SAP reported strong Q2 results and signaled rising global demand for its cloud software, artificial intelligence (AI) tools, and data platforms — even as economic and geopolitical uncertainty dampens IT spending in some sectors.
CEO Christian Klein said SAP is benefiting from long-term investments in cloud infrastructure and business AI, even as some industries — such as U.S. public sector and manufacturing — delay purchasing decisions due to trade-related concerns.
“Whatever the market environment may bring, SAP is well prepared,” Klein said during the company’s earnings call. “We’re making big moves in product innovation and rapidly improving our own productivity with AI.”
How SAP invested in AI agents in Q2
Cloud revenue rose 28% in the quarter. Meanwhile, the company’s core Cloud ERP suite — which includes applications for finance, supply chain, and human resources — grew 34%. SAP has now posted more than three years of consistent double-digit growth in its cloud ERP business.
Total SAP revenue in Q2 rose 12% to €9 billion (US$9.8 billion). Operating profit increased 35% to €2.6 billion (US$2.84 billion), driven by cloud growth, internal cost controls, and the company’s own use of AI tools to boost efficiency.
SAP is investing heavily in AI-powered “agents” that help customers automate common business tasks. In the first half of 2025, it launched 14 of these agents.
Its AI agents are tools that can generate quotes, manage expense reports, resolve service disputes, and help with financial forecasting. The company expects to offer 40 agents by the end of the year.
SAP is also building its business data cloud platform, which allows companies to analyze and apply their data more effectively across operations. New customers including Adobe, GSK, and BAE Systems have signed up to use the platform, and Klein said the pipeline is growing quickly.
SAP is deepening its partnership with Palantir to enhance its data capabilities.
New SAP features
As more governments and corporations demand tighter control over their data, SAP is leaning into its ability to offer end-to-end sovereignty. That includes features such as “bring your own key” encryption and localized data centers, as well as compatibility with both global cloud providers and local infrastructure.
New public-sector customers in the quarter included Germany’s federal pension agency and the German Armed Forces, which signed deals for SAP’s analytics, project management, and AI tools.
SAP is also using its AI products internally. Klein said digital tools built with Joule, the company’s AI assistant, have improved developer productivity by 30%, reduced HR support response times by 20%, and boosted efficiency for sales teams by up to 50%.
These gains have helped SAP keep expenses in check and improve margins.
“It’s already clear that AI will increase productivity — not just at SAP, but across industries,” Klein said.
Chief financial officer Dominik Asam said SAP is maintaining its full-year outlook but acknowledged that ongoing trade uncertainty and regulatory risk are causing delays in some deals. Sales cycles have lengthened in sectors tied to government procurement or global manufacturing.
Still, SAP’s backlog of cloud business rose 28% to €18.1 billion (US$19.8 billion). Free cash flow rose 83% to €2.4 billion (US$2.63 billion).
“Our strategy is working, and our offerings are mission-critical to customers,” Asam said. “But we are preparing SAP for less favorable outcomes by focusing on disciplined execution and cost control.”
Looking ahead, SAP expects most of its new cloud business to close in the second half of the year, which is typical of its sales cycle. In the meantime, the company is betting that continued innovation in AI and data tools will keep it ahead of shifting customer priorities.
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