SAP Q1 2025 Earnings Report

SAP EPS Results

• Actual EPS: $1.51
• Consensus EPS: $1.39
• Beat/Miss: Beat by +$0.12
• One Year Ago EPS: N/A

SAP Revenue Results

• Actual Revenue: $10.35 billion
• Expected Revenue: $9.08 billion
• Beat/Miss: Beat by +$1.26 billion
• YoY Revenue Growth: N/A

SAP Announcement Details

• Quarter: Q1 2025
• Date: 4/22/2025
• Time: After Market Closes
• Conference Call Date: Tuesday, April 22, 2025
• Conference Call Time: 5:00PM ET

SAP (NYSE:SAP), together with its subsidiaries, provides applications, technology, and services worldwide. It offers SAP S/4HANA that provides software capabilities for finance, risk and project management, procurement, manufacturing, supply chain and asset management, and research and development; SAP SuccessFactors solutions for human resources, including HR and payroll, talent and employee experience management, and people and workforce analytics; and spend management solutions that covers direct and indirect spend, travel and expense, and external workforce management. The company also provides SAP customer experience solutions; SAP Business Technology platform that enables customers and partners to build, integrate, and automate applications; and SAP Business Network, a business-to-business collaboration platform that helps digitalize key business processes across the supply chain and enables communication between trading partners. In addition, it offers SAP Signavio to help customers to discover, analyze, and understand their business process operations; SAP's industry cloud solutions that provides modular solutions addressing industry-specific functions; Taulia solutions for working capital management to help enable customers mitigate the effects of inflation by providing visibility into working capital and access to liquidity; and sustainability solutions and services. SAP SE was founded in 1972 and is headquartered in Walldorf, Germany.

SAP Q1 2025 Earnings Call Transcript

Presentation

[Alexandra Steiger, Global Head of Investor Relations at SAP]

Good evening, everyone, and welcome. Thank you for joining us. With me today are CEO, Christian Klein and CFO, Dominik Assam. On this call, we will discuss SAP's first quarter twenty twenty five results. You can find the deck supplementing this call as well as our quarterly statement on our Investor Relations website.

[Alexandra Steiger, Global Head of Investor Relations at SAP]

During this call, we will make forward looking statements, which are predictions, projections or other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties that could cause actual results and outcome to differ materially. Additional information regarding these risks and uncertainties may be found in our filings with the SEC, including but not limited to the Risk Factors section of our annual report on Form 20 F for 2024. Unless otherwise stated, all numbers on this call are non IFRS, and growth rates and percentage point changes are non IFRS year on year at constant currencies. The non IFRS financial measures we provide should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with IFRS.

[Alexandra Steiger, Global Head of Investor Relations at SAP]

Before we begin, I'd like to call your attention to our upcoming financial analyst conference, which will take place on May 21 as part of our Sapphire event in Orlando, Florida. If you're interested in joining us in person, please reach out to our Investor Relations team for more information. For those who can't attend on-site, a live stream will be provided on our website. And with that, over to you, Christian.

[Christian Klein, CEO & Member of Executive Board at SAP]

Yes. Thanks, Alexandra, and a warm welcome to everyone on the line. Q1 was a very fast paced start to the year. Given the macroeconomic environment, I'm very happy to say that SAP did really well in the quarter. Thanks to our transformation, SAP ended the current phase of the world economy with greater resilience than ever.

[Christian Klein, CEO & Member of Executive Board at SAP]

Our current cloud backlog expanded 29% to EUR18.2 billion in Q1. Our quarterly cloud revenue is now close to the EUR5 billion mark showing a 26% increase. Overall, the share of more predictable revenue is now at 86%. Our very large cloud backlog and high recurring revenue share will be the foundation for double digit total revenue growth in 2025 and for many years to come. Operating profit was up 58 in Q1, and our stellar cloud gross margin improved by 2.6 percentage points to 75%.

[Christian Klein, CEO & Member of Executive Board at SAP]

Thanks to the diligent execution of SAP's transformation, also our operating profit will grow double digit in 2025 and the years to come. Just last week, IDC and Gartner released new reports underlining our market momentum. IDC's update on software market share for the full year 2024 confirms SAP as the worldwide number one enterprise application software vendor. And in cloud, according to IDC, SAP experienced the strongest year over year growth among the top 10 enterprise application SaaS companies. As for Gartner, in their WW enterprise software report, SAP is the number one by revenue in 2024 for overall ERP.

[Christian Klein, CEO & Member of Executive Board at SAP]

Of course, no one can really predict how the global economy will develop throughout 2025. Without any doubt, uncertainty in the market remains high. However, several factors make us confident that SAP remains on track towards our 2025 outlook ranges. First, I just mentioned SAP's highly resilient business and financial module and our excellent market position. Second, our pipeline for the year continues to look very solid.

[Christian Klein, CEO & Member of Executive Board at SAP]

Third, no other tech company can offer a solution portfolio which is more relevant in times of new regulations, tariffs, and business uncertainty. Our globalization team localizes SAP's portfolio, including solutions like Global Trade Services Management. That enables our customers to manage every single global transaction in real time and fully compliant in over 130 countries. To steer the companies through uncertain times, our customers can run real time financial simulations based on internal and external data with SAP Business Data Cloud. To adapt the company's business plan to new market realities, SAP's Analytics Cloud and IPP integrate in real time sales, supply chain, HR, spend and financial planning with each other to make cross company decisions fast and in harmony.

[Christian Klein, CEO & Member of Executive Board at SAP]

And finally, across our portfolio, embedded AI and tool are boosting the productivity of a company to offset financial pressure. Net net, this means SAP's portfolio is highly relevant. We can't change external uncertainty, but we can help our customers like no other company to manage those challenges compliant with high agility and empowered by AI. Now, let me share a quick summary of the quarter. The figures underline once more that SAP's growth formula is solid.

[Christian Klein, CEO & Member of Executive Board at SAP]

We have done our homework and we benefit from that. Current cloud backlog kept growing with a very high pace in Q1. Cloud revenue continued to grow strongly even as the base has expanded. Total revenue growth moved further into double digit territory. Operating profit, operating margin, and cloud cost margin performance have and will heavily benefit from our transformation program.

[Christian Klein, CEO & Member of Executive Board at SAP]

And again, about half of our cloud order entry were deals that included AI use cases. The deals in Q1 offer a compelling insight into how customers are navigating the current business environment. Let me start with an impressive series of major deals in the automotive sector. As you know, the car industry is undergoing an extensive transformation. New business models and competitors are emerging.

