Sage Group, the Newcastle-based accounting software giant for SMEs, said its revenue increased 6% to £1.412 billion in the nine months ended June 30, 2022, and by 7% to £488 million in the third quarter.

Sage said recurring revenue for the first nine months of its financial year increased 9% to £1.330 billion, driven by a 20% rise in Sage Business Cloud revenue to £886 million.

Software subscription revenue grew 14% to £1.051 billion.

“Regionally, North America achieved recurring revenue growth of 13% to £557m (Q3 21 YTD: £493m), with a strong performance from Sage Intacct alongside growth in cloud connected products,” said the Newcastle firm.

“In Northern Europe recurring revenue grew by 7% to £311m (Q3 21 YTD: £291m), driven by continued success in cloud native solutions including Sage Accounting, Sage Intacct and Sage HR, supported by growth in Sage 50 cloud connected.

“In International, recurring revenue increased by 5% to £462m (Q3 21 YTD: £439m), with growth across the Sage Business Cloud portfolio. 

“In terms of the portfolio view of recurring revenue, the Future Sage Business Cloud Opportunity (products within, or to be migrated to, Sage Business Cloud) increased by 11% to £1,226m.

“This was driven by strong growth in cloud native recurring revenue of 42% to £297m (Q3 21 YTD: £209m) primarily through new customer acquisition, together with further growth in the cloud connected portfolio supported by progress in migrations.

“Sage Business Cloud penetration increased to 72% (Q3 21: 67%).”

In its outlook, Sage said: “Following a strong performance in the third quarter, we now expect organic recurring revenue growth for FY22 to be towards the top end of our guidance range of 8% to 9%.

“The group’s guidance across other metrics remains unchanged.”

Sage chief financial officer Jonathan Howell said: “Sage has performed strongly in the first nine months of the year, with momentum continuing to build, as more businesses choose Sage Business Cloud solutions to support their digital transformation. 

“As a result, we now expect organic recurring revenue growth for FY22 to be towards the top end of our guidance range of 8% to 9%. 

“While we are mindful of broader macroeconomic trends, I am confident that continued delivery against our strategic priorities will ensure Sage remains well-positioned for the future.”