SAP SE (SAP) saw its shares surge 6.38% in after-hours trading on Tuesday following the release of its first-quarter 2025 earnings report, which exceeded analyst expectations in key areas.

The German software giant reported non-IFRS earnings of €1.44 per share, surpassing the consensus estimate of €1.30. This represents a significant increase from €0.81 per share in the same quarter last year. Revenue for the quarter rose to €9.01 billion, up from €8.04 billion in the previous year, though slightly missing the analyst forecast of €9.078 billion.

The company's strong performance was primarily driven by robust growth in its cloud business. SAP reported a 27% year-over-year increase in cloud revenue, reaching €4.99 billion. The current cloud backlog, a key indicator of future cloud revenue, grew by 28% to €18.2 billion. Additionally, SAP's operating profit showed impressive growth, with non-IFRS operating profit up 60% to €2.46 billion.

Christian Klein, CEO of SAP, commented on the results, 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 also reaffirmed its full-year 2025 outlook, projecting cloud revenue growth of 26% to 28% at constant currencies.

Investors reacted positively to SAP's strong quarterly performance and optimistic outlook, driving the stock price up significantly in after-hours trading. The company's continued focus on cloud growth and operational efficiency appears to be paying off, positioning SAP well in the competitive enterprise software market.