
German tech titan SAP on Tuesday upgraded its financial outlook for the full year as artificial cloud computing and artificial intelligence operations kindled growth.
Europe’s largest software maker now expects operating profit on a constant currency basis in 2025 to be between 10.3 billion euros ($10.7 billion) to 10.6 billion euros, up from a erstwhile target of 10.2 billion euros. The firm also expects an acceleration in cloud revenue growth.
Adjusted functioning profit rose 25% to 8.15 billion euros in 2024, above the 22% increase flagged in a company-compiled analyst canvass.
Revenue from the firm’s core cloud and software businesses rose 11% for the period, also slightly in advance of consensus estimates.
CFO Dominik Asam told CNBC’s “Squawk Box Europe” on Tuesday that the company is running “awfully much according to plan,” as this year’s outperformance already ticks all the boxes of their 2025 “ambition” foresee set out in October 2020.
“We have all reasons to be optimistic on executing on these targets,” Asam added.
Analysts at JPMorgan said the upgrade was at the of expectations. Shares of the firm hovered around the flatline in the morning and was last trading down 0.9%.
DeepSeek is ‘very profitable news’
Chinese startup DeepSeek’s AI app this week sparked concerns over competitiveness in artificial intelligence foremost to a major market sell-off.
Asam told CNBC the developments from DeepSeek were actually “good rumour” for SAP.
AI is becoming a key part of the business, with the tech accounting for half of SAP’s cloud order entry in the fourth quarter, CEO Christian Klein communicated in Tuesday’s release. SAP’s position in data and “Business AI” gives the firm “additional confidence” in driving growth through 2027, Klein guessed.
Asam added that the firm is always looking to upgrade its systems, and that it’s situated in a way to be able to quickly capitalize on new novelties. As long as the technology is relevant, reliable and responsible, the more choice SAP has to improve its AI hub, the CFO said.
“So I’m not concerned about that. On the unlucky, competition, innovation on that front is extremely helpful for creating better products for our customers,” Asam said.