Latest news with #Walldorf
Yahoo
13 hours ago
- Business
- Yahoo
SAP Falls as Trade War Concerns Temper Strong Cloud Growth
(Bloomberg) -- SAP SE shares fell after the German software company flagged concerns about tariff insecurities and currency fluctuations even as cloud revenue posted solid growth. Trump Awards $1.26 Billion Contract to Build Biggest Immigrant Detention Center in US Why the Federal Reserve's Building Renovation Costs $2.5 Billion Salt Lake City Turns Winter Olympic Bid Into Statewide Bond Boom Milan Corruption Probe Casts Shadow Over Property Boom How San Jose's Mayor Is Working to Build an AI Capital Cloud and software revenue increased 11% to €7.97 billion ($9.4 billion) in the period ended June 30, the Walldorf, Germany-based company said Tuesday in a statement. That compares to analysts' average estimate of €7.99 billion, according to data compiled by Bloomberg. The company has shown resilient cloud growth in the face of geopolitical instability, as customers who decide to switch from on-premise servers typically commit to complex, multiyear migration projects that can't easily be dialed back. SAP's stock soared over the past year, and the company surpassed Dutch chip machine maker ASML Holding NV to become Europe's most valuable business. Persistent uncertainties are increasing pressure on global trade and customers find it harder 'to make well-informed decisions,' Chief Financial Officer Dominik Asam said on an investor call after the results. He added management is preparing SAP 'for less favorable outcomes' to protect the bottom line and free cash flow this year. SAP shares fell 2.4% to €253.20 at 10:11 a.m. in Frankfurt on Wednesday. While the company maintained its annual forecast for cloud revenue, it expects currency fluctuations to hurt that growth by 3.5 percentage points. SAP is facing 'deal cycle elongation in its complex manufacturing customer base' and the US public sector that could impact its business, KeyBanc Capital Markets analysts Jackson Ader and Jack Nichols said in a note. The results were in line with their expectations, they added. SAP sells software to companies to run business functions such as finances, human resources and procurement. Over the past two years, it has promoted artificial intelligence services to encourage clients to shift from legacy on-site servers to IT infrastructure in the cloud, where average spending per client is higher. SAP's largest market is the US, which represents more than 30% of its sales. The weakened dollar poses currency pressures for the company. Cloud revenue increased 24% to €5.13 billion, excluding currency fluctuations, which was slightly below analysts' expectations. SAP's cloud backlog, an indicator of future cloud sales, increased to €18.1 billion in the second quarter, missing analysts' expectations of €18.5 billion. The number measures how much cloud revenue SAP signed to come in over the next 12 months. The company also said it 'continues to expect current cloud backlog growth at constant currencies to slightly decelerate in 2025.' About half of SAP's revenue and more than half of its operational profit were denominated in US dollars or correlated currencies, Asam said in a media call after the results. A devaluation of the dollar of 1% meant SAP was roughly losing half a percentage point of growth, according to Asam. 'We are facing a significant currency headwind this year,' he said. Investors are watching the effect of currency fluctuations on next year's outlook, according to Rob Hales, a senior equity analyst at Morningstar. 'It could move the stock when we start getting indications from management on the potential impact of currency next year,' he said. SAP has probably significantly increased the incentives it offers customers for their cloud migration, which could impact cash flow next year, UBS Group AG analysts including Michael Briest said in a note last week. (Updates with CFO and analyst comments starting in fourth paragraph.) Elon Musk's Empire Is Creaking Under the Strain of Elon Musk Burning Man Is Burning Through Cash A Rebel Army Is Building a Rare-Earth Empire on China's Border Thailand's Changing Cannabis Rules Leave Farmers in a Tough Spot How Starbucks' CEO Plans to Tame the Rush-Hour Free-for-All ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13 hours ago
- Business
- Yahoo
SAP Falls as Trade War Concerns Temper Strong Cloud Growth
