SAP Q2 Preview: Cloud Revenue Will Grow 27%, Cloud Backlog 29%

Highlights


00:14 — Later today, we will hear from SAP about
its Q2 financial results. So the cloud revenue for the past six
quarters: 24%, 25%, 27%, 20%, 27%, 27%. I’m projecting 27% for
Q2. It's even been stronger in its cloud backlog numbers: 27%,
28%, 29%, up to 32% in the giant Q4 numbers, 28% in Q1. I’m
projecting the backlog will go up 29% for Q2.


01:34 — Three months ago, after SAP released its
Q1 numbers, CEO Christian Klein did an interview with Bloomberg
TV, and he said something that I think surprised a lot of people:
“There has been absolutely no pullback on U.S. spending.” Now,
you might suspect that there would have been—with all this doom
and gloom coming up about tariffs.


02:44 — A couple of the big factors: SAP has
shifted fully to AI. It's embedding it in all iits applications
and solutions, in its Joule agent system. It's doing its launch
of its Business Data Cloud, which fuels so much of what they’re
doing in AI for customers. And also, its very ambitious ecosystem
and partnership strategy has been quite strong and continues to
be that way.


03:37 — We heard recently from Oracle CEO Safra
Catz — she feels that Oracle’s applications business is about to
kick into higher growth, and she says that it will become the
largest cloud applications provider. So, a challenge coming at
SAP’s leadership in that field from Oracle.


04:10 — I’ve got an article coming up later
today with more details on my outlook for SAP. And later this
week, we’ll be catching up on its numbers, along with those of
IBM, ServiceNow, and others in the Cloud Wars Top 10.


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