According to reports, German software giant SAP SE (SAP.US) reported third-quarter cloud business revenue below analyst expectations, indicating that trade disputes and economic weakness are putting pressure on its sales. The company, headquartered in Waldorf, Germany, announced on Wednesday that its adjusted cloud business revenue for the third quarter reached €5.29 billion (approximately $6.1 billion), slightly below the expected €5.33 billion. Year-on-year growth stood at 22%, marking the slowest pace since Q4 2023. Overall revenue grew by 7% to €9.08 billion (approximately $10.59 billion), also falling short of the analyst expectation of €9.17 billion. Non-IFRS operating profit increased by 14%, reaching €2.57 billion, slightly exceeding the anticipated €2.55 billion. Free cash flow available for dividend distribution rose by 5%, reaching €1.27 billion. Since CEO Christian Klein has pushed for a strategic transformation towards subscription services rather than traditional software licenses deployed on local servers, investors have been closely monitoring the sales progress of SAP's cloud business. Last quarter, SAP management had warned that global trade friction and a weakened dollar could affect customers' investment decisions. CFO Dominik Asam commented in the financial report that despite the uncertainties in the macroeconomic environment, the company has maintained a growth momentum. Following the report, SAP's American Depository Receipts (ADR) dipped nearly 6% in after-hours trading. However, the company’s stock price in Frankfurt has seen little volatility this year. SAP also updated its revenue outlook for the cloud business in 2025. Assuming constant exchange rates, revenue is expected to approach the lower limit of the previous forecast range of €21.6 billion to €21.9 billion, representing a 26% increase at the lower end. Additionally, SAP anticipates that adjusted profit will be at the upper end of the previous forecast range of €10.3 billion to €10.6 billion. Free cash flow is expected to reach €8 billion to €8.2 billion, surpassing the previous expectation of approximately €8 billion. Analysts from TD Cowen, including Derrick Wood, pointed out in a report prior to the earnings release that some third-quarter deals were delayed due to the "tariff turmoil," particularly affecting the manufacturing sector. Wood also noted that an analysis of U.S. government activities revealed a decrease in SAP's order volume for the third quarter, as cuts in government spending impacted the business.