A：AI is positioned as the key enabler of SAP's solutions, and it is being infused into the integrated business suite. SAP's strategy involves not only developing AI agents but also orchestrating them across the company's value chain to automate and infuse intelligence into end-to-end business processes. The company is releasing AI systems tailored to specific business functions and is also seeing increased adoption and frequency of use of SAP Business AI by end-users.

A：The highlights of SAP's Q3 2025 financial results include consistent growth in cloud revenue at more than 25% for 5 consecutive quarters, a solid cloud cost margin of about 75%, total revenue growth of 11%, a 27% increase in cloud backlog, and an excellent bottom line performance with free cash flow increasing by 5% and a higher over-weight profit.

A：Customer stories from Q3 2025 include global companies like Alphabet, Lufthansa, and Magnum Ice Cream adopting SAP Business Data Cloud and Business AI, and expanding their SAP footprint with additional business suite solutions. Other companies such as Checkwall and Takeda have also signed up for Business Data Cloud. These stories demonstrate the effectiveness of SAP's strategy and the potential benefits customers can achieve by adopting its AI-infused integrated business suite.

A：SAP's integrated business suite and AI strategy is differentiated from competitors by focusing on end-to-end value chain transformation and the automation and infusion of intelligence across business processes. SAP emphasizes the combination of AI with business processes and contextual data to create high-value AI use cases. The company's strategy includes developing AI systems and orchestrating AI agents to support specific business owners and functions, something that SAP claims only they can do effectively.

A：SAP's approach to the US public sector market is to provide cloud solutions alongside strong cloud infrastructure partners. This strategy has led to winning a major framework contract with the US government, and the company has already received first orders under this framework. An example of a recent win is the United States Army contract, which enables the migration from on-premise systems to the cloud.

A：The guiding principle behind Sap's adoption of AI is the belief that simplification and internal AI adoption will enable their headcount to grow significantly below revenue.

A：AI has contributed to Sap's resilience across regions and industries and is expected to accelerate double-digit total revenue growth through 2027.

A：In Q3, Sap had strong execution on current cloud backlog and cloud revenue, resulting in a healthy growth in operating profit. The Cloud ERP suite delivered its 15th consecutive quarter with growth exceeding 30%, validating the strength of their strategy.

A：Cloud backlog exceeded €18.8 billion, up 27%, and Cloud revenue also increased 27% driven by the strong performance of the Cloud ERP suite, which grew 31% in Q3.

A：The non-IFRS cloud gross margin for the quarter expanded by 1.1 percentage points to 75.1%, driving cloud gross profit up by 28%.

A：Both IFRS and non-IFRS operating profit growth were negatively impacted by approximately €100 million due to a change in case law affecting SAP's other tax litigation provisions and more than €100 million related to workforce transformation.

A：The basic IFRS earnings per share increased to €1.72 and the non-IFRS earnings per share increased to €1.59.

A：Sap now expects to reach the range of its cloud revenue outlook for fiscal year 2025 towards its lower end due to late bookings in the first half of the year. Despite this, they expect to lend towards the upper end of their operating profit outlook range and forecast free cash flow to exceed the previous target of €8 billion.

A：Q4 is crucial for cloud revenue guidance as it is considered a very important quarter for delivering a good performance and picking up the stalled pipeline from the first half of the year.

A：SAP announced details around an ERP transition option allowing customers to move to S/4 in the cloud, with pricing increases for those who don't sign by the year-end. This is expected to help move customers to the cloud and secure their systems with added support and security measures.

A：The transition option is expected to help with the uptake of cloud services and is anticipated to contribute positively to the pipeline, with the potential to sign first deals in Q4 if all goes well.

A：The focus on the value equation and software/cloud is due to SAP's strategy of emphasizing the business value provided by its solutions over infrastructure, although it remains competitive in the software as a cloud space.

A：AI benefits customers by enabling targeted marketing campaigns and a better understanding of consumer trends. It impacts deal closure by providing a compelling business reason, reducing slippage risk, and being a key reason for many Q4 deals.

A：The new approach with AI and analytics is focused on delivering high value through AI use cases that involve processing data without moving it, ensuring data quality and business context. This will enhance economics by combining with SAP's core strengths in predictive analytics and AI agents, and through partnerships with Google and Databricks. This approach leverages data processing within SAP applications without needing to transfer data, thus maintaining control over data quality and business context.

A：Confidence in revenue acceleration next year is strong, despite a potentially higher CCB growth rate needed to achieve the guidance. This confidence stems from a solid pipeline in Q4 and the closing of previously stalled deals, which together with strong recurring revenue shares, are expected to deliver the anticipated revenue acceleration for the coming year.

A：The projected difference between cloud revenues and the growth exiting 25 should be not more than a percentage point. The main reason for the lower transactional business is the overwhelming reason being lower travel activity for Concur on bookings, which is related to government shutdowns and lower travel activity.

A：The change in free cash flow guidance for the year was influenced by the phasing of tax cash out, which was higher in the first half (H1) and Q3 but will be even higher in Q4. There is always cautious consumption of transformation credits which can create some cash headwinds. The variability is also due to the receipts and payments of certain activities at the end of the quarter.

A：The competitive landscape with Oracle does not present an incremental risk, according to the speaker. There is a focus on scaling the infrastructure and training LLDs, but customers are positive about the value provided by the speaker's company for end-users in areas such as supply chain, HR, and finance. The company can offer highly competitive global offerings without the need to build data centers everywhere, as their strategy is open and works well. The company's goal with large language modules is to use them rather than train them.

A：Price discipline has a positive impact on the linearity of bookings throughout the quarter. It ensures that the end of the quarter does not lead to a rush to close deals, which could result in lower-quality deals. Price discipline helps in maintaining good business cases and strategic deals, which also helps in protecting prices. This strategy of right mix of volume and pricing is crucial for the sales team to meet their quota without sacrificing deal quality.

A：The acceleration in support revenue decline is an indication that customers are going live with the cloud, which is considered very healthy. This trend is attributed to the adoption of customers in the cloud as part of their digital transformation journey.

A：Within the R&D department, there is a shift away from traditional coding features and functions towards AI developers and data scientists building predictive modules. This shift is expected to continue, and is already contributing to better deal predictability and improved product development.

A：When assessing the range of potential outcomes for the fourth quarter in terms of Cloud Customer Production (CCP), net bookings and churn are the key factors to consider. The ability to close deals by the end of the quarter with a certain deployment time significantly influences the CCP. Specific individual quarters should not be read into too much, but trends and overall performance provide a bandwidth for how numbers should gravitate.

A：The projected pipeline completion is estimated to be around 25%, which the company considers a reasonable scenario. However, the sentiment in some industries has changed, leading to a more optimistic outlook for Q4 bookings. If Q4 were to disappoint, it would likely be because the actual numbers are below 25%. The current pipeline is viewed as better than what was experienced in Q3, and there is a belief that the momentum will continue into the fourth quarter.

A：The AI offering is playing a crucial role in accelerating deals and influencing customer discussions by helping customers not only with cloud migration but also with cost optimization and new business model monetization. AI use cases are emerging in process automation, cost management, and intelligent quoting, which are contributing to more dynamic and transformational deals.