SAP SE (SAP)

Price€188.00Cached quoteAs of 2026-09-18 03:55 UTC

AI: Fair-priced

Price checkThe shares demand strong growth, but current cash generation makes that price defensible.

At the observed market price, SAP trades at roughly 31 times 2025 diluted earnings and about 26 times 2025 free cash flow, where free cash flow means cash left after running and investing in the business. Those are demanding multiples for a value investor. However, first-half 2026 operating profit rose 12% and free cash flow reached €6.25 billion. A simple valuation using roughly 8% annual cash-flow growth, an 8% required return, and 3% long-run growth lands near the market value, leaving limited margin of safety but no clear overvaluation extreme.

Big pictureCloud growth is replacing older software sales while making revenue more predictable.

Revenue increased from €27.3 billion in 2020 to €36.8 billion in 2025, while 2025 operating income reached €9.6 billion after a restructuring-heavy 2024. The transition is continuing: first-half 2026 cloud revenue rose 21%, while software license revenue fell 34% and support revenue fell 9%. Current cloud backlog, contracted cloud business expected within twelve months, reached €22.9 billion and grew 27%. That subscription base reduces cyclicality, although large corporate technology projects can still be delayed when customers become cautious.

Business strengthSAP now combines strong cash production with a much safer balance sheet.

Operating cash flow rose to €9.16 billion in 2025, versus €5.21 billion in 2024, while capital spending was only €739 million. Cash exceeded debt by about €2.1 billion at year-end, reversing nearly €8.0 billion of net debt in 2020. SAP also paid €2.74 billion of dividends and spent €1.92 billion on buybacks. Stock compensation was €1.70 billion, so repurchases partly offset employee-share dilution rather than purely shrinking ownership. A new two-year buyback authorization of up to €10 billion could improve per-share value if purchases remain disciplined.

What could change the storyFaster cloud profit growth would justify the valuation; slowing bookings would undermine it.

The strongest bull case is that cloud commitments keep growing near the mid-20% rate while higher-margin subscription revenue steadily lifts cash flow. The bear case is that investors already pay for much of that outcome: January's weaker-than-expected 2026 cloud outlook triggered a sharp selloff. SAP has also acquired Dremio, Reltio, and Prior Labs to strengthen its artificial-intelligence data platform; those purchases lowered the 2026 profit outlook slightly and add integration risk. Watch cloud backlog growth and free-cash-flow growth: sustained high-single-digit or better cash growth supports today's valuation, while persistent low-single-digit growth would not.

AI: News

Cloud backlog surpriseStrong second-quarter cloud commitments reassured investors that SAP's subscription growth remains healthy.

On July 23, SAP reported current cloud backlog of €22.9 billion, up 27%, alongside 22% cloud-revenue growth and 9% total-revenue growth. Reuters reported that SAP shares jumped about 10% the following session as the backlog result exceeded expectations. The reaction matters because contracted cloud work provides visibility into future subscription revenue. The price move cannot prove a single cause, but contemporary reporting tied the rally primarily to the stronger cloud outlook and results.

AI acquisitions closeSAP bought data specialists to strengthen its artificial-intelligence platform, accepting near-term profit costs.

SAP completed its Dremio acquisition on July 6 and Prior Labs later in July, after also closing Reltio in May. The businesses are intended to make SAP and non-SAP corporate data easier to use in artificial-intelligence applications. Purchase prices were not publicly disclosed. SAP subsequently reduced its 2026 adjusted operating-profit range to €11.8-€12.2 billion, with Reuters citing more than €100 million of acquisition-related dilution. The strategic payoff could be meaningful, but investors are funding that opportunity before its returns are proven.

Growth scare reversedEarlier guidance exposed how sensitive the valuation remains to any slowdown in cloud growth.

