SAP sweetens shareholder returns with dividend hike

Walldorf-based SAP (NYSE:SAP) today proposed a 6.4 percent increase to its annual dividend, signaling management’s confidence in the company’s pivot to the cloud after a fiscal year defined by record backlogs and a massive bet on generative AI.

The software giant’s executive and supervisory boards recommended a payout of €2.50 per share for fiscal 2025, up from €2.35 in the prior year.

If approved at the annual general meeting, SAP will distribute approximately €2.92 billion to shareholders.

The payout ratio stands at 40.7 percent of non-IFRS profit, consistent with the firm’s policy of returning at least 40 percent of adjusted earnings to investors.

The dividend hike comes on the heels of a transformative year for SAP.

In its late-January earnings release, the company reported that its total cloud backlog surged 30 percent to a record €77 billion, driven by the rapid adoption of its "Rise with SAP" and "Grow with SAP" programs.

While a slight shift in deal timing in the fourth quarter caused some short-term share price volatility, the firm exceeded its full-year 2025 free cash flow targets, reaching €8.2 billion.