SAP Lowers 2026 Profit Outlook Amid AI Acquisitions
SAP reduced its 2026 operating profit forecast due to acquisition costs while reporting strong second-quarter cloud revenue growth.
The German software company SAP lowered its 2026 non-IFRS operating profit outlook to between €11.8 billion and €12.2 billion, down from a previous target of €11.9 billion to €12.3 billion. The company attributed this reduction to a dilutive impact exceeding €100 million stemming from the acquisitions of Dremio and Prior Labs as it invests in infrastructure for artificial intelligence.
Despite the profit adjustment, SAP reported second-quarter 2026 revenue of €9.88 billion, beating analyst estimates of €9.85 billion. Cloud revenue grew 24% year-on-year to €6.28 billion, and the current cloud backlog increased 26% to €22.93 billion. The company maintained its 2026 cloud revenue target of €25.8 billion to €26.2 billion.
Financial results highlight a transition from upfront licensing to subscription models, with Cloud ERP Suite revenue rising between 27% and 29% while software license revenue dropped between 29% and 32%. Leadership credited the performance to the deployment of the Business AI portfolio, the Joule AI assistant, and an Autonomous Enterprise strategy.
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