Summary

  • SAP’s current cloud backlog reached €24.144bn at September 30, up 26% year on year at constant currencies; Q3 cloud revenue grew 25% on the same basis.
  • SAP says Q3 cloud growth included a multi-quarter revenue catch-up from customers returning from financial distress, while its 2027 outlook puts operating-expense growth at 80% to 90% of total revenue growth.

Analysis

SAP’s cloud queue is getting longer, and the company has put a useful clock on it. Current cloud backlog reached €24.144bn on September 30, up 28% in euros and 26% at constant currencies. SAP defines the measure as cloud revenue contractually committed for recognition over the next 12 months. It counts contracts in place at the reporting date and forms part of remaining performance obligations, so its horizon and contract boundary stay explicit.

That definition makes the backlog unusually concrete. SAP’s investor-relations FAQ says it includes committed deals, including new contracts and renewals, and forms a lower boundary for cloud revenue expected over the coming year. Usage without a committed minimum and deals signed after the reporting date sit outside the count. A customer can also reach the end of a contract before a renewal enters the book. The metric measures a real contractual queue, with the usual doors and exits attached.

In the third quarter, cloud revenue rose to €6.668bn, up 26% in euros and 25% at constant currencies. Cloud ERP Suite revenue reached €5.924bn, up 28% at constant currencies. Backlog and sales are advancing at nearly the same pace: one records the next twelve months of committed cloud revenue at a date; the other records services delivered during a three-month period. SAP has built a substantial forward book and kept current cloud sales moving with it.

Then comes the sentence that gives the quarter its human complication. SAP says cloud-revenue growth was helped by a multi-quarter catch-up from customers returning from financial distress. That is business that had been delayed while customers were in trouble and was recognized as conditions changed. Recovery created an upside boost; it also makes the quarter a less pure reading of ordinary demand. SAP did not disclose the amount of the catch-up, which is the one number needed to separate it from the recurring run rate.

The guidance leans forward. SAP now expects 2026 cloud revenue toward the upper end of its €25.8bn–€26.2bn range at constant currencies, implying 23% to 25% growth. It also expects current cloud-backlog growth to ease slightly during the year. Meanwhile, software-support revenue fell 6% at constant currencies in Q3. SAP expects that decline to accelerate as customers move from support contracts to cloud subscriptions.

The migration is doing two jobs at once: growing a contracted cloud business and replacing an older stream of support revenue. SAP’s outlook for 2027 says total non-IFRS operating expenses will grow at 80% to 90% of total revenue growth. That leaves a narrow but deliberate gap for operating leverage. The backlog supplies visibility; it does not make the economics of the transition automatic.

The investor’s useful comparison is therefore not simply cloud versus software. It is the booked twelve-month cloud queue against quarterly cloud revenue, the shrinking support base, and the cost of selling and running the new mix. A rising backlog shows contracts are being added or renewed. Revenue shows delivery. Support shows the old model’s retreat. Expense growth shows how much of the expansion SAP is spending to secure.

Sources