[Christian Klein, CEO & Member of Executive Board at SAP]

Cost pressure is increasing. Sustainability continues to be a challenge. And there is the need to adapt to a changing global trade system including tariffs. How does the industry deal with these challenges? As our customer wins indicate, auto companies rely on SAP's industry best practices, solutions and tools to transform their value chains by embracing the cloud and AI.

[Christian Klein, CEO & Member of Executive Board at SAP]

In Q4, as you remember, Robert Bosch and Scheffler signed up for their Wise Journeys and Mahler went live. Now in Q1, others from the Who's Who in the industry joined the ranks, Hyundai, Kia and Mazda as well as the automotive supplier Webasto. Customers in other sectors rely as well on SAP's business transformation offering wise. In Q1, HUGO BOSS, Tyson Foods and the chemical group Science Co and Japan Railway. And in the public sector, the German Federal Employment Agency, Bundesag and Turfjer Abweid, as well as the police force in the state of Bannenberg decided to put their trust in SAP solutions and sovereign cloud technology.

[Christian Klein, CEO & Member of Executive Board at SAP]

For all customers on their wise journeys, we have been accelerating time to value while reducing the implementation costs of SAP projects with excellent AI tools such as tool for developer, tool for consultants, and business transformation tools like Signavio, LeanIX, and WalkMe. As for growth with SAP, twothree of our deals in Q1 were net new customers, which underlines the attractiveness of our offering for fast growing companies in the mid market. One example is Gymshark, a fitness brand who selected us over a competitor. What convinced them to choose SAP was the scalability and core functionality of our suite offering as well as our industry specific solutions for retail. Other examples include the sustainable steel company Steaka as well as VFS, a global provider of Visa application services selecting our end to end business suite applications.

[Christian Klein, CEO & Member of Executive Board at SAP]

Finally, some Q1 customer examples from our lines of businesses. Supply Chain Management, we won Kiongroupe, a global leader in supply chain and logistics solutions. In Human Capital Management, we won the travel company Booking. And AxPro Services, the largest electricity provider in Switzerland, live on SuccessFactors. In Business Networks, we won the media company Times Group India and the mining firm Aman Minerals.

[Christian Klein, CEO & Member of Executive Board at SAP]

And the chocolate company, Alfred Ritter, home to the famous brand Ritter Sport, celebrated a go live in our network. Last but not least, BASF Coatings went live in Q1 on our sustainability portfolio. All these customer stories show how we are winning with our modular business suite and our transformation offerings wise and core with SAP, capturing every customer size and industry. Let me now summarize what happened in Q1 in terms of product innovation, commercials, and simplification. First, let me start with product innovation.

[Christian Klein, CEO & Member of Executive Board at SAP]

In February, we presented one of SAP's most exciting innovations ever and the greatest opportunity since RISE, SAP Business Data Cloud. Business Data Cloud is the new center of gravity for business data. It unifies and governs all data, SAP and non SAP, structured and unstructured. It builds a strong semantical layer with the context, connections, and meaning of data. And thanks to our new partnership with Databricks, Business Data Cloud will become the number one offering in the data analytics market.

[Christian Klein, CEO & Member of Executive Board at SAP]

Thanks to the Business Data Cloud strong value proposition, the pipeline for the coming quarters is building up very nicely. In Q1 alone, we closed 20 deals, including Kion Group, Willer Roy and Boch, the pharma company Ferring and the metals manufacturer Tibnor. Business Data Cloud is not only groundbreaking in how it brings together data. It is also a pillar for high performing end to end AI agents. Why?

[Christian Klein, CEO & Member of Executive Board at SAP]

Because it takes three things to build truly powerful AI agents. First, access to a harmonized data layer with strong semantics. That's SAP's business data cloud. Second, a smart AI stack, toying on the best Chen AI modules and technologies. That is SAP Business AI.

[Christian Klein, CEO & Member of Executive Board at SAP]

Third, fully integrated applications so agents can cover business processes end to end. That is our SAP business suite. SAP is the only company to have all three of these pillars in place. And that puts us in a unique and very strong position to win in the agentic AI space. When we work with customers, AI adoption is more than a one time event.

[Christian Klein, CEO & Member of Executive Board at SAP]

It's a journey. Take for example Standard Chartered Bank. They went live with the first AI use cases in SuccessFactors. They then released tool to over 80,000 employees and are leveraging the Chen AI hub. With all our AI customers, we systematically drive adoption from the first implementations of use cases all the way through to AgenDick AI.

[Christian Klein, CEO & Member of Executive Board at SAP]

At Sapphire, we will make exciting announcements about our AI capabilities. Continuing now on the topic of innovation, we are also evolving our commercials. We are updating our Wise offering with enhanced packages. They now include the solutions for business transformation management, solutions well integrated into our business suite portfolio to accelerate time to value and cut SAP project costs. And with the flexible cloud addendum, we make it easier for customers to switch from private to public cloud within their existing contracts.

[Christian Klein, CEO & Member of Executive Board at SAP]

Besides innovation, we continue to focus on our own productivity in these turbulent times. And we are transforming the company along the way. We are fully on track to deliver the internal AI efficiencies for this year. Let me share some examples with you. Our consultants save up to ninety minutes per day with tool for consultants.

[Christian Klein, CEO & Member of Executive Board at SAP]

Tool helps them for instance to find and use best practices, analyze unfamiliar code, and prevent suboptimal design and implementation errors. And with AI tools such as tool for developers, our coders are 30% more productive, accelerating our innovation pace. Finally, in addition to the internal use of AI, we are rolling out a standardized and automated cloud contract starting this quarter, reducing the time from the quote to provisioning a system to under twenty four hours. All in all, our productivity gains help us to decouple top line growth and costs. They also give us flexibility to hire less than originally planned.

[Christian Klein, CEO & Member of Executive Board at SAP]

And when we hire, we can focus on growth areas with targeted job profiles, for example, in AI. Now let me conclude. We delivered a strong Q1. Customers seek our advice and solutions in uncertain times. And we have laid a very strong foundation for a resilient company, and we will continue to do so through product innovation, simplification and an even better go to market setup.

[Christian Klein, CEO & Member of Executive Board at SAP]

It is difficult to make projections for the entire year, but all the aspects I just mentioned make us confident for the longer term. We are in the right place. We are doing the right things, and this will pay off. At SAPPHIRE and MAY, we will go deeper into these areas and look at the next chapters of SAP's core story. I would be delighted to see you all there.