On January 29, SAP forecast 2026 cloud growth below some investor expectations even after a strong 2025. Reuters reported a roughly 15% one-day share decline, the largest since 2020, with more than €40 billion of market value erased. First-quarter results then beat profit expectations in April, and the U.S.-listed shares rose about 5.4%. These moves show that SAP's premium valuation is closely tied to continued cloud bookings and profit expansion rather than merely maintaining its existing customer base.

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Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015	2014	2013	2012	2011	2010
Revenue	€36.80B	€34.18B	€31.21B	€29.52B	€26.95B	€27.34B	€27.55B	€24.71B	€23.46B	€22.06B	€20.79B	€17.56B	€16.82B	€16.22B	€14.23B	€12.46B
Gross profit	€26.81B	€24.93B	€22.53B	€21.48B	€19.73B	€19.45B	€19.20B	€17.25B	€16.41B	€15.48B	€14.55B	€12.29B	€11.82B	€11.16B	€9.88B	€8.57B
Gross margin	72.86%	72.95%	72.21%	72.77%	73.22%	71.16%	69.68%	69.80%	69.95%	70.16%	69.97%	69.98%	70.27%	68.78%	69.40%	68.76%
Research & development	€6.63B	€6.51B	€6.32B	€6.08B	€5.27B	€4.45B	€4.29B	€3.62B	€3.35B	€3.04B	€2.85B	—	—	—	—	—
Operating expenses	€27.18B	€29.51B	€25.41B	€23.61B	€20.64B	€20.71B	€23.08B	€19.00B	€18.58B	€16.93B	€16.54B	€7.91B	€7.33B	€7.25B	€5.06B	€6.17B
Operating income	€9.62B	€4.67B	€5.80B	€5.91B	€6.31B	€6.62B	€4.47B	€5.70B	€4.88B	€5.13B	€4.25B	€4.38B	€4.48B	€3.91B	€4.82B	€2.40B
Operating margin	26.13%	13.65%	18.58%	20.03%	23.40%	24.23%	16.23%	23.08%	20.79%	23.28%	20.45%	24.94%	26.65%	24.08%	33.86%	19.25%
EBITDA	€10.93B	€5.95B	€7.17B	€7.48B	€7.84B	€8.45B	€6.34B	€7.07B	€6.15B	€6.40B	€5.54B	—	—	—	—	—
EBITDA margin	29.70%	17.40%	22.98%	25.35%	29.11%	30.92%	23.03%	28.59%	26.21%	29.02%	26.65%	—	—	—	—	—
Net income	€7.33B	€3.15B	€5.96B	€1.71B	€5.38B	€5.28B	€3.37B	€4.09B	€4.05B	€3.63B	€3.06B	€3.28B	€3.33B	€2.82B	€3.44B	€1.81B
Net profit margin	19.91%	9.22%	19.11%	5.79%	19.95%	19.32%	12.23%	16.55%	17.25%	16.45%	14.70%	18.68%	19.77%	17.40%	24.16%	14.55%
Basic EPSper basic share	€6.14	€2.68	€5.26	€1.95	€4.46	€4.35	€2.78	€3.42	€3.35	€3.04	€2.56	€2.67	€2.71	€2.30	€2.80	€1.48
Diluted EPSper diluted share	€6.10	€2.65	€5.20	€1.94	€4.46	€4.35	€2.78	€3.42	€3.35	€3.04	€2.56	€2.74	€2.79	€2.37	€2.89	€1.52

Review official source filings ↗

Owners

Reported major voting-rights holders

German voting-rights notices

6.60%of voting rights

BlackRock, Inc.Notified Aug 11, 2026

View holders

Reported major voting-rights holders of SAP
Holder	Voting rights
BlackRock, Inc.	6.60%Aug 11, 2026 · 81.05M votes

These are threshold-crossing notices, not a complete ownership register. Percentages show issuer voting rights held through the listed share class, exclude financial instruments, and come from different dates. Positions may overlap.

Gray completes the 100% scale; it is not an estimate of other owners.

Source: Issuer voting-rights announcements via EQS ↗Updated Sep 27, 2026