SAP trimmed its full-year outlook for key cloud sales due to lower-than-anticipated transactional revenues in the second quarter.
“We’ve seen fewer public sector customers in Q2, also due to the geopolitical situation, but demand remains strong for [the second half],” chief executive Christian Klein said in a press call.
The company reported second-quarter revenue growth of five percent, in line with market expectations.
Cloud revenue was 3.3 billion euros ($5.4 billion) in the second quarter, falling short of a median estimate of 3.4 billion euros in a company-provided consensus, while total revenue came in at 7.55 billion euros versus a median forecast of 7.6 billion euros.
“We see significant opportunities ahead, in particular through the transformative power of AI,” Klein added in a statement.
SAP expects generative AI to fundamentally change its business and has pledged to invest more than US$1 billion ($1.48 billion) in AI-powered technology startups via its enterprise capital firm Sapphire Ventures.
For the full year, it lowered its cloud revenue outlook to 14.0 billion-14.2 billion euros from 14.0 billion-14.4 billion euros, and slightly lifted its forecast for its non-IFRS operating profit to 8.65 billion-8.95 billion euros from 8.6 billion-8.9 billion.