Sage Group backs full-year outlook as cloud growth drives sales higher
Sage Group PLC on Wednesday said demand remains strong as it reported double-digit revenue growth driven by Sage Business Cloud.
In a trading update, the Newcastle upon Tyne, England-based accountancy software provider said revenue grew 11% to £2.06 billion in the nine-months ended June 30 from £1.86 billion a year prior.
Sage Business Cloud revenue increased 15% higher to £1.76 billion, supported by the continued adoption of Sage's cloud solutions and expansion of AI-powered capabilities across the portfolio.
Group organic revenue growth was 10%, with 14% at Sage Business Cloud.
By region, revenue rose 14% in North America, by 10% in the UK & Ireland, and 7% in Europe.
Recurring revenue grew by 11% reflecting continued momentum in annualised recurring revenue during the period. Software subscription revenue grew by 13% resulting in subscription penetration of 84%, up on-year from 83%.
In the third quarter of its financial year, total revenue increased by 12% to £699 million from £627 million, driven by continuing growth across Sage Business Cloud.
For the financial year which ends on September 30, Sage continues to expect organic total revenue growth to be above 9%, and operating margins to trend upwards.
Chief Financial Officer Jacqui Cartin said: "Demand from new and existing customers remains strong, with small and mid-sized businesses increasingly relying on Sage for finance, HR and payroll workflows, where getting it right is essential. This gives us confidence in delivering sustainable, efficient growth, and we reiterate our guidance for the full year."
Shares in Sage rose 3.9% to 976.00 pence each in London on Wednesday.
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