SAP Stock Plummets Following Cloud Backlog Disappointment
Shares of German software company SAP experienced a significant decline on Thursday, falling as much as 11%, triggered by weaker-than-anticipated growth in its cloud contract backlog for the fourth quarter. This marks the largest single-day drop for the company as october 2020, when a similar earnings disappointment led to a 22% stock decrease.As of late Thursday trading, shares were down 9.7% and poised to close at their lowest level as mid-2024.
The company’s current cloud backlog increased by 16% in the fourth quarter, reaching 21.1 billion euros (approximately $25.3 billion).However, this growth rate fell short of analyst expectations, with UBS reporting a projected growth of 26%.
SAP attributed the shortfall to factors including large-scale transformational deals with extended revenue timelines and legally mandated termination clauses, which collectively reduced cloud backlog growth by approximately 1 percentage point.
Despite the disappointing figures, SAP CEO Christian Klein expressed confidence that the current cloud backlog provides a “strong foundation” for accelerating revenue growth through 2027.Though, the company anticipates a “slight deceleration” in cloud backlog growth during 2026.