SAP Trims Operating Profit Outlook as Dremio and Prior Labs Deals Weigh on Margins
Published on 09/21/2026 at 11:11 | Editorial boerse-global.de
SAP has nudged its full-year profitability target lower to absorb the cost of two summer acquisitions, even as its cloud order book continues to swell at a double-digit clip. The Walldorf-based software group now expects non-IFRS operating profit of EUR 11.8 billion to EUR 12.2 billion for fiscal 2026, down from a previous range of EUR 11.9 billion to EUR 12.3 billion. Management pinned the roughly EUR 100 million-plus dilution on the integration of Dremio and Prior Labs, both of which closed in quick succession earlier this summer.
The stock changed hands at EUR 185.64 on the day of the guidance news, a gain of 1.4%. That advance follows a softer session last Friday, when the shares finished at EUR 183.00, down 1.9% on the day and 13% since the start of the year. Even with the recent bounce, the equity sits well below its 52-week high of EUR 242.00 — a gap of some 23%.
A data-platform land grab
The two deals that prompted the guidance tweak are central to SAP's effort to bolt structured-data and AI capabilities onto its core. Dremio, an open data-lakehouse platform, was acquired at the start of July, while Prior Labs — a specialist in tabular foundation models — was folded in shortly after and will operate as a standalone unit. SAP has pledged more than EUR 1 billion over four years to grow Prior Labs into a leading frontier-AI research lab for structured enterprise data.
Those moves extend a buying spree that also included Reltio, a data-management specialist, whose takeover was completed back in May. Taken together, the acquisitions carry near-term charges, but they are designed to deepen the technological foundation of a business model that is being rebuilt around recurring subscriptions rather than traditional software licenses.
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Cloud backlog offers ballast
Underpinning the transformation is a cloud segment that keeps delivering. In the second quarter, the current cloud backlog climbed 27% to EUR 22.9 billion, with the figure up 26% at constant currencies. Cloud revenue itself rose 22% over the same stretch, and the Cloud ERP Suite booked 25% top-line growth. Across the entire portfolio, revenue advanced 11% at constant currencies.
For the full year 2026, SAP is targeting cloud revenue of EUR 25.8 billion to EUR 26.2 billion at constant currencies, compared with EUR 21.02 billion in fiscal 2025. The shift toward recurring subscriptions locks enterprise customers into the group's ecosystem for the long haul, though it demands heavy upfront spending on data centers, software architecture and sales infrastructure. That pushes the investment case toward a single question: how efficiently can SAP convert new client projects into high-margin cash flows?
Regulatory relief and boardroom continuity
Two regulatory clouds lifted during the summer. The European Commission closed its review of SAP's maintenance and support policies for on-premise solutions, accepting binding commitments on support services for classic ERP software at the start of July. Days later, Germany's Bundeskartellamt ended its preliminary probe without opening an abuse proceeding.
On the governance front, the supervisory board has locked in stability at the top. Finance chief Dominik Asam has extended his mandate through 2028, keeping the leadership team anchored as the integration and cloud-migration work moves ahead. Insiders, for their part, bought stock in August at prices below EUR 180.
October print in focus
Attention now turns to the next scheduled update. SAP is due to report third-quarter results after the US market close on 21 October. Investors will be watching whether margin headwinds are easing and whether the full-year cloud target band remains within reach, while also gauging how quickly the new data platforms start feeding value into the sales pipeline.
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