SAP posted higher revenue in its latest quarter, but lowered its operating profit guidance for the current fiscal year citing a sequential deceleration in growth.

Reporting on a non-IFRS basis, the German business-software company said second-quarter revenue rose 9.4% to 9.88 billion euros ($11.24 billion) from a year earlier. Revenue from SAP's cloud business increased 22% to 6.28 billion euros.

Analysts had forecast total revenue of 9.85 billion euros and cloud revenue of 6.26 billion euros, according to a non-IFRS consensus provided by the company.

Net income rose to 7.23 billion euros from 6.62 billion euros. Operating profit, a closely watched metric for software companies, rose to 2.64 billion euros from 2.46 billion euros.

Analysts had expected an operating profit of 2.88 billion euros, according to a non-IFRS consensus provided by the company.

SAP lowered its non-IFRS operating profit guidance for the current fiscal year to 11.8 billion euros to 12.2 billion euros, from 11.9 billion euros to 12.3 billion euros. The company forecast non-IFRS cloud revenue of 25.8 billion euros to 26.2 billion euros, and free cash flow of approximately 10 billion euros.

The company said the slow down in operating profit growth was caused by the sequential declaration of cloud and total revenue growth, an unusually low stock-based compensation expense in the first quarter, accelerated investments in research and development and the dilutive impact of the Reltio acquisition.

SAP, like other European software companies, presents its figures as two sets of numbers. One set is based on the International Financial Reporting Standards--an international accounting method that seeks to provide a global reporting standard--though analysts and investors tend to follow SAP's non-IFRS numbers, which exclude restructuring expenses and acquisition-related charges.

Write to Grace Yoon at grace.yoon@wsj.com

(END) Dow Jones Newswires

July 23, 2026 16:58 ET (20:58 GMT)

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