Shares of Newcastle-based software giant Sage Group, the UK’s largest listed tech company, rose 7% on Thursday after it said its revenue increased 4.1% to just under £1.4 billion in the first nine months of the year, and by 1.1% to £460 million in the third quarter.

Sage said its recurring revenue for the first nine months of the year increased 9% to £1.2 billion.

In a trading update for the nine months ended June 30, 2020, Sage said the performance was underpinned by software subscription growth of 22.6% to £885 million as Sage “continued to focus on migrating existing customers and attracting new customers to Sage Business Cloud.”

Recurring revenue growth was driven principally by North America and Northern Europe (UK and Ireland).

“In the third quarter, recurring revenue grew by 6.5% to £421m (Q3 19: £395m), reflecting a resilient performance against the background of more challenging trading conditions due to COVID-19,” said Sage.

“While this led to a reduction in new customer acquisition and a slight increase in customer churn, our trading performance gradually improved as the quarter progressed.”

In its outlook, Sage said: “Given the group’s resilient performance in the third quarter, we now expect recurring revenue growth for FY20 to be in the region of 7% to 8%, with the decline seen in the third quarter in other revenue (SSRS and processing) expected to continue for the remainder of the year.

“Reflecting the overall performance of the business, organic operating margin is expected to be around 22% for the current financial year.

“Going forward we remain cautious, given the continuing economic uncertainties and the risks to our small and medium business customers as government support schemes come to an end.”

Sage chief financial officer Jonathan Howell said: “Sage has achieved good results in the first nine months, continuing to deliver against our strategy, in line with our vision to become a great SaaS company.

“Despite the disruption caused by COVID-19, our colleagues have performed exceptionally, providing strong support both to each other and to our customers.

“We are confident that our sustained investment in Sage Business Cloud throughout the economic cycle will form a strong base for the long-term success of Sage.”