Newcastle’s Sage reports Q1 revenue up 10% to £612m

Sage HQ in Newcastle

Sage Group plc, the Newcastle-based FTSE 100 global software business, said its total revenue increased by 10% to £612 million in its first quarter, with all regions contributing to growth.

Sage sells accounting, finance, HR and payroll technology for small and medium-sized businesses.

In a trading update for the three months ended 31 December 2024, Sage said: “In North America, revenue increased by 11% to £279m, with a good performance from Sage Intacct together with continued growth in Sage 50 and Sage 200.

“In the UKIA region, revenue grew by 9% to £176m, driven by Sage Intacct together with cloud solutions for small businesses (including Sage Accounting and Sage Payroll), alongside further growth in Sage 50 and Sage 200. In Europe, revenue increased by 8% to £157m, with a strong performance across our accounting, HR and payroll solutions.

“Sage Business Cloud revenue increased by 13% to £502m, driven by balanced growth from both new and existing customers, including cloud native revenue growth of 22% to £208m (Q1 24: £170m).

“Recurring revenue grew by 10% to £595m (Q1 24: £540m), reflecting continued momentum in Annualised Recurring Revenue (ARR) during the quarter. Software subscription revenue grew by 12% to £509m (Q1 24: £455m) resulting in subscription penetration of 83% (Q1 24: 82%).

“On an organic basis (excluding the impact of M&A), total revenue increased by 9% to £611m (Q1 24: £560m), while recurring revenue increased by 10% to £594m (Q1 24: £542m) …

“Sterling strengthened against the US dollar and other international currencies compared with the prior period, leading to an exchange rate headwind.”

Sage Chief Financial Officer Jonathan Howell said: “Sage has made a strong start to the year, achieving broad-based revenue growth in line with expectations, despite the ongoing macroeconomic uncertainty.

“We’re innovating across our platform to deliver productivity and insights to small and mid-sized businesses, transforming their workflows through our products and AI-powered solutions.

“We reiterate our guidance for the full year, as set out in our FY24 results announcement, as we continue to focus on efficiently scaling the Group.”