[Christian Klein, CEO & Member of Executive Board at SAP]

And with that,

[Christian Klein, CEO & Member of Executive Board at SAP]

over to you, Dominik.

[Dominik Asam, CFO & Member of Executive Board at SAP]

Thank you very much, Christian, and thank you all for joining us this evening. We kick off 2025 on a high note driven by the continued acceleration of total revenue and a whopping increase in operating profit in the first quarter. Our current cloud backlog remains healthy despite the volatile and challenging macro environment. This performance reflects the strength of our strategy, the momentum of the Cloud ERP suite and the impact of our strict cost discipline, which renders our profitability and free cash flow more resilient.

[Dominik Asam, CFO & Member of Executive Board at SAP]

With the 2024 transformation program now concluded, we're well positioned to execute on our priorities this year, including focused investments as we expand our suite first, AI first approach throughout our portfolio. Across industries and organizations of all sizes, from the world's largest enterprises to growing businesses looking to scale quickly, we continue to see high customer engagement as companies turn to us for end to end business transformation. Now let me provide more details around our financial highlights. Current cloud backlog reached €18,200,000,000 up 29%. Cloud revenue grew by 26% year on year supported by the strong performance of the Cloud ERP suite, which maintained its high growth momentum with a 33% increase in Q1.

[Dominik Asam, CFO & Member of Executive Board at SAP]

It accounted for 85% of total cloud revenue in the first quarter, underlying its strengthening position as a key contributor to our growth. As cloud bookings were again very back end loaded in the fourth quarter of last year, some cloud contracts which entered current cloud backlog as of year end twenty twenty four were provisioned only later during the first quarter. So they will only be visible in cloud revenues for a full quarter in Q2. And the deterioration in macroeconomic conditions continue to weigh on transactional cloud revenues. Software licenses turned out to be surprisingly resilient and decreased by only 10%.

[Dominik Asam, CFO & Member of Executive Board at SAP]

But given that Q1 tends to be a small quarter for software licenses, I would caution you not to extrapolate too much from that. Finally, total revenue came in at €9,000,000,000 up 11. So now let's take a brief look at our regional performance. In the first quarter, SAP's cloud revenue performance was particularly strong in APJ and EMEA and robust in the Americas region. Brazil, Chile, Germany, India, Italy, South Korea, and Spain had outstanding performances, while Canada, China, France, Japan, Singapore, and The US were particularly strong.

[Dominik Asam, CFO & Member of Executive Board at SAP]

Now moving down to the income statement. Our non IFRS cloud gross margin for the quarter continued its upward trend and expand by 2.6 percentage points to 75%, driving cloud gross profit up by 30%. IFRS operating profit increased to €2,300,000,000 in the quarter, positively impacted by a restructuring expense decline of €2,200,000,000 in the context of the 2024 transformation program. In the first quarter, non IFRS operating profit was up 58% to 2,500,000,000 way above the 26% to 30% growth rate we have guided for the full fiscal year 2025, a highly welcome head start to derisk our bottom line guidance in times of environment, which I trust you will all agree has become much more risky. Both IFRS and non IFRS operating profit growth benefited from the operational efficiencies realized through successful execution of the 2024 transformation program.

[Dominik Asam, CFO & Member of Executive Board at SAP]

The IFRS effective tax rate in Q1 was 27.2% and the non IFRS tax rate was 29.4%. Operating cash flow in the first quarter was up by 31% to EUR 3,800,000,000.0 and free cash flow increased by 36% to EUR 3,600,000,000.0. The increase was mainly attributable to the higher operating profit. Finally, basic IFRS earnings per share increased to €1.52 and non IFRS earnings per share increased to €1.44 So moving on to the outlook. As you've likely seen in the quarterly statement published a little bit earlier today, we decided to leave our 2025 outlook across all metrics unchanged.

[Dominik Asam, CFO & Member of Executive Board at SAP]

While our pipeline remains healthy, conversion rates could be negatively affected by further deceleration of current trade disputes. Needless to say that a rapid unwinding of decades of productivity gains driven by the benefits of globalization in the context of an escalating trade war would likely result in a severe global recession. I want to stress that our outlook is not based on such an adverse scenario, but rather assumes conversion rates consistent with prior quarters and years. In light of the risk of escalation, we remain fully focused on disciplined execution and safeguarding both our bottom line and free cash flow by prudent cost management and other elements within our control. In summary, Q1 reflects a strong start to the year, highlighted by continued total revenue acceleration and standout profitability.

[Dominik Asam, CFO & Member of Executive Board at SAP]

The momentum we continue to see in the Cloud ERP suite provides a certain degree of visibility and reinforces our confidence in SAP's long term success. As macro uncertainty persists, we are more focused than ever on disciplined execution, protecting our bottom line and free cash flow throughout the remainder of the year. Before we move on to the Q and A, I would like to say that we are very much looking forward to welcoming as many as you of you as possible to our financial analyst conference in May. As Alexandra mentioned already and Christian too, it will take place again in conjunction with Sapphire in Orlando. It is a unique opportunity to do some serious tire kicking of our solution portfolio and ecosystem, and the team and I are very much looking forward to meeting you there in person.

[Alexandra Steiger, Global Head of Investor Relations at SAP]

Alright. Thank you, Dominik. And with that, we will now take your questions. I would like to kindly remind you to only ask one question when prompted. Operator, please open the line.

[Operator]

Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their touch tone telephone. If you are using speaker equipment today, please lift the handset before making your selections. Again, anyone who has a question may press star followed by one at this time. One moment for the first question, please.

[Operator]

The first question is from the line of Michael Briest with UBS. Your line is

[Operator]

now open.

[Michael Briest, Stock Analyst at UBS Group]

Guess I'll start thank you. I I I guess I'll start with a question on sort of current trading. Some other companies have talked about some disruption at the end of the quarter. Obviously, we're nearly, through April as well.

[Michael Briest, Stock Analyst at UBS Group]

You said your assumption is that that historical close rates continue. Is that valid given what you've seen in in the last few weeks? I know you called out the automotive examples of of success. Is there anything else you can give us to to underpin the confidence on on the cloud revenue guidance, especially given the transactional businesses you mentioned, Dominic?

[Christian Klein, CEO & Member of Executive Board at SAP]

Yeah. Michael, I can start, and then please, Dominic, comment as well. I mean, look, I just did a travel to The United States. I was in Australia. I was in Korea, Seoul.

