July 27, 2025
5 min read
Mark Brohan
SAP's Q2 revenue rose 12% to €9B, fueled by cloud ERP growth and AI agent innovation, with plans for 40 AI agents by 2025.
SAP Sees Strong Demand for Cloud, AI, and Data Tools
SAP reported strong Q2 results and highlighted rising global demand for its cloud software, artificial intelligence (AI) tools, and data platforms, despite economic and geopolitical uncertainties impacting some sectors.How SAP Invested in AI Agents in Q2
Cloud revenue increased 28% in the quarter, with SAP’s core Cloud ERP suite—covering finance, supply chain, and human resources—growing 34%. This marks over three years of consistent double-digit growth in SAP’s cloud ERP business. Total revenue for Q2 rose 12% to €9 billion (US$9.8 billion). Operating profit surged 35% to €2.6 billion (US$2.84 billion), driven by cloud growth, internal cost controls, and SAP’s own use of AI tools to enhance efficiency. SAP is heavily investing in AI-powered "agents" designed to automate common business tasks. In the first half of 2025, the company launched 14 such agents. These AI agents assist with generating quotes, managing expense reports, resolving service disputes, and financial forecasting. SAP aims to offer 40 AI agents by the end of 2025. The company is also expanding its business data cloud platform, enabling companies to analyze and apply data more effectively across operations. New customers like Adobe, GSK, and BAE Systems have adopted the platform, with a rapidly growing pipeline. SAP is deepening its partnership with Palantir to enhance data capabilities.New SAP Features
Responding to increased demands for data sovereignty, SAP offers end-to-end control features such as "bring your own key" encryption, localized data centers, and compatibility with both global cloud providers and local infrastructure. New public-sector customers in the quarter include Germany’s federal pension agency and the German Armed Forces, which signed deals for SAP’s analytics, project management, and AI tools. Internally, SAP leverages its AI assistant Joule, which has improved developer productivity by 30%, reduced HR support response times by 20%, and boosted sales team efficiency by up to 50%. These improvements have helped SAP control expenses and improve profit margins. CEO Christian Klein emphasized, "It’s already clear that AI will increase productivity—not just at SAP, but across industries." CFO Dominik Asam noted that while SAP maintains its full-year outlook, ongoing trade uncertainty and regulatory risks are delaying some deals, especially in government procurement and global manufacturing sectors. Sales cycles have lengthened accordingly. Despite this, SAP’s backlog of cloud business rose 28% to €18.1 billion (US$19.8 billion), and free cash flow increased 83% to €2.4 billion (US$2.63 billion). Asam stated, "Our strategy is working, and our offerings are mission-critical to customers. But we are preparing SAP for less favorable outcomes by focusing on disciplined execution and cost control." Looking ahead, SAP expects most new cloud business to close in the second half of 2025, consistent with its typical sales cycle. The company is betting on continued AI and data tool innovation to stay ahead of shifting customer priorities.Source: SAP sees strong demand for cloud, AI, and data tools on July 25, 2025