It’s the biggest daily fall since October 2020, when its stock dropped 22% following disappointing third-quarter results. The stock is also on track to close at its lowest price since mid-2024.
SAP’s current cloud backlog rose by 16% in the fourth quarter to 21.1 billion euros [$25.3 billion]. UBS analysts noted Thursday that the cloud backlog growth will be a “disappointment” based on previous expectations of 26% growth.
“Large transformational deals with high cloud revenue ramps in outer years and termination for convenience clauses required by law negatively impacted fourth quarter constant currency current cloud backlog growth by approximately 1 percentage point,” SAP said in its earnings statement.
Chief Executive Officer Christian Klein said the current cloud backlog in the last quarter of the year had laid a “strong foundation” to accelerate revenue growth through 2027.
The German company did however, guide for cloud backlog growth to “slightly decelerate” in 2026.
While SAP has shifted from selling on premises software licences in recent years to focusing on cloud services, the AI boom has led to concerns from investors around legacy software providers.
“What is clear is that one of the killer applications of AI is to completely transform the way companies develop code, i.e. software,” Chief Financial Officer Dominik Asam told CNBC’s “Squawk Box Europe” on Thursday. “So there is the question, will the customers now not be able to do everything themselves, and that means the pie will shrink?”
“So it’s all about how quickly can we as SAP actually also embark [on] these technologies in our R&D portfolio to keep the relative economies of scale advantage,” he added. “Day in, day out, we work on that and try to actually be a frontrunner on AI adoption amongst our 35,000 developers.”