A：Customers are facing geopolitical uncertainty, macroeconomic volatility, and are looking to leverage AI to make their companies more resilient and productive.

A：The core message is that customers can gain real value from AI by reimagining how AI changes existing business models and mission-critical business processes, and by boosting process automation and efficiency through AI agents embedded in business processes.

A：The momentum of SAP Business AI is reflected in Q4 numbers with more than two-thirds of Q4 cloud order entries including business AI, an increase of over 20 percentage points compared to Q3, and the addition of 90% of the 50 largest deals in Q4 including AI or SAP Business Data Cloud.

A：SAP's Q4 bookings grew to a total cloud backlog of €77 billion, up 30%, ahead of expectations. This growth is attributed to strong customer retention, low churn, and stable discount rates.

A：The deviation from the forecast was due to a higher share of large deals that are back-end loaded and government deals that included a termination for convenience. Consequently, there's a one percentage point difference, leading to a slight shift of cloud revenue from 2026 to 2027 and beyond.

A：Notable wins include partnerships with Adidas, L'oreal, H&M, KPMG, and a large German retailer, among others, for business AI. New concepts include projects with Teg, Mahindra, and Sun Chemical in healthcare.

A：Highlights of SAP's progress in 2025 include the full swing of cloud transformation with 40% of the support revenue base migrating to cloud ERP using S/4HANA and growth with SAP offerings. A partner-first approach was established for the midmarket, and the focus on public cloud drove order entry growth more than five times faster than private cloud.

A：SAP's growth ambition for 2026 and beyond is to further expand market share, grow cloud revenue, and accelerate total revenue growth through 2027, driven by a significant amount of future cloud revenue in the backlog, converting the installed base to the cloud, and increasing the size of the cloud footprint for existing customers.

A：SAP is expanding its business in the public cloud with a focus on the midmarket and is winning new customers through its partner-first strategy and the significant expansion of its reseller ecosystem, resulting in the channel growing more than 1.5 times faster than direct business.

A：Business AI and Business Data Cloud are crucial for future growth because they provide customers with the necessary modules, business data, and context to build high-value AI use cases and derive business value, reinventing user experience, and redefine the future of work.

A：The company differentiates its services by combining deep industry and business process knowledge with the power of AI to create high-value, industry-specific applications. They are reimagining strategic industry capabilities with AI and are already redefining parts of industry value chains in sectors such as healthcare, manufacturing, retail, and more.

A：Customers are expected to spend significantly more on ERP migration compared to their ERP software, but with SAP's integrated AI power migration tool chain, the cost is reduced, the process is expedited, and customers can realize faster value from their transformation.

A：AI is being used across all functions of SAP to unlock significant long-term operating profit potential. It is helping in identifying opportunities, planning and transforming the workforce, and reskilling the workforce, thus contributing to a projected cost efficiency gain of around €2 billion by the end of 2028.

A：SAP's goal is to achieve cost efficiencies of around €2 billion by the end of 2028 through the internal usage of AI, which would translate into efficiency gains of 15% to 20% of the addressable cost. This would also allow reinvestment into the AI roadmap.

A：Key financial highlights for SAP in 2025 include a current cloud backlog of €21 billion, up 25%, and a total cloud backlog growth of 30% to €77 billion. Cloud revenue grew 26%, primarily driven by the cloud ERP suite, while software license revenue decreased by 27%. Total revenue approached €37 billion, up 11%, and non-IFRS cloud gross margin expanded by 1.6 percentage points to 75%, driving cloud gross profit up by 29%.

A：In the full year 2025, regions like Brazil, France, Germany, India, Italy, South Korea, Spain, China, Japan, Saudi Arabia, the United Kingdom, and the USA had outstanding performances in cloud revenue.

A：According to SAP's outlook for 2026, the growth pattern for Cloud and Total Revenue is expected to moderate slightly, with deceleration less than what was seen in 2025. The operating profit outlook reflects sustained operating discipline, with an expense to revenue growth ratio towards the lower end of the long-term operating leverage objective. Additionally, it is anticipated that 2026 will generate a record free cash flow of approximately €10 billion.