[Christian Klein, CEO & Member of Executive Board at SAP]

And when you talk to our customers, also after all the new regulations hit the market, I mean, the conversation really centers around how can we help to gain resiliency in supply chain, how we can we help to manage tariffs. I mean, all these, especially the multinationals, they have to run a compliant business everywhere in the world. On the sourcing side, how can we pick the right suppliers given all the tariffs which are in place? And then obviously, what can we do on with the Business Data Cloud you just released, which landed extremely well in the market to simulate and to adjust our plans to the new market reality. So that actually gives me the confidence.

[Christian Klein, CEO & Member of Executive Board at SAP]

I mean, Michael, what of course also came up is the cost for an SAP project. And there we are targeting also with tool for developer, tool for consultants, which are also, again, we're getting really, really good feedback about how can we cut costs in implementing our business suite, how can we accelerate the faster time to value. These are not the days where you can come to a customer and lay down a several hundred million dollar project without having also some instant value in the business case. And that actually has resonated really well in the last weeks. The pipeline also for the year, as I mentioned, remains intact.

[Christian Klein, CEO & Member of Executive Board at SAP]

We really see that we have solid, really good pipeline for the year. And so far, also not in April, we have not yet seen that there is any deterioration of conversion rates in the pipeline. But of course, Michael, I mean, who has a crystal ball these days? We are watching the geopolitics very closely and, of course, you know, also observe what is coming.

[Operator]

Next question is from the line of Ben Castillo with BNP Paribas. Your line is now open.

[Ben Castillo-Bernaus, Executive Director at BNP PARIBAS EXANE]

Good evening. Thanks very much for taking my question. Just on the cloud revenue growth, decelerated a little from what we saw at q four. How much of that deceleration was caused by, you mentioned, the later timing of some cloud deals that you signed in q four? How much of that came from maybe some delayed ramp ups from some deals?

[Ben Castillo-Bernaus, Executive Director at BNP PARIBAS EXANE]

Or how much came from the transactional apps? If you could just help us break apart that slight deceleration. I guess as a follow-up, you need a bit of an acceleration here to get back to that guidance growth range for cloud revenue. When can we expect that to come back? Is that something that can come back in Q2 as those Q4 deals start to ramp up, or is that something that needs to happen later in the year?

[Ben Castillo-Bernaus, Executive Director at BNP PARIBAS EXANE]

Thank you.

[Dominik Asam, CFO & Member of Executive Board at SAP]

Yeah. Maybe this is also a good opportunity to also answer the transactional revenue question, which has been also raised in the prior question. So indeed, the transactional revenues in Q1 were back to a slight decline. You recall in Q4, we were actually going up a little bit, slightly up. So indeed here, given that this is the most exposed business to macro, not surprisingly, it has also seen a relatively weak performance in the first quarter.

[Dominik Asam, CFO & Member of Executive Board at SAP]

On the back end loading of the transactions, there is a certain lead time for provisioning these cloud deals. So it's, very clear that when you embark these deals in the backlog at the very end of the quarter in q four that maybe January, February, they are not fully effective in revenues. And you then have a step up in Q2 when it's full year full quarter effective. So that's that's a meaningful delta and and has been a little bit of that effect also seen in q ones of prior years, but not to the same extent that this year. We we do think that also in q two, we'll see a certain acceleration again because the comps are frankly easier.

[Dominik Asam, CFO & Member of Executive Board at SAP]

Let's not forget that any single quarter in cloud revenue can always be a little bit distorted by what happened in the prior year's quarter in terms of maybe some debooking. So for instance, in q two last year, we had a hit with a customer that went into a financial distress situation that we stopped booking cloud revenues on, and and that, of course, makes then the comps for q two easier. So still, we believe that the CCB is a good indicator of how the next four quarters will look. You know, it's the kind of contractually committed rolling four quarters ahead. Yes.

[Dominik Asam, CFO & Member of Executive Board at SAP]

We have to take the haircut from transaction revenues, which is maybe a little bit higher than what we had intition initially expected. And and then it also leaves a question about the macro, which we discussed in the prior question. I mean, needless to say that before the upper half of our guidance range to materialize on cloud revenues, people need need to see a pretty benign outcome of these trade disputes that actually we would need to see some resolutions on these disputes quite quickly and to a large extent. In an adverse scenario, of course, it's anyone's guess as Christian mentioned what type of GDP impact that might be, and I think also that is premature now to to try to forecast. So that is a little bit of color I wanna give around that.

[Dominik Asam, CFO & Member of Executive Board at SAP]

So not an easy environment, but as Christian mentioned, we are solidly in track. The the fundamental pillars of our growth are stable, and customers are grappling for productivity gains and trying to reduce reduce cost with our tools.

[Operator]

The

[Operator]

next question is from the line of Toby Ogg with JPMorgan. Please go ahead.

[Toby Ogg, Research Analyst at JP Morgan]

Yeah. Hi, and thanks for the question. Perhaps just on the current cloud backlogs at 29% in the quarter, stable versus the 29% exit rate and tracking. I know it's just Q1, but tracking above the current full year guidance for a slight deceleration. Has the current cloud backlog tracked above your expectations in Q1?

[Toby Ogg, Research Analyst at JP Morgan]

And if so, what was the driver of that? And then could you also just give us a sense for what you're seeing under the surface in the backlog, particularly in March and April, across various end markets and customer groups? Are you seeing any different dynamics because of all the tariff uncertainty with some verticals potentially holding back a bit, but others perhaps moving a bit quicker? Or are you seeing very similar trends to what you've been seeing over the past few quarters despite all all the incremental tariff uncertainty? Thank you.

[Dominik Asam, CFO & Member of Executive Board at SAP]

Okay. Maybe on the CCB, it it was actually expected because, the same technical effect I described with the provisioning lead times is also affecting CCB. If you have these late quarter end closings, they are, of course, in the backlog. But for the CCB, they might not be for twelve months in the backlog, but maybe for ten or eleven. And then when you roll it forward to March, they are actually in the backlog for a full twelve month plus the ramps included in these deals.

[Dominik Asam, CFO & Member of Executive Board at SAP]

So that is was clearly something we'd expected. So it's a little bit kind of an artifact, I'd say, from that back end loading of the seasonality of q four, which will normalize. So I'm we are still fully in line with the guidance we've given to a slight deceleration. Also, recall that towards the end of the year, the CCB boost by the acquisition of WalkMe will also fade out. So we're very much on track, I'd say.

