SAP shares soared following the German software giant's announcement that its artificial intelligence-driven restructuring will lead to an additional €200 million in profits and result in more job cuts than initially anticipated.

The company, headquartered in Weinheim, Germany, initially outlined a comprehensive restructuring plan in January, projecting that around 8,000 employees would be affected at a cost of €2 billion ($2.2 billion). However, SAP now expects the restructuring to impact 9,000 to 10,000 jobs, with costs rising to approximately €3 billion.

SAP, Europe’s second-largest tech company after ASML, saw its shares on the Frankfurt Stock Exchange climb 6% on Tuesday, building on a 40% year-to-date increase. Meanwhile, SAP's New York-listed shares gained 4% in after-hours trading on Monday, having risen 30% so far this year.

The company, known for developing database software for major U.S. firms like Apple, Pfizer, and ExxonMobil, stated that the expanded restructuring plan is expected to enhance profits by approximately €200 million by 2025. SAP now forecasts profits of €10.2 billion in 2025, up from its previous estimate of €10 billion.

SAP emphasized that most of the job reductions will occur through voluntary leave programs and internal re-skilling initiatives.

In its second-quarter results, SAP reported a 10% increase in revenue, reaching €8.29 billion, slightly surpassing analysts' expectations of €8.25 billion, according to FactSet. The company’s net income for the quarter came in at €1.28 billion, exceeding the €1.22 billion forecasted by analysts.

Deutsche Bank analyst Johannes Schaller noted that SAP achieved double-digit organic revenue growth for the first time in five years, driven by agreements with companies such as ExxonMobil, ADP, Accenture, BASF, and Lenovo. Schaller added, "We believe SAP is still in the early stages of its 'harvest phase' following three years of substantial investments."