SAP's Q3: Reading Between The Lines

Europe's most prominent software company, SAP SE, just published Q3 FY25 earnings results, showing a continuation of cloud growth with some deceleration due to tariffs and related uncertainty.

The company updated its outlook for cloud revenue in 2025 towards +26%. Based on the latest earnings call, the adjustment of the cloud revenue outlook toward the lower end of its range, which implies a slight deceleration, is attributed to delayed bookings from the first half of the year.

In the previous earnings call (July 2025), the company explicitly cited uncertainty related to tariffs and trade policy as a reason for the delayed decisions. Back then, management stated they were seeing "extended approval workflows" among "manufacturers affected by tariffs". Now they are saying that the delays were caused by "elongated sales cycles" and "extended approval workflows" , particularly in the U.S. public sector and industrial manufacturing sectors. Although management noted a strong Q4 pipeline and a recovery in some of these stalled areas , the revenue lost from the delays earlier in the year was difficult to fully recapture within the 2025 fiscal year.