[Christian Klein, CEO & Member of Executive Board at SAP]

Maybe on the industry question,

[Christian Klein, CEO & Member of Executive Board at SAP]

do we see differences now in industry, how the pipeline and the conversion rates now unfold? And now, I mean, you see that in Q1, we signed many auto companies. And to Dominic's point, in these conversations with the auto companies, I mean, oftentimes, the business case is built around supply chain, It's built around productivity with AI. It's also about the change of the business module around order to cash. So it's not right to say these industries, which are maybe hit it hard now short term by tariffs now by less software.

[Christian Klein, CEO & Member of Executive Board at SAP]

No, we are not seeing this correlation yet in the pipeline.

[Operator]

Next question is from the line of Charlie Brennan with Jefferies. Please go ahead.

[Charles Brennan, SVP - Equity Research at Jefferies Financial Group]

Hi, there. Thanks for taking my question. Understandably, a lot of questions there on the macro and visibility in the business. Can we just touch on product innovation for a moment? There's obviously a lot of focus on the business data cloud.

[Charles Brennan, SVP - Equity Research at Jefferies Financial Group]

Can you just give us a very simple explanation to how that differs from the original SAP DataSphere? And how do we think about that being incremental to what you're doing as opposed to just a rebranding, of original data strategy? Thank you.

[Christian Klein, CEO & Member of Executive Board at SAP]

Happy to do so, Charles. I mean, look, DataSphere was really centered around by the way, many other offerings in the market was centered around optimizing the technical integration between SAP, our business warehouse, HANA, and non SAP data lakes to avoid replication of data, which is costly, cost performance, and also imposes a security risk. So DataSphere was definitely a good step in the right direction. Now business data cloud is much, much more. And it's also playing a little bit with the strategy what SAP had in the past around data.

[Christian Klein, CEO & Member of Executive Board at SAP]

In the on premise world, in BW, we never shared our data module. The data module is actually the holy grail of SAP, our our treasure. Now what we are doing with Business Data Cloud, we are saying, if you are now a retailer and you have consumer data sitting in an SAP order, you have consumer data sitting in the supply chain, in the logistics module, in many places in CX, commerce, etcetera. But you for sure also have consumer data in non SAP systems, marketing data, other data, social media data, etcetera. And it was for every single company around the world a big challenge.

[Christian Klein, CEO & Member of Executive Board at SAP]

How can we match those data? How does it really fit to really come to a one customer three sixty? The same for a material, the same for a supplier, the same for an employee. And now what we are saying is we are sharing our data module, for example, for a customer. And what we are doing with Databricks is we are allowing now customers to match all their customer data that they have semantically.

[Christian Klein, CEO & Member of Executive Board at SAP]

And what does this do? Suddenly, you understand more about your customer end to end. This is a real three sixty. And that doesn't require an army of IT people, data scientists to make mean of your data. And then when you think about Business Data Cloud, I mean, obviously, it's it's a pure value if you can steer your business and if you can delight your customers with a true understanding of their data.

[Christian Klein, CEO & Member of Executive Board at SAP]

But then what you can do on AI, I mean, we are seeing this in many AI use cases we are building. I mean, AI is great technology, but what you need what you also need is high data quality. And now suddenly, Chul and our AI agents are not only building and can consume SAP high quality data. Now they consume data products, which are combining also semantically non SAP data. So I guess you see the strong, strong value.

[Christian Klein, CEO & Member of Executive Board at SAP]

And I have to tell you, when we launched RISE, of course, we saw some momentum at the beginning. When I compare this now to Business Data Cloud, we see at least equal, if not stronger momentum with regard to pipeline buildup.

[Operator]

The next question is from the line of Mohamed Moawala with Goldman Sachs. Please go ahead.

[Mohammed Moawalla, Analyst at Goldman Sachs]

Great. Thank you. Hi, Christian. Hi, Dominic. I just had a question.

[Mohammed Moawalla, Analyst at Goldman Sachs]

I mean, around the kind of the the number of deals over kind of 5,000,000 in the order entry continue to tick up despite the environment. I think it was 54% versus 52% a year ago. When you think of of you talked about close rates, but when you think of perhaps some of these larger deals, are you seeing anything from the conversations with customers that they kinda still want to kinda proceed as as planned in terms of size and scope of projects? But when we tend to see some uncertainty, often, there can be some some shifting and elongation there. So it'd be keen to kinda get your perspective on on whether this is kind of sustainable.

[Mohammed Moawalla, Analyst at Goldman Sachs]

And if I could fit in a follow-up just on the FX, Dominic, you've assumed one zero eight. Current rates are one fourteen. Any specific reason why, so you're using the one zero eight? Thank you.

[Christian Klein, CEO & Member of Executive Board at SAP]

I mean, I can start on the large deals. And indeed, you see you see a tick up. And to also further secure those large deals also in the quarters to come, I mean, we, of course, running an extremely diligent account planning process where we really want to understand the value of a deal. I mean, hard quantified value, not only blah, blah, but really quantified value. What does it deliver?

[Christian Klein, CEO & Member of Executive Board at SAP]

Not only TCO, but also ROI. Second, to which C level we are connected. Is the CFO in the loop? Is the CEO in the loop? Is the head of supply chain in the loop?

[Christian Klein, CEO & Member of Executive Board at SAP]

Who is in the loop? IT is great, but we also need the lines of businesses, especially in times like that. And then when you look into some of the larger deals, I mean, you see it actually every time when we report our total cloud backlog, you see there is a phasing in there. So these 5,000,000 plus deals, they are not hitting OpEx wise. And right away, the P and L, there is a phasing.

[Christian Klein, CEO & Member of Executive Board at SAP]

And this phasing is natural given the mission critical nature of SAP projects. You need time for the architects to finalize the architecture, the way how to move to our business suite. You need time to work with the business on the business processes. It's more than only a commodity business where you move to a new hardware. I mean, it's really about business transformation.

[Christian Klein, CEO & Member of Executive Board at SAP]

And that ramp is, of course, then also then good in times like that where customers, of course, want to see with the ramp of the subscription fee, of course, in the same way the value we are delivering, especially to those large customers. Tom Ray?

[Dominik Asam, CFO & Member of Executive Board at SAP]

On the forex, of course, a weaker dollar is headwind for us in the mid to long term. But we have, as you know, a methodology of forecasting at constant currencies. We had 108 last year as the average exchange rate, so that is what we've guided for for 2025. Now with a weaker exchange rate, of course, then the revenues and operating profit would decline. The hedges we are implementing are effective on free cash flow.

