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The Zacks Consensus Estimate for first-quarter earnings is $1.91 per share, indicating a 26.5% increase from the year-ago reported actuals. The Zacks Consensus Estimate for revenues is currently pinned at $11.26 billion, implying a 18.8% jump 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 7.4%. Shares of the company have fallen 27.7% in the past year against the Computers - Software industry's growth of 11.9%.
SAP’s first-quarter earnings are likely to have been supported by a healthy cloud backlog, strong growth in cloud revenues and increasing AI momentum, with management highlighting its competitive advantage in business AI and a clear plan to expand market share through 2027. Growing adoption of its Rise with SAP and Grow with SAP offerings is expected to have been a key driver. In the fourth quarter, cloud revenues increased 19% year over year on a non-IFRS basis, driven by 23% growth in Cloud ERP Suite revenues. Cloud revenue, being higher-margin, recurring and core to SAP’s valuation, remains crucial.
AI is emerging as SAP’s next major growth driver. The company is pushing growth with a differentiated AI strategy focused on Joule, embedded AI agents, industry-specific solutions and Business Data Cloud, which integrates SAP and non-SAP data. AI-powered ERP migration tools help lower costs and speed up adoption. Strong customer uptake is expected to have boosted deal momentum in the first quarter, while SAP’s internal AI initiatives aim for about €2 billion in annual cost savings by 2028, strengthening its leadership in business AI.
In the fourth quarter, two-thirds of cloud order entries included AI features, a rise of more than 20 percentage points sequentially, indicating rapid customer adoption. Among the 50 largest deals, 90% included AI or SAP Business Data Cloud, with adoption of the AI CoPilot tool increasing ninefold compared to 2025.
SAP has been implementing a profitability improvement strategy in conjunction with its cloud transition. Non-IFRS operating profit rose 16%, with margin increasing to 29.2% in the fourth quarter. Key drivers include a shift toward higher-margin cloud revenue, ongoing cost optimization and reduced reliance on traditional services. The first quarter is expected to have witnessed operating margin expansion, confirming that cloud growth is not diluting profitability. SAP is targeting €10 billion in free cash flow for 2026 and has already announced a €10 billion share buyback program, running through the end of 2027. Combined with roughly €8 billion in prior buybacks, SAP is signaling confidence in durable cash flows, margin expansion and shareholder-friendly capital allocation.
SAP’s growth outlook for 2026 and beyond is anchored by a strong cloud transformation backlog, continued migration of its installed base to the cloud and steady up- and cross-selling opportunities. The company is also expanding into the mid-market and targeting new customers, while leveraging its leadership in Business AI and Business Data Cloud to gain market share. Supported by solid deal momentum, rising cloud conversion rates and increasing AI-driven demand, SAP appears well-positioned to accelerate revenue growth in the coming quarters. In March 2026, SAP agreed to acquire Reltio Inc., a leading master data management provider, to help customers prepare both SAP and non-SAP data for AI use. The deal will enhance SAP Business Data Cloud and support SAP’s AI-First, Suite-First strategy by advancing a more interoperable, enterprise-wide data platform for agentic AI.
However, U.S.–China trade tensions and tariffs continue to weigh on SAP’s software license revenues, while cloud backlog growth has moderated. Although fourth-quarter current cloud backlog rose 25% (slightly below expectations), the shortfall was due to deal mix, not weak demand, with larger, back-end–loaded and government contracts limiting near-term recognition. Geopolitical uncertainty is also lengthening sales cycles, especially for complex sovereign SaaS deals, which take longer to close and ramp. Additionally, exposure to cybersecurity risks remains a concern, adversely impacting costs and reputation.
What Our Model Says About SAP
Our proven model does not predict 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 not the case here.
SAP has an Earnings ESP of -3.36% 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.
Stocks With Favorable Combination
Here are some companies with the right combination of elements to post an earnings beat in their upcoming releases.
CNC is set to report quarterly numbers on April 28, before market open. The Zacks Consensus Estimate for Centene’s bottom line is pegged at $1.85. CNC has topped earnings estimates in three of the last four quarters and missed once, with an average beat of 60.5%. Revenues for the upcoming reported quarter are projected to be around $47.47 billion.
Lear Corporation (LEA - Free Report) is slated to release first-quarter 2026 results on May 1. The company has an Earnings ESP of +3.10% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for Lear’s earnings and revenues is pegged at $3.30 per share and $5.87 billion, respectively. LEA surpassed earnings estimates in each of the trailing four quarters, with the average surprise being 14.26%.
Lucid Group, Inc. (LCID - Free Report) is slated to release first-quarter 2026 results on May 5. The company has an Earnings ESP of +2.51% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for Lucid’s loss per share and revenues is pegged at $2.72 and $428.67 million, respectively. The company delivered a trailing four-quarter average negative earnings surprise of almost 29.92%.
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SAP's Q1 Earnings Loom: Will Cloud Backlogs & Deal Wins Fuel Upside?
Key Takeaways
SAP SE (SAP - Free Report) is scheduled to post results for the first quarter of 2026 on April 23, after market close.
