SAP stock surged over 8%—its biggest one-day jump in five years—after the German software giant exceeded first-quarter profit expectations and reaffirmed its cloud revenue outlook for 2025.

The strong Q1 performance was fueled by cost discipline and booming demand for SAP’s AI-driven cloud solutions. Adjusted operating profit hit €2.5 billion ($2.86 billion), beating analyst estimates of €2.22 billion. Free cash flow, cloud backlog, and operational earnings all exceeded market expectations.

Despite concerns over U.S. trade tariffs, SAP maintained its full-year cloud revenue guidance of €21.6–21.9 billion. CFO Dominik Asam credited the earnings beat to strict cost controls, with up to 10,000 jobs under review as part of SAP’s AI-era restructuring strategy.

CEO Christian Klein noted that customer investment appetite remains steady, but warned of broader uncertainty tied to evolving U.S. trade policy, especially as Trump temporarily suspends tariffs for the next 90 days.

Analysts hailed the results as evidence of SAP’s resilience and strong positioning in the enterprise software and cloud services market.