SAP SE (SAP) shares surged 6.38% in after-hours trading on Tuesday following the release of its first-quarter 2025 financial results, which exceeded analyst expectations.

The German software giant reported non-IFRS earnings of €1.44 ($1.65) per share for Q1, significantly beating the analyst consensus estimate of €1.30. This represents a remarkable 77.8% increase from €0.81 per share in the same period last year. Revenue for the quarter rose to €9.01 billion, up from €8.04 billion in Q1 2024, marking a 12% year-over-year growth.

SAP's strong performance was driven by robust growth in its cloud business. Cloud revenue surged 27% to €4.99 billion, with the company's strategic Cloud ERP Suite seeing an impressive 34% growth. The current cloud backlog, a key indicator of future cloud revenue, grew by 28% to €18.2 billion. CEO Christian Klein highlighted the success of SAP's business model, stating, "Q1 once again underlines that our success formula is working. Current cloud backlog expanded 29% at constant currencies and total revenue saw a double-digit increase."

The company maintained its full-year 2025 outlook, expecting cloud revenue to reach €21.6 - 21.9 billion and non-IFRS operating profit of €10.3 - 10.6 billion at constant currencies. This positive outlook, combined with the strong Q1 results, likely fueled investor enthusiasm and drove the after-hours stock price surge.