The Headline Numbers

SAP published its second quarter and half year results on 23 July, together with the earnings call held that evening.

Total revenue came in at €9.88 billion, up 11% at constant currencies. Cloud revenue reached €6.28 billion, up 24% at constant currencies, and current cloud backlog, the best forward measure of contracted implementation work still to be delivered, hit €22.9 billion, up 26% at constant currencies and an acceleration on the first quarter. Non-IFRS operating profit rose 9% at constant currencies to €2.7 billion.

Set against that, SAP trimmed its full year non-IFRS operating profit outlook to a range of €11.8 to 12.2 billion, down from €11.9 to 12.3 billion previously. The reason is specific: the Dremio and Prior Labs acquisitions, both closed in July, are expected to cost the company just over €100 million in profit for the rest of the year, and management chose to absorb that cost rather than lift underlying guidance to cancel it out. Cloud revenue guidance for the full year stayed exactly where it was.

Cloud gross margin came in at 74.3% on an IFRS basis, down half a percentage point year on year, and 74.6% on a non-IFRS basis, down 0.7 points at constant currencies. SAP is growing fast and getting slightly less profitable per euro of cloud revenue delivered.

Diginomica summed it up as a good solid quarter with nothing to scare the horses, and SAP’s share price moved only modestly in the days around the announcement. This is a steady set of financial results.

What the Detail Tells the Services Market

The line items beneath the headline are where these financial results become useful for anyone earning a living around SAP delivery.

Cloud ERP Suite revenue, the figure most closely tied to RISE and GROW with SAP implementation work, grew 27% at constant currencies and now makes up 88% of total cloud revenue, a figure CFO Dominik Asam gave on the call and one that also checks out against the published table, since €5.525 billion of Cloud ERP Suite revenue divided by €6.281 billion of total cloud revenue lands right at 88%.

Services revenue, the line that captures SAP’s own consulting arm rather than partner delivery, fell 2% at constant currencies to just over €1 billion. SAP’s own explanation for the dip was that consultants are being moved off traditional implementation billing and onto building agents and driving AI adoption instead.

Total services headcount barely moved, sitting at 18,741 full-time employees at the end of the quarter against 18,732 a year before. Cloud backlog requiring delivery grew 26%. The people inside SAP whose job is delivery remained essentially the same. Somebody has to close that gap, and Christian Klein said on the call that indirect channel growth, meaning revenue coming through partners, again ran well ahead of direct channel cloud revenue.

The “Consulting AI Factory”, which Klein described as putting more than 3,000 SAP consultants to work driving AI adoption directly with over 2,000 customers, cuts two ways for the wider market. It previews the delivery model SAP wants the rest of the ecosystem to copy, and at the same time it competes directly for the AI adoption advisory work smaller and regional consultancies would otherwise be selling. A boutique firm whose pitch leans on AI readiness assessments or helping clients get started with Joule should expect SAP’s own people to be bidding against them on some of that work.

For consultancy owners thinking about acquiring or being bought, there is now some data to work from.

Aventis Advisors published a study of SAP partner acquisitions this month covering 369 deals between 2015 and 2025. The disclosed sample is small, 24 deals with a published revenue multiple and 13 with a published EBITDA multiple, and Aventis is upfront that the figures should only be read as directional.

With that caveat attached, the median deal closed at 1.1 times revenue and roughly 9 times EBITDA, with the top quarter of deals reaching 1.4 times revenue and the low teens on EBITDA. NTT DATA has been the busiest acquirer over that period, around 23 deals mostly through its NTT DATA Business Solutions arm, ahead of Deloitte at roughly 12 and Accenture at roughly 11, with private equity backed groups such as Valantic and Pearl Group forming a further active tier underneath them.

SAP’s own acquisitions this year, Reltio, Dremio and Prior Labs, all went toward data and AI infrastructure rather than consulting firms. That is not official SAP data but Solganick’s reading of the pattern, and the deal list backs it up: SAP is building the platform and leaving the delivery side of the market to consolidate on its own.

