SAP's Data-Lakehouse Bet Complicates the Math Even as Cloud Momentum Builds

SAP lowers 2026 operating profit forecast by €100M after Dremio, Prior Labs deals, while cloud backlog climbs 27% to €22.9B.

The software giant's acquisition spree is delivering the technological firepower its AI strategy demands, but the bill for that ambition has just landed on the income statement. SAP trimmed its 2026 operating profit guidance on the back of two completed takeovers, a move that sits awkwardly alongside a share price still nursing the effects of a recent analyst downgrade.

The company closed its purchase of Dremio, an open data-lakehouse specialist, on July 6, followed on July 17 by Prior Labs, a builder of tabular foundation models. Both are designed to feed SAP's Joule assistant with the data infrastructure it needs to function across enterprise environments. The price of that integration: a projected dilution of more than €100 million, which prompted SAP on July 23 to shave its non-IFRS operating profit forecast for 2026 to €11.8–12.2 billion from €11.9–12.3 billion, at constant currencies. The 13–17% growth target remains intact.

None of this has slowed the underlying business. Second-quarter current cloud backlog climbed 27% to €22.9 billion (26% currency-adjusted), cloud revenue rose 22%, and the cloud ERP suite segment expanded 25%. Management now guides for full-year cloud revenue of €25.8–26.2 billion, representing 23–25% growth over last year's €21.02 billion. A global transformation deal with NTT DATA, confirmed August 19, sees the IT services firm adopt SAP SuccessFactors and the Business Data Cloud with Joule across its HR operations — early evidence that the newly acquired data capabilities are already migrating into customer deployments.

The strategic push comes with a regulatory tailwind. In early July, SAP welcomed the conclusion of a European Commission review into its maintenance and support policies for on-premise software, removing a lingering compliance question. The company also filed a shelf registration with US regulators for 5 million ordinary shares — roughly $1.04 billion — tied to its employee equity compensation program, a mechanism that expands placement flexibility without obligating an immediate issuance.

On the capital returns front, SAP repurchased approximately 2.9 million shares in the first week of August at an average price of €169.72, bringing the 2026 cumulative buyback to around 5 million shares. An insider added 1,700 shares in mid-August at €179.15 apiece, while BlackRock nudged its voting rights stake to 6.75% at the start of the month.

The market's reaction to the guidance adjustment has been muted. The stock closed Friday at €190.86, up 1.0% on the day and 20% over 30 days, though it remains down 8.9% year-to-date and sits 21% below its 52-week high of €242.00. On Monday, shares traded at €189.34, a 0.8% dip. That relative calm extends to the UBS downgrade delivered over the weekend, which flagged slower-than-expected delivery of new AI agents as a monetization risk — a concern the company's new industry-AI portfolio, built around embedded forward-deployed teams and value-based pricing rather than traditional licenses, is meant to address.

Operationally, SAP shipped 33 security patches in August, including five critical HotNews notes and nine high-priority advisories, addressing 14 vulnerabilities alongside Onapsis Research Labs. The energy sector newsletter for August also went out, flagging the SAP Connect Day, the Energy and Utilities Innovation Awards, and Business AI updates, while the registration window for the Foundational Success Plan closes today.

The picture is one of a company investing heavily in the data layer its AI ambitions require, absorbing the short-term margin hit, and betting that the cloud backlog — up 27% and compounding — will more than compensate by the time the dilution fully flows through the P&L.