raising its full-year revenue expectations.

The results, announced on October 21, highlight continued demand for SAP’s cloud-based business software, which companies use to manage essential operations such as finance, human resources, procurement and supply chains.

According to Reuters, total quarterly revenue increased 13% year over year, while the company’s growing cloud business remained a major contributor to its performance. SAP now expects its 2026 revenue to reach the upper end of its previously announced guidance range. 

Cloud business drives growth

SAP’s cloud revenue rose 26% year over year to €6.67 billion in the third quarter. The increase reflects continued adoption of cloud-based enterprise applications as businesses modernise their technology infrastructure.

The company’s current cloud backlog  a measure of contracted cloud revenue expected to be recognised in the future   also grew 26% at constant currencies to €24.14 billion.

This backlog is an important indicator because it gives investors insight into future demand beyond the revenue SAP has already recorded. Its growth also exceeded the 24% to 25% increase analysts at UBS had expected, according to Reuters. 

Profit also rises as SAP expands

SAP reported an 18% year-over-year increase in non-IFRS operating profit to €3.03 billion.

The company’s results suggest that its cloud expansion is supporting both revenue growth and operating performance. However, SAP maintained its full-year non-IFRS operating profit outlook at €11.8 billion to €12.2 billion at constant currencies.

The distinction matters: the company raised its revenue expectations, but did not increase its operating-profit forecast. 

SAP raises its 2026 revenue expectations

SAP now expects subscription and support revenue to reach the upper end of its €25.8 billion to €26.2 billion forecast for 2026, representing expected growth of 23% to 25% at constant currencies.

Including its traditional software licensing business, SAP expects total revenue of €36.3 billion to €36.8 billion, equivalent to growth of approximately 12% to 13% at constant currencies.

The revised expectations reflect confidence in demand for SAP’s software and cloud services, although the company continues to operate amid economic uncertainties, including changes in energy prices and interest rates.

AI is becoming part of the enterprise software race

SAP is also positioning artificial intelligence as part of its broader business software strategy, including through its Joule assistant platform and AI-enabled enterprise applications.

For companies, the appeal of these tools is the possibility of using AI within existing business workflows rather than treating it as a separate technology. However, SAP’s quarterly results do not establish that AI alone drove its revenue milestone; cloud adoption and contracted demand are also central to the story.

The broader development reflects how enterprise software providers are competing to combine cloud services, business data and AI capabilities in products that organisations already rely on.

What the results mean for the tech industry

SAP’s first €10 billion revenue quarter underscores the scale of the market for enterprise technology and the continuing shift toward cloud-based software.

For customers, investors and competitors, the next indicators to watch include whether cloud backlog growth continues, how quickly businesses adopt AI-enabled applications and whether SAP can convert its expanding contracted demand into sustained revenue and profit growth.

SAP’s record quarter marks a major milestone in its cloud transformation. Its higher revenue outlook signals confidence in demand, while its unchanged profit forecast shows that revenue growth and profitability remain separate measures to watch.