SAP released its financial results for Q4 and full fiscal year 2024, marking a strong finish to the year.
For the fourth quarter of 2024, SAP’s cloud strategy continued to show positive momentum. SAP’s current cloud backlog reached €18.08 billion, reflecting a 32% year-over-year growth, with cloud revenue rising by 27% to €4.71 billion. The growth was mainly driven by the Cloud ERP Suite, which saw a 35% increase in revenue, reaching €3.95 billion. Other parts of the cloud business, such as the Extension Suite, showed more modest growth of 9%.
The company’s overall revenue for the quarter increased by 11%, totaling €9.38 billion. Software and cloud revenue combined saw an increase of 12%, reaching €8.27 billion, while total services revenue rose by 2% to €1.11 billion. SAP’s cloud gross profit increased by 29%, showing the company’s strong position in the market.
Strong Performance of SAP for Q4 and Full Fiscal Year 2024
Looking at the full fiscal year, SAP’s cloud revenue surged by 25%, amounting to €17.14 billion. The company’s total revenue for the year was €34.18 billion, up 10% compared to the previous year. Despite the growth in the cloud segment, SAP’s software license revenue saw a decline of 21% to €1.4 billion. However, the combined cloud and software revenue grew by 11%, while total revenue grew by 10%.
Christian Klein, CEO of SAP, acknowledged the company’s strong performance, stating that the growth in cloud order entries, particularly in artificial intelligence (AI) and data, has positioned SAP well for accelerated growth in the years to come. SAP’s cloud backlog stood at €63.29 billion by the end of 2024, marking an increase of 43% compared to the previous year, which highlights the strong future revenue stream.
Dominik Asam, CFO of SAP, emphasized the company’s “strong” closing to the year, noting that SAP surpassed its cloud and software revenue targets, as well as its non-IFRS operating profit and free cash flow projections. Asam also mentioned that SAP’s Ambition 2025 strategy, set four years ago, is solidly aligned with the SAP Q4 Results 2024, providing a foundation for continued growth in the coming years.
Strategic Solutions and Restructuring Behind SAP’s Growth
SAP’s growth trajectory was underpinned by the continued success of its solutions such as RISE with SAP and GROW with SAP. These platforms have become key enablers for digital transformation among enterprises globally. Several high-profile customers, including BASF, Chevron, Colgate-Palmolive, and Red Bull, chose RISE with SAP to drive end-to-end business transformations. Meanwhile, smaller organizations adopted GROW with SAP to streamline their ERP operations, benefiting from SAP’s cloud technology and predictive analytics.
Additionally, SAP’s transformation program, announced in early 2024, continued to contribute to its strategic direction. The program, which aims to improve scalability and focus on key growth areas, included restructuring expenses totaling €3.2 billion. The program’s costs had an impact on the company’s free cash flow, which decreased by 19% to €4.11 billion for the full year, mainly due to restructuring payouts.
Global Performance and Regional Highlights
SAP’s global cloud revenue performance was particularly strong in the Asia-Pacific Japan (APJ) and Europe, Middle East, and Africa (EMEA) regions. Notably, countries such as China, France, India, South Korea, and the Netherlands delivered outstanding performances. The Americas region also showed growth, with countries like the United States, Canada, and Brazil contributing significantly to the overall cloud revenue.
The company’s expansion into key international markets continues to gain traction, with major companies like Ford, General Motors, and Hyundai going live with SAP’s S/4HANA Cloud solutions. Additionally, SAP’s solutions were adopted by organizations in diverse industries, including automotive, manufacturing, retail, and healthcare. Notable new customers included ABB, Bayer, PwC Germany, and Digital China, while organizations like IBM and Tchibo successfully launched SAP solutions during the year.
As SAP moves into 2025, it is focused on leveraging its strengths in data management, AI, and cloud services to drive growth. The company intends to continue building on its cloud platform capabilities and expanding its portfolio of industry-specific solutions. SAP’s Ambition 2025, which envisions further revenue growth through 2027, will be supported by the company’s increased investment in innovative technologies such as AI and machine learning.
Additionally, SAP’s commitment to sustainability remains a key component of its corporate strategy. Although carbon emissions remained steady at 6.9 million metric tons in 2024, SAP continues to focus on reducing its environmental footprint as part of its long-term corporate responsibility goals.
SAP Q4 Results 2024 highlight its resilience and continued success in the cloud and enterprise solutions market. The company’s financial performance and strong customer adoption of its key offerings provide a solid foundation for continued growth in 2025 and beyond. SAP’s strategy of investing in cloud technology, AI, and digital transformation solutions ensures its position as a leader in the enterprise software market.