Investing.com-- German software giant SAP SE (ETR: SAPG ) (NYSE: SAP) on Tuesday raised its fiscal 2025 outlook, forecasting a significant increase in operating profit on accelerating cloud revenue growth and its strengthened position in business AI and data capabilities.

The company expects fiscal 2025 non-IFRS operating profit to reach €10.3–10.6 billion (($10.75- 11.06 billion), a jump of 26–30% at constant currencies from 2024.

The company expects cloud revenue to grow by 26–28% to €21.6–21.9 billion in 2025, supported by robust customer demand for its flagship Cloud ERP Suite and the RISE with SAP offering, which helps clients transition to cloud-based enterprise solutions.

“Looking ahead, our strong position in data and Business AI gives us additional confidence that we will accelerate revenue growth through 2027. ,” said CEO Christian Klein.

SAP also announced its fiscal 2024 performance. Non-IFRS operating profit for 2024 was up 25% to €8.15 billion, reflecting strong profitability despite restructuring costs tied to SAP’s transformation program.

Cloud revenue for the year rose 25% to €17.1 billion. Total (EPA: TTEF ) revenue grew 10% year-over-year to €34.2 billion, driven by a 33% surge in Cloud ERP Suite revenue.

For the fourth quarter, cloud revenue jumped 27% to €4.71 billion, with cloud gross margin improving by 1.3 percentage points to 73.5%. Total revenue increased 11% year-over-year to €9.38 billion, while non-IFRS operating profit grew 24% to €2.44 billion.

SAP’s free cash flow for 2024 came in at €4.1 billion, down 19% from 2023, due to higher restructuring payouts. However, the company anticipates free cash flow will nearly double in 2025 to approximately €8 billion.

New York-listed SAP shares closed largely flat in extended trading before the results.