By Ludwig Burger
FRANKFURT (Reuters) – SAP shares rose as much as 7% to an all-time high on Tuesday after Europe’s biggest software maker reported a better-than-expected quarterly operating profit, driven by revenue growth and intensification of cost cutting.
The German company, whose software is used to run operations from accounting to supply chain management, said late on Monday that second-quarter operating profit adjusted for special items jumped 33% to 1.94 billion euros. euros ($2.1 billion), exceeding analysts’ average estimate of 1.81 billion posted on SAP’s website.
SAP shares were up 6% at 07:25 GMT, with analysts at Stifel calling it a “strong operating quarter”.
The software maker also stepped up its restructuring efforts, saying about 9,000 to 10,000 positions would be affected, up from the 8,000 announced in January.
He said most affected employees would be retrained with artificial intelligence (AI) skills or given voluntary buyout packages.
“We continue to invest in our transformation to be a leader in business AI. Given our progress and strong pipeline, we are confident of achieving accelerated growth through 2027,” CEO Christian Klein said in a statement.
The company’s total quarterly revenue rose 10% to €8.29 billion, surpassing analyst consensus of €8.25 billion, helped by demand for its business planning software.
Cloud revenue of €4.15 billion was in line with analyst consensus.
The company also increased its adjusted operating profit expectation for 2025 to €10.2 billion from €10 billion previously, reflecting expected efficiency gains from its transformation program.
($1 = 0.9185 euros)
(Reporting by Ludwig Burger and Gursimran Kaur; writing by Miranda Murray; editing by Jacqueline Wong and Louise Heavens)