[Dominik Asam, CFO & Member of Executive Board at SAP]

They are basically below the line on non IFRS operating profit. And this is why we need that kind of constant currency methodology. But for free cash flow, we've actually hedged a large part of the exposure already at much higher rates. So that's reasonably protected. The sensitivities are such that for $08 of euro dollar exchange rate because of the revenue mix and assuming certain correlation, you would see about $30,000,000 decline in revenues for the full year.

[Dominik Asam, CFO & Member of Executive Board at SAP]

And that's the total revenues. And on cloud, it's a little bit more than half of that, 55% cloud revenues. And the mix, S. Dollar cloud revenue versus total revenue is not so different. It's a little bit higher in cloud revenues than in total revenues.

[Dominik Asam, CFO & Member of Executive Board at SAP]

And then OpEx, but OpEx would also kind of decline because of the dollar expenses. We have close to 40% of our expenses in US dollar. So it's not a huge exposure. But while we are protected on free cash flow for 2025 to a certain degree, 2026 is more more difficult then because then we would suffer really from the decline in the exchange rate. But, I mean, this is why we guided on constant currencies in the past on free cash flow because it's really embarking also the hedges.

[Dominik Asam, CFO & Member of Executive Board at SAP]

It doesn't make sense anymore. So that that kind of currency impact will hit us in a lagged fashion once the hedges basically expire.

[Operator]

The next question is from the line of Adam Wood with Morgan Stanley. Please go ahead.

[Adam Wood, Managing Director - Equity Research at Morgan Stanley]

Hi. Good evening, Christian. Good evening, Dominic, and congratulations on on the first quarter. Maybe just first of all, think, Dominic, you've been reasonably clear that there's, willingness to protect both the profitability and cash flow of business. Could you maybe, I mean, just actually reiterate that, but also more importantly, maybe just give us a little bit of a feeling for how much flexibility there is there?

[Adam Wood, Managing Director - Equity Research at Morgan Stanley]

You obviously come into this year in a great position with headcount down slightly year on year and kind of flattish versus the fourth quarter? And then how far you'd be willing to go in terms of protecting that if the top line were to weaken further? And if I could sneak in just a cheeky follow-up on Charlie's question on the Business Data Cloud. I mean, we've talked about Mason's payments of a notional 20 going up by two to three x. I mean, in that context, could you give us a feel for how big those, Business Data Cloud sales could be if a customer is also to add that into the contract as well as the other things they're upgrading when they go to rise?

[Adam Wood, Managing Director - Equity Research at Morgan Stanley]

Thank you.

[Dominik Asam, CFO & Member of Executive Board at SAP]

Maybe on the profitability, yes, indeed. We are pretty low in headcount. I mean, we've we've seen about 3,000 people leave. We've rehired some people. But currently, we probably are looking for a little bit of more back end loading to see how the situation on the trade dispute will evolve.

[Dominik Asam, CFO & Member of Executive Board at SAP]

So, yes, we are talking about, let's say, a a cushion of several thousand employees we can play with without having any major impact now. But at some point in time, we wanna invest in important topics like AI, like business data cloud, like the further integration of our portfolio. So we will make sure that we balance the kind of near term pressure versus the mid to long term needs to be future proof. There's also some more discretionary spending on on marketing and and topics like that. But, again, I mean, for the time being, I would not see that we throw all that in.

[Dominik Asam, CFO & Member of Executive Board at SAP]

We have to watch what's happening. It's very unpredictable. But we just want to make the comment, there are some levers that we're currently a little bit prudent on how we are going to face these expenses to make sure that we have some room for maneuver should the situation deteriorate.

[Christian Klein, CEO & Member of Executive Board at SAP]

Yes. And just to close this out, mean, Dominic, it's absolutely right. The the and then, of course, we're also not running out of ideas business wise. I mean, when you look at the cloud cost margin, when you look at the TCO of our solutions, the harmonization of the technical stacks, now we are working hard to also further harmonize our delivery, our life cycle management around those solutions. So we further optimize our HANA Cloud database, which, by the way, is developing really well, not only underneath our solutions, but always also in terms of extensions to our business suite with regard to clean core and then obviously also for analytical scenarios.

[Christian Klein, CEO & Member of Executive Board at SAP]

So we are not running out of operational levers to further improve our cost ratios. And then on the Business Data Cloud, look at them. I mean, that can really differ a lot. I mean, the first really important lever for big deal sizes is does a customer have a BW system? These BW instances are very, very large, a lot of data and similar oftentimes to an ERP system.

[Christian Klein, CEO & Member of Executive Board at SAP]

Now if a customer is convinced not only to lift and shift those BW systems now to the cloud, but really what differentiates Business Data Cloud is the semantic layer. If they go that way, deal sizes can be pretty significant. But we also have other customers, like net new customers. We have customers who didn't use the BW. And they start rather smaller.

[Christian Klein, CEO & Member of Executive Board at SAP]

They start with our data warehouse. They're integrating it with our apps, with our business suite. They are trying out two or three data products on the semantical side. And then we go from there. And but in touch accounts, obviously, what is great that we are now can position ourselves in in the stack where we probably, without Business Data Cloud, would have never ever had a chance to land.

[Christian Klein, CEO & Member of Executive Board at SAP]

And then when you hopefully going to visit us at SAPPHIRE, you're going to see how we are now building a real marketplace around this data product. I mean, we are not only developing those semantics with our own workforce, we are inviting customers, partners to build those data products. And then we, of course, then can also then, of course, increase the footprint in already existing B2C customers over time with these kind of data products.

[Operator]

The next question is from the line of Jackson Ader with KeyBanc Capital Markets. Please go ahead.

[Jackson Ader, Managing Director at KeyBanc Capital Markets]

Great. Thank you. Thanks for taking our questions, guys. In the event that there would be some potential disruption from the macro environment in the pipeline conversion rates, do you guys think that it would be, maybe cloud migrations, or or would it be net new activity that would have maybe a bigger impact? I guess, ask a different way, is there any part of your pipeline that you feel is better insulated from a potential macro, disruption than another part of your of your pipeline?

[Jackson Ader, Managing Director at KeyBanc Capital Markets]

Thank you.

[Christian Klein, CEO & Member of Executive Board at SAP]

Yeah. I mean, as Dominik already shared, I mean, q one, you saw some factors in the cloud revenue, had a lot to do with, you know, the heavy boost in order entry we have seen in Q4 and the time it takes to provision. Now what Dominik also said is in Q2, you can assume already slight acceleration of cloud revenue given the strong Q4, which we had. On the CCB side, it's rather the other way around. I mean, obviously, this is now a large, large install base Q2.

