SAP Shares Fall Despite Strong Q2 Results, Unchanged Outlook

SAP shares fell about 4% on Wednesday after the German software company reported second-quarter earnings that were better than expected but decided not to update its full-year guidance because of persistent geopolitical risks and weaker visibility.

The firm made 2.57 billion ($2.77 billion) in operational profit in the second quarter, which is nearly 33% more than a year ago. This was helped by cost savings from its 2024 reorganization initiative. Free cash flow rose 83% to 2.36 billion, which was around 1 billion more than what most people thought it would be.

SAP kept its expectation for full-year operating profit in 2025 at 10.3 billion to 10.6 billion, which is up from 8.15 billion last year. Dominik Asam, the business's finance officer, said that the company is still "cautiously optimistic" as it heads into the second half of the year, but it is keeping an eye on what is happening in Washington and the public sector.

Some analysts and traders said that investors were disappointed because the cloud wasn't doing as well as expected and SAP didn't raise its guidance. One trader told Reuters that the results were "still driven by SAP's old licenses business," and that the "future cloud biz lagged expectations."