The Gap Between SAP’s Product Strategy and Customers

The Sapphire conference in May introduced the Autonomous Enterprise, the Business AI Platform and Joule Work, and Klein used the Q2 call to restate what SAP plans to do to meet that vision: close to 50 assistants by the end of Q3, more than 400 autonomous suite agents by year end, and three further ERP migration assistants with ten underlying agents due later this quarter. Those are SAP’s own targets, on a timetable SAP itself controls, and nobody outside the company has checked them against actual delivery yet.

The harder question is whether customers are ready to use any of it.

SAP announced in December 2025 that compatibility packs, which let on-premise customers keep certain old ECC functions running inside S/4HANA, would lose their usage rights at the end of May 2026, and that date has now passed. ECC mainstream maintenance ends on 31 December 2027, with extended maintenance available afterward at a typical premium of around 2 percentage points on the standard support fee through 2030 (though SAP negotiates the exact figure per customer rather than publishing one fixed rate), and a further extension for customers with very large ECC estates needing more time still.

Gartner’s count at the end of 2024 put 39% of the roughly 35,000 companies in SAP’s ECC installed base as having already migrated to S/4HANA, projecting 57% cumulative by the 2027 deadline and around a third of the base still on ECC in 2030. A large share of the customer base is still doing the groundwork that has to come before this year’s AI announcements become relevant to them.

Klein told analysts that customers signing RISE deals this quarter were blunt: with the current state of their data and the complexity built up over the years, AI was going nowhere, and landscape work and AI adoption have to happen together rather than one after the other.

One further qualifier should be accounted for in any plan built on this quarter’s numbers. SAP’s full year guidance assumes the conflict in the Middle East eases in the near term, names continued or worse conflict as a real risk to bookings, and gives that as the reason current cloud backlog guidance still reads as a slight slowdown into year end.

Where the Work Is

For consultants, the paying work between now and the 2027 deadline is still in migration delivery rather than agent building.

The scarce roles are S/4HANA program managers, solution architects, and senior functional people across FI/CO, SD, MM and EWM, along with data migration architects and BTP specialists who can substitute old customizations for clean core extensions.

AI skill matters most as an addition to that work. SAP’s own claim of up to 30% lower migration costs through its toolchain, and Dexco’s result of cutting 97% of legacy customizations while closing its books 75% faster, are the kind of figures clients will start asking delivery partners to match, but not yet. Pitching agent building on its own, ahead of a client’s migration, puts you ahead of what the market is ready to buy: better to build the AI skill now and hold it in reserve for when the migration work it depends on is actually done.

SAP flagged strong cloud performance this quarter across Brazil, France, Germany, Italy, India, South Korea and Spain, with Australia, Singapore and the US also strong.

Among consultancy owners, the question is less which skill to add next to their capabilities, and more which side of the valuation range you sit on. A firm with a growing S/4HANA and BTP practice, a good share of recurring application management revenue, and little exposure to old ECC break fix work is priced very differently from one without those features.

Aventis Advisors’ own reading is that the premium end of that range holds while the ECC backlog is still large and certified consultants are still hard to find, and narrows once most of the market has moved across. The choice has a shelf life either way, and building application management depth and BTP capability now pays off whichever path an owner eventually takes.

After 2027

SAP’s own guidance gives a fair sense of what follows once the deadline pressure lifts. The company expects total revenue growth to pick up again in 2027 and software support revenue to fall faster over the same stretch, both a direct result of the remaining ECC customers finally being pushed to move.

That points to a second round of work. Once systems land on S/4HANA, the job shifts from getting there to making the new setup worth what it cost, and Business Data Cloud, master data work, and agent driven process work are where SAP is putting its own weight.

Treating 2026 and 2027 as purely a migration sprint means reaching that second round later than firms who build the skill alongside the migration work.

A few dates are worth watching out for: the Business AI Platform going live and Joule Work rolling out through Q3, the assistant and agent counts SAP reports at Q3 results against its own targets, and whether current cloud backlog growth slows as guided or holds up against the Middle East risk SAP has already named. Each will tell you more about where this market is heading than anything said on stage at Sapphire.

IgniteSAP works with a number of SAP consultancies to fulfil ongoing capability requirements, building a talent pipeline to staff current and upcoming needs. If your practice is looking for that kind of strategic hiring support, contact us here