Shares of SAP were rising on Friday as the German tech company shook off concerns about its software business with a better-than-expected quarterly earnings report.

The print indicated that artificial-intelligence tools and hardware spending aren't replacing SAP, which offers cloud services and operations software for enterprises.

SAP posted earnings of EUR1.89 ($2.15) a share in the second quarter, up from EUR1.45 last year and above analysts' consensus estimate of EUR1.68, per FactSet. Revenue rose 11% from a year ago on a constant-currency basis to EUR9.88 billion, exceeding Wall Street's call for EUR9.85 billion.

SAP's American depositary receipts were up 6.2% ahead of Friday's opening bell.

The company's cloud unit -- by far its largest business segment -- grew 24% year over year on a constant currency basis. Investors are likely to be pleased with the cloud backlog, which grew 26% to EUR22.9 billion.

The cloud business has benefited in recent years from enterprises shifting their data to the company's platform from on-site databases.

But that shift has coincided with a sharp decline in software support revenue, which fell 7% in the second quarter. Worries about artificial-intelligence tools lessening the need for certain enterprise software tools has weighed on the stock, which is down 40% this year.

SAP said that the company's cloud platform offered embedded AI solutions that generic AI tools can't match.

More than 90% of the 50 largest deals that SAP signed over the quarter included some sort of AI component, CFO Dominik Asam told Barron's in a call on Friday. "We firmly believe that our customers do see SAP as a key contributor to their own AI stories," he added.

SAP reiterated its outlook for revenue and cash flow for the full year. It lowered its guidance for non-adjusted operating profit by EUR100 million due to dilution from two acquisitions closed in July.

Write to Nate Wolf at nate.wolf@barrons.com

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July 24, 2026 04:37 ET (08:37 GMT)

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