SAP delivered a strong Q4 and a raise to 2025 growth and profit guidance, but ultimately this was met with a muted reaction due to a noisy FCF outlook, highlighting how high the bar was set. SAP sees strong end to 2024 with top- and bottom-line beats Q4''24 highlights were the +29% Current Cloud Backlog (CCB) growth above the targeted +27% and buyside expectations 27-28%, demonstrating a solid end to the year closing deal pipeline. Cloud ERP growth sustained its mid-30s growth rate in H2, also paving the way for a strong 2025 growth outlook. Q4 adj. EBIT beat Consensus by 8%, in line with BNPP estimates. But market ignores Cloud Revenue guide raise as ''noisy'' FCF outlook disappoints We had anticipated a raise to the 2025 EBIT guidance, delivered to the tune of 4% at the high end confirming 30% earnings growth (EUR) is targeted for 2025. The Cloud Revenue growth raise was not expected (to 26-28% growth or EUR21.6-21.9bn ccy) and was a key positive. This was offset by an unchanged EUR8bn FCF guidance which appears to imply softer cash conversion vs. 2024 given the higher EBIT guide. We worked through the numbers and see potential upside to that EUR8bn (detail within) assuming stable underlying cash conversion adjusted for one-offs. Some debate on the ''Extended extended'' maintenance was also present, with mixed sentiment among investors. Looking through the noise to better growth outlook and EPS upgrades. Reiterate Top Pick. SAP has had quite the run, and the bar moved ever higher with each turn of the share price and valuation multiple. The shares swung as much as (5)% intra-day before closing broadly flat, in line vs. SX8E. When the dust settles, we see near-term EPS upgrades, continued execution and significant mid-term upside to Consensus driving the shares from here. SAP is a rare Global GenAI winner without compute capex risk, with a product upgrade cycle and margin expansion story in full swing. We continue to expect the shares to outperform and...