(Bloomberg) -- SAP SE shares fell after the German software company flagged concerns about tariff insecurities and currency fluctuations even as cloud revenue posted solid growth. Trump Awards $1.26 Billion Contract to Build Biggest Immigrant Detention Center in US Why the Federal Reserve's Building Renovation Costs $2.5 Billion Salt Lake City Turns Winter Olympic Bid Into Statewide Bond Boom Milan Corruption Probe Casts Shadow Over Property Boom How San Jose's Mayor Is Working to Build an AI Capital Cloud and software revenue increased 11% to €7.97 billion ($9.4 billion) in the period ended June 30, the Walldorf, Germany-based company said Tuesday in a statement. That compares to analysts' average estimate of €7.99 billion, according to data compiled by Bloomberg. The company has shown resilient cloud growth in the face of geopolitical instability, as customers who decide to switch from on-premise servers typically commit to complex, multiyear migration projects that can't easily be dialed back. SAP's stock soared over the past year, and the company surpassed Dutch chip machine maker ASML Holding NV to become Europe's most valuable business. Persistent uncertainties are increasing pressure on global trade and customers find it harder 'to make well-informed decisions,' Chief Financial Officer Dominik Asam said on an investor call after the results. He added management is preparing SAP 'for less favorable outcomes' to protect the bottom line and free cash flow this year. SAP shares fell 2.4% to €253.20 at 10:11 a.m. in Frankfurt on Wednesday. While the company maintained its annual forecast for cloud revenue, it expects currency fluctuations to hurt that growth by 3.5 percentage points. SAP is facing 'deal cycle elongation in its complex manufacturing customer base' and the US public sector that could impact its business, KeyBanc Capital Markets analysts Jackson Ader and Jack Nichols said in a note. The results were in line with their expectations, they added. SAP sells software to companies to run business functions such as finances, human resources and procurement. Over the past two years, it has promoted artificial intelligence services to encourage clients to shift from legacy on-site servers to IT infrastructure in the cloud, where average spending per client is higher. SAP's largest market is the US, which represents more than 30% of its sales. The weakened dollar poses currency pressures for the company. Cloud revenue increased 24% to €5.13 billion, excluding currency fluctuations, which was slightly below analysts' expectations. SAP's cloud backlog, an indicator of future cloud sales, increased to €18.1 billion in the second quarter, missing analysts' expectations of €18.5 billion. The number measures how much cloud revenue SAP signed to come in over the next 12 months. The company also said it 'continues to expect current cloud backlog growth at constant currencies to slightly decelerate in 2025.' About half of SAP's revenue and more than half of its operational profit were denominated in US dollars or correlated currencies, Asam said in a media call after the results. A devaluation of the dollar of 1% meant SAP was roughly losing half a percentage point of growth, according to Asam. 'We are facing a significant currency headwind this year,' he said. Investors are watching the effect of currency fluctuations on next year's outlook, according to Rob Hales, a senior equity analyst at Morningstar. 'It could move the stock when we start getting indications from management on the potential impact of currency next year,' he said. SAP has probably significantly increased the incentives it offers customers for their cloud migration, which could impact cash flow next year, UBS Group AG analysts including Michael Briest said in a note last week. (Updates with CFO and analyst comments starting in fourth paragraph.) Elon Musk's Empire Is Creaking Under the Strain of Elon Musk Burning Man Is Burning Through Cash A Rebel Army Is Building a Rare-Earth Empire on China's Border Thailand's Changing Cannabis Rules Leave Farmers in a Tough Spot How Starbucks' CEO Plans to Tame the Rush-Hour Free-for-All ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
a day ago
- Business
- Bloomberg
SAP Reports Cloud Growth That Falls Short of Expectations
SAP SE reported quarterly cloud and software sales that fell just short of estimates as tariff insecurities weighed on Europe's most valuable company. Cloud and software revenue increased 11% to €7.97 billion ($9.4 billion) in the period ended June 30, the Walldorf, Germany-based company said Tuesday in a statement. That missed analysts' average estimate of €7.99 billion, according to data compiled by Bloomberg.
Bloomberg
11-07-2025
- Business
- Bloomberg
How SAP Became Europe's Most Valuable Company
A tactical pivot into artificial intelligence and cloud computing helped German software company SAP SE rise to become Europe's most valuable company. Bloomberg's Tom Mackenzie sits down for an exclusive, extended interview with Chief Executive Officer Christian Klein at SAP's headquarters in Walldorf, Germany. Bloomberg Tech: Europe spotlights the biggest names and trends shaping the region's technology ecosystem as the global competition heats up. This monthly, 30-minute 'magazine-style' show features in-depth interviews with top technology leaders, as well as major investors and policymakers - giving you a compelling A to Z of the most consequential innovations, opportunities and challenges. (Source: Bloomberg)
Bloomberg
11-07-2025
- Business
- Bloomberg
SAP CEO: Europe Doesn't Need More Data Centers
The CEO of SAP, Christian Klein, says there is "not so much demand" for data centers in Europe, and that the continent should focus on winning the artificial intelligence software race. He speaks to Bloomberg's Tom Mackenzie at the software company's headquarters in Walldorf, Germany. (Source: Bloomberg)
