SAP Misses Q3 Revenue Estimates as Cloud Growth Slows, Shares Drop

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German enterprise software giant SAP reported third-quarter revenue slightly below analyst expectations, sending its U.S.-listed shares down 3% in after-hours trading. The company posted revenue of €9.08 billion ($10.59 billion), a 7% year-on-year increase but short of the €9.17 billion forecast by analysts, according to LSEG IBES data.

SAP’s cloud business, a key growth driver, rose 22% — its slowest pace since late 2023. CFO Dominik Asam said the company “maintained forward momentum despite an uncertain macroeconomic backdrop.” SAP has been shifting from traditional software licenses to a subscription-based cloud model, seeking more stable long-term revenue streams.

Non-IFRS operating profit grew 14% to €2.57 billion, slightly above estimates, while free cash flow increased 5% to €1.27 billion. Looking ahead, SAP expects 2025 cloud revenue to reach the lower end of its forecast range (€21.6–21.9 billion), but operating profit is anticipated at the upper end (€10.3–10.6 billion). Free cash flow guidance was raised slightly to between €8 billion and €8.2 billion.

Apple Faces EU Antitrust Complaint Over App Store and iOS Restrictions

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Apple is facing a new antitrust complaint in the European Union, filed jointly by civil rights organizations Article 19 and Germany’s Society for Civil Rights. The complaint, submitted to the European Commission, accuses Apple of breaching the Digital Markets Act (DMA) through restrictive App Store terms and device policies that limit interoperability and competition.

The complaint argues that Apple’s conditions for developers — including a €1 million stand-by letter of credit (SBLC) — create barriers for small and medium-sized enterprises seeking to distribute or install third-party apps on iOS and iPadOS. The groups claim such practices violate the DMA’s goal of ensuring fair access and consumer choice in digital markets.

Apple rejected the allegations, stating that its rules protect users and developers by maintaining high security and quality standards. The company said it had proposed changes to its credit requirements, but that the European Commission asked it not to proceed.

The European Commission confirmed it is reviewing the complaint as part of its ongoing supervision of “gatekeeper” companies under the DMA. The law allows regulators to impose fines of up to 10% of a company’s global annual revenue for noncompliance — a significant threat for Apple, which was fined €500 million earlier this year for other App Store violations.

IBM’s Cloud Growth Slows Despite Strong AI Mainframe Demand and Solid Q3 Results

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IBM reported third-quarter revenue and profit that beat market expectations, but investor optimism dimmed as growth in its key cloud software division slowed. The company’s shares fell 5% in after-hours trading, despite strong results driven by soaring demand for its new AI-powered mainframe systems.

Revenue in the hybrid cloud unit, which includes Red Hat, rose 14% compared to 16% in the previous quarter — a slowdown that raised investor concern about IBM’s ability to fully capitalize on the global cloud boom. Total quarterly revenue reached $16.33 billion, surpassing analyst estimates of $16.09 billion, according to LSEG data.

CEO Arvind Krishna said IBM expects Red Hat’s growth to return to mid-teen levels by 2026. Analysts noted that the deceleration in software sales may disappoint investors, given the segment’s high margins. However, IBM’s infrastructure division, housing its mainframe business, was a standout performer with revenue up 17% to $3.56 billion.

The new mainframe, optimized for AI workloads, is being widely adopted in the financial sector due to its data security and encryption strengths. IBM’s total AI-related business has grown to $9.5 billion, up $2 billion from the previous quarter. The company raised its full-year outlook, now expecting revenue growth above 5% at constant currency.