Investors punished SAP after the software giant reported quarterly sales figures below analyst expectations.

The vendor saw its stock dip from €259.45 ($304.43) to €246.20 after its latest earnings report revealed its software license revenue had decreased by 15%, while its services revenue was also down by 5%.

SAP’s cloud and software revenue did jump by 11% to $9.4 billion, but that was below analyst expectations.

SAP CFO Dominik Asam told investors the company “remain[s] cautiously optimistic, keeping a close eye on geopolitical developments and public sector trends.”

It wasn’t all doom and gloom at SAP, with the firm reporting “very strong” pipeline for the second half of the year, with its cloud backlog growing by 22% in the second quarter.

Cloud revenue for the same period also jumped by 24%, alongside revenue for the firm’s cloud ERP (enterprise resource planning) suite, which saw a 30% jump.

The negative investor reaction came as SAP failed to update its outlook for 2025, with total cloud revenues expected to be around $25.4 billion to $26.9 billion at constant currencies.

The software vendor also remained unchanged in its view that its anticipated cloud backlog growth will slightly decelerate this year, but remain strong.

“We achieved a very good Q2, with accelerating total revenue growth, strong profitability and free cash flow,” Askam told investors. “Our performance was supported by continued customer demand and disciplined cost control.”

SAP's earnings report followed news that the software services giant plans to cut more jobs as it looks to double down on AI.

The vendor had announced plans to cut some 10,000 jobs, with CEO Christian Klein telling dpa-AFX: "In a given year, one or sometimes even 2% of jobs could be eliminated. However, SAP will continue to grow overall in terms of employees, just less rapidly than revenue, because we are also creating new jobs in growth areas."