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The Zacks Consensus Estimate for second-quarter earnings is pegged at $1.63 per share, implying a 38% increase from the year-ago reported actuals. The Zacks Consensus Estimate for second-quarter revenues is currently pinned at $10.4 billion, implying a 16.47% increase from the year-ago figure.
SAP's earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 10%. Shares of the company have rallied 56.5% in the past year compared with the Computers - Software industry's growth of 21.4%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar)
Image Source: Zacks Investment Research
Key Focus Areas for Investors
The company’s ongoing cloud transformation, AI-driven growth strategy and enterprise software performance are likely to have influenced its second-quarter performance. SAP’s ongoing shift to the cloud, led by its flagship RISE with SAP and Grow with SAP solutions, serves as a major catalyst. Cloud revenues rose 27% year over year to €4.99 billion on a non-IFRS basis in the first quarter, supported by a robust 34% growth in Cloud ERP Suite revenues. The suite made up 85% of total cloud revenues, emphasizing its growing importance as a key driver of the company’s overall cloud growth.
SAP's increasing emphasis on Business AI is expected to be a key growth driver through 2027. The company will introduce flexible licensing models that allow customers to easily move to the latest cloud-based versions of its complete business suite, without needing separate negotiations. Looking ahead, SAP intends to broaden its "RISE with SAP" offering by incorporating a full set of business transformation tools, including LeanIX, Signavio and WalkMe.
SAP remains optimistic about the generative AI trend and expects it to positively impact revenues in the future. Management highlighted that it has incorporated more than 1,300 skills into its AI co-pilot Joule and covered 80% of business and analytical transactions by the end of 2024. In go-to-market efforts, AI-assisted contract validation has reduced SAP's average contract booking time by 75%. In corporate functions, AI-powered quote-to-cash automation has increased productivity tenfold.
In 2025, SAP is deepening its focus on AI through significant investments. More than 30,000 developers will be dedicated to enhancing SAP’s AI capabilities and creating new applications to increase user productivity by 30% by year-end.
Nonetheless, it is likely to face revenue fluctuation due to long sales cycles, complex licensing and changes in customer budgets. Software and service revenues are closely linked. The U.S.–China trade war and tariffs also adversely impact software license sales. Additionally, SAP's reliance on cyberspace makes it vulnerable to cybersecurity breaches, which could harm its reputation and lead to costly legal issues.
To stay ahead in the highly competitive IT services industry, it continues to invest in new technological innovations over time. This boosts research and development costs, which are likely to affect its financial results.
What Our Model Says About SAP
Our proven model predicts an earnings beat for SAP this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is exactly the case here.
SAP has an Earnings ESP of +0.05% and a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks With Favorable Combination
Here are some other companies with the right combination of elements to post an earnings beat in their upcoming releases.
The consensus estimate for Emerson Electric’s earnings for the third quarter of fiscal 2025 is pegged at $1.51 per share, indicating year-over-year growth of 5.6%. EMR has a trailing four-quarter average surprise of 3.4%.
Illinois Tool Works Inc. ((ITW - Free Report) ), slated to release second-quarter 2025 results on July 30, has an Earnings ESP of +1.44% and a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for Illinois Tool Works’ second-quarter 2025 earnings is pegged at $2.55 per share, suggesting a year-over-year rise of 0.4%. ITW has a trailing four-quarter average surprise of 3%.
Crown Holdings, Inc. ((CCK - Free Report) ) is scheduled to release second-quarter 2025 results on July 21. It currently has an Earnings ESP of +0.27% and a Zacks Rank of 3.
The Zacks Consensus Estimate for Crown Holdings’ earnings is pegged at $1.86 per share, which indicates a year-over-year increase of 2.8%. CCK has a trailing four-quarter average surprise of 16.3%.
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SAP's Q2 Earnings on the Horizon: Should Investors Expect a Beat?
Key Takeaways
SAP SE ((SAP - Free Report) ) is scheduled to post results for the second quarter of 2025 on July 22.