[Christian Klein, CEO & Member of Executive Board at SAP]

It's also not volume wise our biggest quarter. And now for the rest of the year, when you look at the kind of uncertainty we see, obviously, still q two, partly Q3, will matter for our Q4 cloud revenue performance. Q4 itself will not have a big impact anymore on this year's guidance because the revenues will come the next year. So the good piece is when you read into this, I mean, there is not now a large swing on cloud revenue and total revenue. Still, obviously, we assume conversion rates like last year, like the last quarters.

[Christian Klein, CEO & Member of Executive Board at SAP]

And still, we are seeing this in also happening. Now with regard to is it a more net new or installed base? Look, I mean, when I mentioned some net new customers, I mean, VFS extremely successful. They have outgrown their current ERP by a lot. In order to now reach the next step, they have to have a suite which allows them to scale their business.

[Christian Klein, CEO & Member of Executive Board at SAP]

So in this case, customers will buy software. And also in the installed base, I mean, really depends where does the customer sit. If you are sitting on a very outdated ERP, I mean, the time and the value of moving now, I mean, is in my eyes so big that still the business cases should really actually make sense even if the macro now, you know, gets worse. Now, of course, how much does it get worse? I mean, are we are walking into a recession?

[Christian Klein, CEO & Member of Executive Board at SAP]

I mean, then we are talking about all kinds of scenarios, which will at some point of time impact every business in the world. But this is hard to predict what we said. And this is why given what we see right now, the pipeline, the relevance of our portfolio, we actually remain confident for the rest of the year.

[Operator]

The next question is from the line of Frederic Boulan with Bank of America. Please go ahead.

[Frederic Boulan, Head of European Software, Payments & IT Services research at Bank of America Merrill Lynch]

Hey, Christian and Dominique. Thanks for taking the question. If I can touch on EBIT and free cash flow, a very strong Q1. If you can discuss some of the moving parts into the rest of the year, any phasing to bear in mind. It's a strong improvement in cloud margin.

[Frederic Boulan, Head of European Software, Payments & IT Services research at Bank of America Merrill Lynch]

Any specific driver there in terms of mix or in in private cloud, in particular, improvement there? And maybe as it leads to free cash flow, you significantly accelerated the buyback in April. You've reached, you know, almost nine more than 90% of the of the 5,000,000,000 plan now. So what's next in terms of of, you know, potentially further expanding your your your program considering your your very healthy balance sheet? Thank you.

[Dominik Asam, CFO & Member of Executive Board at SAP]

Yeah. Maybe on the margin composition, it was quite broad. If you look at the expansion we have achieved, you mentioned the gross profit expansion, which was quite favorable, but also the selling expenses to sales ratio improved massively, the R and D ratio improved and even the G and A ratio, which is already quite low, and further improved because we could lever some new technology and really contain headcount growth. Now in terms of sorry, the second question was the okay, then when we went to the free cash flow. Well, on the free cash flow, yes, we also did very well.

[Dominik Asam, CFO & Member of Executive Board at SAP]

But again, I mean, I think we can all agree that it would not be important to touch the guidance upwards, so to speak, on any of these parameters given the uncertainty we currently see. Yes, we're going to complete our €5,000,000,000 share repurchase program, no doubt about that. And yes, we have to think post end of this year what we're going to do. You could also say maybe it's an opportunity when valuations come under pressure that we gobble up the one or the other asset, but then we have to see what sellers already adjust their price expectation to a reasonable level. If there is no M and A of any magnitude, then we still have some firepower to launch a new program.

[Dominik Asam, CFO & Member of Executive Board at SAP]

So we don't see that the cash generation capability of the company is fundamentally changing, and that makes us confident for further capital returns program absent any major M A moves.

[Operator]

The next question is from the line of Mark Moerdler with Bernstein Research. Please go ahead.

[Mark Moerdler, Managing Director, SVP and Senior Research Analyst at Sanford C. Bernstein Limited]

Thank you very much, and congratulations on the strong start to the year and the reiteration of the guidance. I'd like to look at the question of tariffs more generally, how you think about that impacting your business and more specifically, given the tariffs that are right now on hardware and servers and data center components, do you see that impacting your cloud gross margins? Is that something that you could pass along to the clients? Any color would be appreciated.

[Christian Klein, CEO & Member of Executive Board at SAP]

Yeah. Good question, Mike. I mean, the our strategy is mainly based on a four plus one strategy. So what do we have? We have four hyperscalers plus our own converged cloud.

[Christian Klein, CEO & Member of Executive Board at SAP]

And with these hyperscalers, I mean, you see the success we are having in the cloud. Obviously, we have closed multiyear contracts, which give us some price security. And obviously, that we are consuming really heavy volume, still also today, we feel we are really in a solid position when it comes to extending those contracts. And again, we are having four plus one. We also have our own converged cloud.

[Christian Klein, CEO & Member of Executive Board at SAP]

And actually, when we when we are looking at AI and the chips, I mean, what we're actually seeing is now, of course, before tariffs that the cost for the hardware became, of course, materially cheaper with many new open source modules, with the technology becoming more mature. I mean, that helped. And so that's why net net plus the TCO improvements, what I mentioned, I mean, our product owners are incentivized to further bring down the TCO. We have more ideas to come. So we, first of all, believe that, especially on the hardware side, I mean, are not purchasing hardware directly so much.

[Christian Klein, CEO & Member of Executive Board at SAP]

We are consuming it oftentimes via the hyperscalers there. We have some kind of price security. We have our own converged cloud, smaller from a volume perspective. And then last but not least, we are not planning now short term. I mean, obviously, everything to be seen under the different macro environment you know, that we have to increase now prices for our customers because of tariffs.

[Christian Klein, CEO & Member of Executive Board at SAP]

We we are not seeing this right now.

[Dominik Asam, CFO & Member of Executive Board at SAP]

And let's not forget that the supply chain for data center equipment is largely outside The US. I mean, the components are manufactured outside The US, the assembly of the semiconductors, the assembly of the PCBs. So but, of course, if that escalates, and basically, there's trade barriers globally more and more, but let's not catastrophize at this point in time, We would have a little bit of a small impact in US because we have also some equipment like smartphones and PCs for employees locally in US, which would need to be imported from that non US supply chain into US. But that is not a meaningful number that would kind of change our guidance. So for the time being, then we can cope with this.

[Operator]

The next question is from the line of Finn Merckt with Barclays. Please go ahead.

