Ben Bernaus

Ben Bernaus sought to reconcile positive indicators like large deals, sovereign cloud opportunities, and record Total Cloud Backlog (TCB) with the 25% TCV growth in Q4 and anticipated cloud revenue deceleration in 2026. He asked for insights into the midterm trajectory of total cloud revenue growth into 2027 and beyond.

Answer

CEO Christian Klein explained that the Q4 deal mix shifted to larger deals with longer ramp periods, moving revenue out of the first 12 months but benefiting mid-to-long-term cloud revenue. He expects a similar pattern in 2026 for Q1-Q3. CFO Dominik Asam noted the high accuracy of cloud revenue forecasts and that the transactional dilutive effect on CCB will be smaller in 2026, providing more confidence in future revenue.

Ben Bernaus asked for clarification on how to reconcile the numerous positive indicators, such as large deals, sovereign cloud opportunities, high AI inclusion in the backlog, and record Total Cloud Backlog (TCB), with the 25% CCB growth in Q4 and the anticipated deceleration in cloud revenues for the upcoming year. He sought insight into the midterm trajectory of total cloud revenue growth into 2027 and beyond.

Answer

CEO Christian Klein acknowledged that the Q4 deal mix, with a higher share of larger deals, led to more revenue shifting from the first 12 months to later years, which is a natural part of large-scale transformations. He indicated that a similar pattern of large deals impacting CCB phasing might continue, but emphasized that the stable contract duration and lower churn contribute to long-term cloud revenue and profit growth. CFO Dominik Asam highlighted that the TCB minus CCB ratio is increasing, providing more visibility into outer years, and that the transactional dilutive effect on CCB is becoming smaller, suggesting a stabilization of cloud revenue growth.