Sage Q1 revenue hits £465m as subscriptions boom

Sage Group CEO Steve Hare

Newcastle-based software giant Sage Group, the UK’s largest listed tech company, said on Thursday its group “organic” revenue increased 7.6% to £465 million for the first three months of its year as it continues to focus on subscriptions.

Sage shares rose 6% on the news.

In a trading update for the three months to December 31, 2018, Sage said “recurring” revenue increased 10.5% to £387 million, underpinned by software subscription growth of 27.7 % to £237 million.

“Software and software related services (SSRS) revenue declined by 5.8% to £65m reflecting the managed decline in licences as the business transitions to subscription, offset by a slight increase in services,” said Sage.

“Organic revenue growth of 7.6% reflects growth in products within, or to be migrated to, Sage Business Cloud of 9.3% to £380m and a slight increase of 0.6% to £85m in products with no current path to Sage Business Cloud. 

“Regionally, North America delivered revenue growth of 10.4% to £154m, with double digit recurring revenue driven by cloud connected solutions and Sage Intacct.

“The UKI showed strong signs of recovery with revenue growth of 5.9% to £96m and double digit recurring revenue growth driven by Sage 50 cloud connected migrations.

“In France, revenue growth of 5.8% to £69m reflects continuing recovery in recurring revenue, driven by Sage 200 cloud connected.

“Performance in other regions was largely in line with expectations.”

Sage CEO Steve Hare said: “We have been encouraged by the strong start to FY19, reflecting the renewed focus on high-quality subscription and recurring revenue as we continue the journey to becoming a great SaaS business.

“Looking ahead we reiterate our full year guidance for FY19 as outlined at the FY18 results announcement.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.