The Zacks Consensus Estimate for first-quarter earnings is $1.91 per share, indicating a 26.5% increase from the year-ago reported actuals. The Zacks Consensus Estimate for revenues is currently pinned at $11.26 billion, implying a 18.8% jump 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 7.4%. Shares of the company have fallen 27.7% in the past year against the Computers - Software industry's growth of 11.9%.
Image Source: Zacks Investment Research
Critical Drivers Shaping SAP’s Upcoming Q1 Earnings
SAP’s first-quarter earnings are likely to have been supported by a healthy cloud backlog, strong growth in cloud revenues and increasing AI momentum, with management highlighting its competitive advantage in business AI and a clear plan to expand market share through 2027. Growing adoption of its Rise with SAP and Grow with SAP offerings is expected to have been a key driver. In the fourth quarter, cloud revenues increased 19% year over year on a non-IFRS basis, driven by 23% growth in Cloud ERP Suite revenues. Cloud revenue, being higher-margin, recurring and core to SAP’s valuation, remains crucial.
AI is emerging as SAP’s next major growth driver. The company is pushing growth with a differentiated AI strategy focused on Joule, embedded AI agents, industry-specific solutions and Business Data Cloud, which integrates SAP and non-SAP data. AI-powered ERP migration tools help lower costs and speed up adoption. Strong customer uptake is expected to have boosted deal momentum in the first quarter, while SAP’s internal AI initiatives aim for about €2 billion in annual cost savings by 2028, strengthening its leadership in business AI.
SAP SE Price and EPS Surprise
SAP SE price-eps-surprise | SAP SE Quote
In the fourth quarter, two-thirds of cloud order entries included AI features, a rise of more than 20 percentage points sequentially, indicating rapid customer adoption. Among the 50 largest deals, 90% included AI or SAP Business Data Cloud, with adoption of the AI CoPilot tool increasing ninefold compared to 2025.
SAP has been implementing a profitability improvement strategy in conjunction with its cloud transition. Non-IFRS operating profit rose 16%, with margin increasing to 29.2% in the fourth quarter. Key drivers include a shift toward higher-margin cloud revenue, ongoing cost optimization and reduced reliance on traditional services. The first quarter is expected to have witnessed operating margin expansion, confirming that cloud growth is not diluting profitability. SAP is targeting €10 billion in free cash flow for 2026 and has already announced a €10 billion share buyback program, running through the end of 2027. Combined with roughly €8 billion in prior buybacks, SAP is signaling confidence in durable cash flows, margin expansion and shareholder-friendly capital allocation.
SAP’s growth outlook for 2026 and beyond is anchored by a strong cloud transformation backlog, continued migration of its installed base to the cloud and steady up- and cross-selling opportunities. The company is also expanding into the mid-market and targeting new customers, while leveraging its leadership in Business AI and Business Data Cloud to gain market share. Supported by solid deal momentum, rising cloud conversion rates and increasing AI-driven demand, SAP appears well-positioned to accelerate revenue growth in the coming quarters. In March 2026, SAP agreed to acquire Reltio Inc., a leading master data management provider, to help customers prepare both SAP and non-SAP data for AI use. The deal will enhance SAP Business Data Cloud and support SAP’s AI-First, Suite-First strategy by advancing a more interoperable, enterprise-wide data platform for agentic AI.
However, U.S.–China trade tensions and tariffs continue to weigh on SAP’s software license revenues, while cloud backlog growth has moderated. Although fourth-quarter current cloud backlog rose 25% (slightly below expectations), the shortfall was due to deal mix, not weak demand, with larger, back-end–loaded and government contracts limiting near-term recognition. Geopolitical uncertainty is also lengthening sales cycles, especially for complex sovereign SaaS deals, which take longer to close and ramp. Additionally, exposure to cybersecurity risks remains a concern, adversely impacting costs and reputation.
What Our Model Says About SAP
Our proven model does not predict 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 not the case here.
SAP has an Earnings ESP of -3.36% 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.
Stocks With Favorable Combination
Here are some companies with the right combination of elements to post an earnings beat in their upcoming releases.
Centene Corporation (CNC - Free Report) has an Earnings ESP of +18.89% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
CNC is set to report quarterly numbers on April 28, before market open. The Zacks Consensus Estimate for Centene’s bottom line is pegged at $1.85. CNC has topped earnings estimates in three of the last four quarters and missed once, with an average beat of 60.5%. Revenues for the upcoming reported quarter are projected to be around $47.47 billion.
Lear Corporation (LEA - Free Report) is slated to release first-quarter 2026 results on May 1. The company has an Earnings ESP of +3.10% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for Lear’s earnings and revenues is pegged at $3.30 per share and $5.87 billion, respectively. LEA surpassed earnings estimates in each of the trailing four quarters, with the average surprise being 14.26%.
Lucid Group, Inc. (LCID - Free Report) is slated to release first-quarter 2026 results on May 5. The company has an Earnings ESP of +2.51% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for Lucid’s loss per share and revenues is pegged at $2.72 and $428.67 million, respectively. The company delivered a trailing four-quarter average negative earnings surprise of almost 29.92%.