By Mauro Orru

SAP is scheduled to report results for the third quarter on Wednesday. Here is what you need to know:

REVENUE FORECAST: The German business-software group should post total revenue of 9.08 billion euros ($10.58 billion), according to a non-IFRS consensus provided by the company. The forecast represents 7% growth year on year.

Analysts expect cloud and software revenue to have increased 9% to 8.06 billion euros, with cloud revenue up 22% to 5.31 billion euros, according to the consensus.

SAP analysts and investors tend to follow non-IFRS numbers, which exclude restructuring expenses as well as acquisition-related charges and aren't based on International Financial Reporting Standards.

OPERATING PROFIT FORECAST: The company behind the Concur travel and expense-management platform is expected to report 13% growth in operating profit to 2.53 billion euros, generating a 27.7% operating margin.

SAP shares have risen about 12% over the past 12 months. Earlier this year, SAP claimed the top spot as Europe's largest listed company by market value, a title now held by ASML Holding, the Dutch supplier of chip-making equipment. SAP shares have given up much of their gains lately as investors digested the impact of tariffs on some SAP clients and, consequently, their spending on SAP services.

WHAT TO WATCH:

-- DEMAND: SAP Chief Executive Christian Klein said in an interview with The Wall Street Journal in July that some customers were taking longer to sign up for SAP services amid uncertainty from President Trump's tariffs.

Unlike tech companies that rely on hardware sales, SAP is relatively insulated from the direct impact of tariffs since it generates revenue from cloud and software services. However, it is still vulnerable to economic uncertainty that is forcing some clients to review their spending priorities.

Citi analysts wrote in a research note that while investor sentiment has been more on the cautious side since July, they expect a resilient third-quarter update.

-- GUIDANCE: For the year, the company is forecasting non-IFRS operating profit between 10.3 billion euros and 10.6 billion euros, cloud revenue from 21.6 billion euros to 21.9 billion euros and free cash flow of roughly 8 billion euros.

Citi analysts said they expect operating profit to be near the top end of the range.

-- RESTRUCTURING: Investors will be on the lookout for any job cuts or redeployments that could be attributable to artificial intelligence. Klein said in July that SAP was weighing plans to eliminate 1% to 2% of its workforce while investing in new roles that require specific AI or data skills.

The company employed nearly 109,000 full-time workers at the end of June, according to its latest financial report. Klein said at the time that the plans were still preliminary and part of continuous efforts to adapt its workforce.

Write to Mauro Orru at mauro.orru@wsj.com

(END) Dow Jones Newswires

October 20, 2025 12:11 ET (16:11 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.