Centrica and Itron Deals Highlight SAP’s Utility Strategy as Cloud Revenue Surges 27% — But the Stock Remains in a 43% Tailspin

SAP secures Centrica as RISE with SAP customer, launches Locusview connector for smart grids, despite strong cloud growth and €21.9B backlog, shares remain in bear market.

SAP is deepening its footprint in the utilities sector with two distinct moves that underscore the growing complexity of digital transformation for energy and water companies. Yet the market’s response to these strategic wins has been muted at best, leaving the software giant’s shares trapped in a prolonged bear market even as its cloud engine fires on all cylinders.

British energy supplier Centrica has committed to migrating to RISE with SAP starting in July 2026, laying out a phased rollout that kicks off in the finance function. Over time, the so-called “SAP-first” strategy will be extended across the organisation, with the goal of lowering total cost of ownership, streamlining the system landscape, and building a clean data core. Centrica is collaborating with SAP, Microsoft, and external systems integrators on the programme, which aims to transform the traditional utility into a more agile, service-oriented business by 2030.

Artificial intelligence is a central pillar of the deal. Centrica plans to deploy Joule, SAP’s conversational AI assistant, to make interactions with SAP applications more dialogue-driven. The integration with Microsoft Copilot is already active, according to SAP. Notably, this is not a greenfield project: Centrica went live with SAP Business Data Cloud in February 2026, unifying SAP and non-SAP data to accelerate decision-making. RISE with SAP will build on that foundation and prepare the ground for future AI agent capabilities.

On a separate but complementary front, SAP on 27 May 2026 released the Locusview Connector from Itron, a tool that directly ties project management workflows for utilities into SAP S/4HANA. The integration targets the fragmented system landscapes that often hamper the multi-billion-euro rollouts of smart grids and infrastructure modernisation. By automating the reconciliation of construction, work order, and asset data between Locusview and SAP systems, the connector reduces manual intervention and boosts data consistency. Itron, which acquired Locusview in January 2026, is embedding the software into its utility IT portfolio. For SAP, the partnership reinforces its industry-specific cloud offering at a time when utilities are among the most capital-intensive ERP customers.

The financial performance behind these initiatives remains robust. At the end of March 2026, SAP’s cloud backlog stood at €21.9 billion, up 25% at constant currencies. First-quarter cloud revenue rose 27% on a currency-adjusted basis, cloud ERP suite revenue climbed 30%, total revenue increased 12%, and non-IFRS operating profit advanced 24%. Management reaffirmed its full-year guidance: cloud revenue between €25.8 billion and €26.2 billion, and non-IFRS operating profit in a range of €11.9 billion to €12.3 billion. Analysts currently pencil in earnings per share of €7.28 for 2026.

None of that has lifted the stock out of its deep rut. On Thursday, SAP shares changed hands at €151.36, barely a percent higher on the day. Year-to-date, the equity has lost 25% of its value, and over the past twelve months the decline exceeds 42%. The 52-week high of €271.60 sits 44% above the current price. After hitting a low of €137.62 in mid-May, the shares have recovered somewhat — the relative strength index now stands at 82, signalling short-term overbought conditions.

The disconnect between operational momentum and market sentiment is stark. Utility-specific wins like the Centrica migration and the Itron connector demonstrate SAP’s ability to lock in long-term cloud contracts, but investors appear to be waiting for concrete proof that booming cloud revenues will translate into sustained margin expansion. The next quarterly report, due in July, will offer an early test of whether that equation is beginning to shift.