[Sven Merkt, Analyst at Barclays]

Great. Good evening. I have a follow-up question on your own infrastructure business. I know you have deemphasized this a few years ago, but given recent geopolitical events, have you received, increased client drift in your own infrastructure offering? And are there perhaps any considerations to revitalize this, somewhat or work with additional partners?

[Sven Merkt, Analyst at Barclays]

Thank you.

[Christian Klein, CEO & Member of Executive Board at SAP]

Yeah. Very good question. And look. I mean, now we have so far not seen existing SAP customers changing the infrastructure because of geopolitical tensions or tariffs. Of course, there are customers now reaching out in one or the other country and saying, hey, what would be the cost of moving to an SAP infrastructure?

[Christian Klein, CEO & Member of Executive Board at SAP]

Or if to any kind of sovereign cloud offerings what we have. And but again, we are not seeing right now that really customers are now taking action. And the outreaches we get are what are few, not many. Now on sovereign cloud building up world class data protection and data security offerings. Mean, you have seen in our Q1, we have signed a few deals, large deals in the public sector in Germany.

[Christian Klein, CEO & Member of Executive Board at SAP]

We have NS2 in The United States, a fully independent company of SAP and with a dedicated sovereign cloud offering, which we are heavily investing into for The United States. We have in Australia, Japan, etcetera. And so we are building up these capabilities. But you also have to always educate our customers on, especially in the public sector, what sovereignty really means. I mean, sovereignty can mean a lot.

[Christian Klein, CEO & Member of Executive Board at SAP]

You can have data, location sovereignty. You can have sovereignty when it comes who is touching the data. You can have sovereignty with regard to access of networks, to global networks. And so we are offering different levels. And so far, what we also have seen even in the public sector that it doesn't always need to have the highest degree of sovereignty.

[Christian Klein, CEO & Member of Executive Board at SAP]

And so that is also a very positive sign that we oftentimes can also use our own data centers or hyper scalar data centers to offer sovereign cloud capabilities.

[Operator]

The next question is from the line of Keith Bachman with BMO. Please go ahead.

[Keith Bachman, Senior Research Analyst at BMO Capital Markets]

Good evening, and thank you very much. I wanted to return to the business data cloud if I could. Is there a way if you think about a normalization of trends over the next three years of what an average, uplift on on a client relationship or payments would be? Is it 10%, twenty %, something higher? The second part of the question, is there a risk that the Business Data Cloud crowds out or replaces, other areas of spend that might be otherwise, dedicated to SAP, or is this, in your mind, purely an additive activity of creating this additional data lake to support the the broader ecosystem.

[Keith Bachman, Senior Research Analyst at BMO Capital Markets]

And the final part of the question is, is there anything you can speak to on the business data cloud associated with margins? Obviously, Databricks is the underlying engine to the data cloud. Is it therefore is this business really ramps? Is it dilutive to margins? And that's it for me.

[Keith Bachman, Senior Research Analyst at BMO Capital Markets]

And congratulations on what I suspect will be a very solid software report relative to a lot of other competing and and similar software companies over the next few weeks. Thank you.

[Christian Klein, CEO & Member of Executive Board at SAP]

Yeah. So Business Data Cloud. Let's start from the beginning. Will Business Data Cloud replace other assets in our portfolio? No.

[Christian Klein, CEO & Member of Executive Board at SAP]

We actually, in the last years already, removed in our legacy stacks and our acquired stacks a lot of the data warehouse capabilities with our data warehouse cloud offering. And so we are in the process of doing so. But there is now not a replacement happening of SAP software because of BDC. Now, obviously, what will happen in the BW space when customers are running these large systems, I mean, they are paying maintenance for that. So similar to the wise journey of the ERPs, I mean, it will a lot of will depend on how the how high the multiples are from on premise support to cloud revenue.

[Christian Klein, CEO & Member of Executive Board at SAP]

And there, we are pretty confident because we believe the value proposition is strong, and we can price this asset with a good margin. Now on the cost margin and the margin overall of BDC, I mean, obviously, it's fair to say that Databricks gets a fair share of these deals. Now that is an okay margin, but not a great margin. Now the margin of this offering will come via the data products. So what we are doing underneath the semantic layer is what we did with DataSphere.

[Christian Klein, CEO & Member of Executive Board at SAP]

That is okay. That is delivering value. But what we want to price with a premium is definitely then the semantics, the data products. And there we actually expect to have a very healthy margin of this offering in the years to come, obviously correlating with the value of what our customers get out of it. And then last but not least, on your question of BDC, what is the percentage uplift?

[Christian Klein, CEO & Member of Executive Board at SAP]

I mean, look, we are now just starting to deliver the data products. I mean, the technical integration is there. The integration with Datapricks is there. Now what we are now building are the data products. And you can look at our roadmap.

[Christian Klein, CEO & Member of Executive Board at SAP]

So definitely there will be an uplift. Is it now 10% to 20%? Look, I mean, it's hard, hard to say. I will definitely say there is absolutely uplift uplifting on the data products will become richer per se over the time, and then we will have more. So there is absolutely an uplift in upselling and cross selling.

[Christian Klein, CEO & Member of Executive Board at SAP]

Now will this be 10%? Will this be 20%? Really, really hard to say at the point right now. What we can definitely say, the pipeline is developing really well and the multiples look really healthy.

[Alexandra Steiger, Global Head of Investor Relations at SAP]

Great. Thank you, Christian. And this concludes our call for the day. Thank you for joining us.

[Operator]

Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.

Participants

Executives

• Alexandra Steiger, Global Head of Investor Relations
• Christian Klein, CEO & Member of Executive Board
• Dominik Asam, CFO & Member of Executive Board

Analysts

• Michael Briest, Stock Analyst at UBS Group
• Ben Castillo-Bernaus, Executive Director at BNP PARIBAS EXANE
• Toby Ogg, Research Analyst at JP Morgan
• Charles Brennan, SVP - Equity Research at Jefferies Financial Group
• Mohammed Moawalla, Analyst at Goldman Sachs
• Adam Wood, Managing Director - Equity Research at Morgan Stanley
• Jackson Ader, Managing Director at KeyBanc Capital Markets
• Frederic Boulan, Head of European Software, Payments & IT Services research at Bank of America Merrill Lynch
• Mark Moerdler, Managing Director, SVP and Senior Research Analyst at Sanford C. Bernstein Limited
• Sven Merkt, Analyst at Barclays
• Keith Bachman, Senior Research Analyst at BMO Capital Markets