The Zacks Consensus Estimate for second-quarter earnings is pegged at $1.63 per share, implying a 38% increase from the year-ago reported actuals. The Zacks Consensus Estimate for second-quarter revenues is currently pinned at $10.4 billion, implying a 16.47% increase from the year-ago figure.
SAP's earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 10%. Shares of the company have rallied 56.5% in the past year compared with the Computers - Software industry's growth of 21.4%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar)
Image Source: Zacks Investment Research
Key Focus Areas for Investors
The company’s ongoing cloud transformation, AI-driven growth strategy and enterprise software performance are likely to have influenced its second-quarter performance. SAP’s ongoing shift to the cloud, led by its flagship RISE with SAP and Grow with SAP solutions, serves as a major catalyst. Cloud revenues rose 27% year over year to €4.99 billion on a non-IFRS basis in the first quarter, supported by a robust 34% growth in Cloud ERP Suite revenues. The suite made up 85% of total cloud revenues, emphasizing its growing importance as a key driver of the company’s overall cloud growth.
SAP's increasing emphasis on Business AI is expected to be a key growth driver through 2027. The company will introduce flexible licensing models that allow customers to easily move to the latest cloud-based versions of its complete business suite, without needing separate negotiations. Looking ahead, SAP intends to broaden its "RISE with SAP" offering by incorporating a full set of business transformation tools, including LeanIX, Signavio and WalkMe.
SAP remains optimistic about the generative AI trend and expects it to positively impact revenues in the future. Management highlighted that it has incorporated more than 1,300 skills into its AI co-pilot Joule and covered 80% of business and analytical transactions by the end of 2024. In go-to-market efforts, AI-assisted contract validation has reduced SAP's average contract booking time by 75%. In corporate functions, AI-powered quote-to-cash automation has increased productivity tenfold.
In 2025, SAP is deepening its focus on AI through significant investments. More than 30,000 developers will be dedicated to enhancing SAP’s AI capabilities and creating new applications to increase user productivity by 30% by year-end.
SAP SE Price and EPS Surprise
SAP SE price-eps-surprise | SAP SE Quote
Nonetheless, it is likely to face revenue fluctuation due to long sales cycles, complex licensing and changes in customer budgets. Software and service revenues are closely linked. The U.S.–China trade war and tariffs also adversely impact software license sales. Additionally, SAP's reliance on cyberspace makes it vulnerable to cybersecurity breaches, which could harm its reputation and lead to costly legal issues.
To stay ahead in the highly competitive IT services industry, it continues to invest in new technological innovations over time. This boosts research and development costs, which are likely to affect its financial results.
What Our Model Says About SAP
Our proven model predicts an earnings beat for SAP this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is exactly the case here.
SAP has an Earnings ESP of +0.05% and a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks With Favorable Combination
Here are some other companies with the right combination of elements to post an earnings beat in their upcoming releases.
Emerson Electric Co. ((EMR - Free Report) ), expected to release earnings on Aug. 6, currently has an Earnings ESP of +0.46% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here
The consensus estimate for Emerson Electric’s earnings for the third quarter of fiscal 2025 is pegged at $1.51 per share, indicating year-over-year growth of 5.6%. EMR has a trailing four-quarter average surprise of 3.4%.
Illinois Tool Works Inc. ((ITW - Free Report) ), slated to release second-quarter 2025 results on July 30, has an Earnings ESP of +1.44% and a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for Illinois Tool Works’ second-quarter 2025 earnings is pegged at $2.55 per share, suggesting a year-over-year rise of 0.4%. ITW has a trailing four-quarter average surprise of 3%.
Crown Holdings, Inc. ((CCK - Free Report) ) is scheduled to release second-quarter 2025 results on July 21. It currently has an Earnings ESP of +0.27% and a Zacks Rank of 3.
The Zacks Consensus Estimate for Crown Holdings’ earnings is pegged at $1.86 per share, which indicates a year-over-year increase of 2.8%. CCK has a trailing four-quarter average surprise of 16.3%.