Shares of Newcastle-based software giant Sage Group rose 4.3% on Wednesday after the firm issued a trading update for the three months ended December 31, 2019, showing total group revenue increased 6.7% to £465 million.

Sage also reiterated its guidance for the full year. The company’s shares rose 4.3% to around 765p to give the firm a current stock market value of around £8 billion.

“Group recurring revenue increased by 10.7% to £410m, underpinned by software subscription growth of 24.8% to £286m (Q1 19: £229m), as Sage continued to focus on migrating existing customers and attracting new customers to subscription and the cloud,” said Sage.

“Recurring revenue growth was driven principally by North America and Northern Europe (UK & Ireland), with strong momentum from FY19 carried forward into the first quarter.

“In North America, recurring revenue grew by 11.8% to £154m (Q1 19: £137m), driven by cloud connected solutions and a good performance from Sage Intacct.

“Northern Europe continued to grow strongly with recurring revenue growth of 15.1% to £93m (Q1 19: £80m), benefitting from strong growth in the second half of FY19 as well as new Sage 50 cloud connected contracts added in the quarter.

“In terms of the portfolio view of revenue, the Future Sage Business Cloud Opportunity (products within, or to be migrated to, Sage Business Cloud) delivered recurring revenue growth of 12.7% to £362m, offset by a slight decrease in recurring revenue of 2.5% to £48m in products with no current path to Sage Business Cloud.

“Other revenue (SSRS and processing) declined by 15.8% to £55m, in line with our expectations for the quarter, reflecting the managed decline in licence sales and de-prioritisation of professional services revenue as the business continues to focus on subscription.”

Sage chief financial officer Jonathan Howell said: “Sage had a strong first quarter as expected.

“We have sustained last year’s growth momentum into the first quarter of FY20, as we continue to focus on driving recurring revenue through the transition to cloud-based subscription services, in line with our vision to become a great SaaS company.

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