A：The company's revenue fell short of the 26% target due to changes in the deal mix, with larger deals being closed that required more time to figure out how to run business processes in the cloud. Additionally, the company performed better in the public sector, which included some deals with termination for convenience by law not included in the CCP. Also, slippages were observed in some larger deals, although sales execution was considered good.

A：The company is considering the impact of sovereignty concerns and geopolitical tensions, which have led to longer negotiation cycles. The company is expecting a better pipeline cover in 2026 compared to 2025, and with an 90% of deals including AI, the company anticipates a positive trend in the coming year.

A：For 2026, the company does not expect a marginal or four percentage point decline in revenue like in 2025. Instead, there is a strong pipeline at the beginning of the year and an even better trend, with an increased focus on AI. The company is seeing more deals incorporating AI as a close driver, which is expected to contribute positively to revenue growth.

A：The company is investing in AI to transform its business operations and R&D. By scaling its business with AI, the company aims to achieve the 2 billion savings target over the next couple of years without the need for additional restructuring programs. The company is focusing on implementing AI use cases and is heavily investing in AI development. AI is expected to transform the role of software developers within the company, with automation of code generation and the need for data scientists and AI developers to build intelligent modules. The company is confident that its internal transformation will not require additional restructuring land and will be achieved through scaling business operations with AI.

A：The transcript does not provide a specific percentage of existing cloud customers using the company's AI offering. However, it does indicate that a substantial number of bookings, at 90%, include AI. While revenue uplift ranges are not provided, the focus is on the increasing number of customers using the company's AI offering as part of their transition to a data-centric economy.

A：The company's stance is that some customers are starting to use different tools to respond to needs previously addressed by the company's core products. However, the company is responding to these risks by continuing to enhance its AI offerings and their integration with its core products, emphasizing the relevance and capabilities of its own models over commoditized ones.

A：Approximately 60% of customers are using the AI actively, and 20% are on their way to using it.

A：An AI-driven LLD helped a German customer build a cash flow agent by understanding emails and support tickets, but required additional business data to be effective. Together with the AI foundation and knowledge graph, over 200 predictive modules were created.

A：H&M built a prototype for personalized shopping experiences in commerce using a LMS combined with the company's AI foundation to understand past consumer purchases and webpage clicks.

A：The company is reimagining the industry capability with AI to make it more efficient in terms of returns claims management.

A：The company is winning deals due to AI, not losing them. AI is being leveraged to increase the win rate in Q4.

A：The company delivered 27% constant currency growth for SaaS and PaaS in Q4, translating to over 30% in comparable US dollar numbers.

A：The company is confident in the revenue forecast for the coming year, with a guide for cloud revenues and a high level of accuracy in forecasts due to the high share of recurring, more predictable revenues.

A：Large deal phasing will impact cloud revenue growth, but the exact impact is not detailed in the transcript.

A：The transactional dilutive effect is expected to be smaller in the coming year, having been diluted to less than a percentage point from close to 1.5 percentage points last year.

A：The total cloud backlog is growing significantly, with much larger numbers in absolute terms compared to before.

A：The company started with smaller customers, midsize customers, and has seen mega deals contributing to their growth. The focus has been on converting these to the cloud.

A：The TCV is stable and has not increased with longer contract duration. Instead, it has increased by putting real business on top and this, combined with lower churn as the company closes more and more healthy business, is considered a positive sign for cloud revenue development.

A：The company won over 3000 net new customers, which is a positive sign for future growth as these are mid-size customers expected to grow over time.

A：The core sale of the business suite is going well and the company is adding a lot of new logos to SAP, despite the share of mid-size SME business becoming smaller due to some larger transactions.

A：A significant shift occurred where a lot of the revenue from larger deals moved out from the first 12 months to year 2, 3, and 4. This represents the highest impact seen compared to October on Software Cloud.

A：Negotiations on sovereign deals are taking longer due to discussions around potential sanctions, export controls, and redefined AI data protection regulations. These are influenced by global events and are not a reflection of a demand issue.

A：SAP ensures compliance by investing over 1 billion in localization and regulations, running the business in over 120 countries, and being able to provide solutions that adhere to all regulations. This is viewed as a competitive advantage.

A：The improved free cash flow outlook, ahead of expectations, is due to operational improvements and a higher stock-based compensation expense. The effective tax rate on operating profit and the addition of about a billion to the cash conversion are factors contributing to the positive outlook.