Published by Global Banking & Finance Review®
Posted on October 22, 2025
2 min readLast updated: January 21, 2026
Add as preferred source on GoogleSAP's Q3 revenue fell short of estimates, causing a 3% drop in U.S.-listed shares. Cloud business growth slowed, but operating profit exceeded expectations.
(Reuters) -German software maker SAP on Wednesday reported third-quarter revenue below analysts' estimates and forecast full-year cloud revenue at the lower end of its outlook range, sending its U.S.-listed shares down 3% in extended trading.
Walldorf, Germany-based SAP said revenue for the third quarter ended Sept. 30 rose 7% to 9.08 billion euros ($10.59 billion), missing analysts' expectations of 9.17 billion euros, according to LSEG IBES data.
Revenue from SAP's lucrative cloud business rose 22%, its slowest pace of growth since the fourth quarter of 2023.
"We've maintained forward momentum despite an uncertain macroeconomic backdrop," CFO Dominik Asam said.
The company has focused on cloud operations for the last few years, adopting a subscription-based service model that generates predictable revenue over time rather than the lumpy up-front cash flows from software licences.
Operating profit, on a non-IFRS basis, rose 14% to 2.57 billion euros, slightly above estimates of 2.55 billion euros, while free cash flow, used to determine dividends to investors, grew 5% to 1.27 billion euros.
The company also said it was expecting cloud revenue for 2025 to be at the lower end of its forecast of 21.6 billion to 21.9 billion euros.
However, operating profit was seen at the upper end of the its outlook range of 10.3 billion to 10.6 billion euros and free cash flow is expected at 8 billion to 8.2 billion euros, compared wth 8 billion euros earlier.
($1 = 0.8575 euros)
(Reporting by Supantha Mukherjee in Stockholm and Preetika Parashuraman in Bengaluru; Editing by Anil D'Silva)
Cloud revenue refers to the income generated from cloud-based services and products, typically through subscription models, which provide businesses with predictable and recurring revenue streams.
Operating profit is the profit a company makes from its regular business operations, excluding costs associated with non-operating activities such as interest and taxes.
Free cash flow is the cash generated by a company after accounting for capital expenditures needed to maintain or expand its asset base, indicating the company's ability to generate cash.
A subscription-based service model is a business strategy where customers pay a recurring fee at regular intervals for access to a product or service, providing predictable revenue for the company.
Analysts' estimates are projections made by financial analysts regarding a company's future earnings, revenue, or other financial metrics, often used by investors to assess performance.
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