July 26, 2025
5 min read
Mark Brohan
SAP's Q2 revenue rose 12% to €9B as AI-powered agents and cloud ERP drive growth amid economic uncertainty.
SAP Sees Strong Demand for Cloud, AI, and Data Tools
SAP reported strong Q2 results, highlighting rising global demand for its cloud software, artificial intelligence (AI) tools, and data platforms, despite economic and geopolitical uncertainties affecting some sectors. CEO Christian Klein emphasized that SAP is benefiting from long-term investments in cloud infrastructure and business AI. While some industries, such as the U.S. public sector and manufacturing, have delayed purchasing due to trade concerns, SAP remains well positioned.“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 increased 28% in the quarter, with the core Cloud ERP suite—covering finance, supply chain, and human resources—growing 34%. SAP has now achieved over three years of consistent double-digit growth in its 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” that automate common business tasks. In the first half of 2025, it launched 14 such agents. These AI agents assist with generating quotes, managing expense reports, resolving service disputes, and financial forecasting. The company aims to offer 40 agents by the end of the year. Additionally, SAP is expanding its business data cloud platform, enabling companies to analyze and utilize data more effectively across operations. New customers like Adobe, GSK, and BAE Systems have adopted the platform, with a rapidly growing pipeline. SAP is also deepening its partnership with Palantir to enhance data capabilities.New SAP Features
In response to increasing demands for data sovereignty, SAP is emphasizing end-to-end data control features, including “bring your own key” encryption, localized data centers, and compatibility with both global cloud providers and local infrastructure. New public-sector customers this quarter include 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 leveraging its AI products internally. Klein reported that digital tools powered by Joule, SAP’s AI assistant, have 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 margins.“It’s already clear that AI will increase productivity — not just at SAP, but across industries,” Klein said.CFO Dominik Asam stated that SAP is maintaining its full-year outlook but acknowledged that trade uncertainty and regulatory risks are causing delays in some deals, particularly 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).
“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 new cloud business to close in the second half of the year, consistent with its typical sales cycle. The company is betting that ongoing innovation in AI and data tools will keep it ahead of shifting customer priorities. Source: SAP sees strong demand for cloud, AI, and data tools