The Sage Group (SGE) H1 2025 earnings summary

Executive summary

• Achieved strong first-half and H1 2025 results with stable, broad-based growth and significant margin expansion, driven by accounting, HR, payroll solutions, and disciplined cost control.

• Sage Copilot, the AI-powered productivity tool, is scaling rapidly and delivering productivity gains across the UK, US, and Europe.

• Resilient performance amid volatile macroeconomic conditions, underpinned by a subscription-based model, digital adoption, and secular growth drivers.

• Strategic progress and innovation position the company well for future market opportunities.

Financial highlights

• Underlying total revenue rose 9% year-over-year to £1,242m; recurring revenue up 10% to £1,203m.

• Operating profit increased 16% to £288m, with margin up 140bps to 23.2%.

• Basic EPS up 17% to 20.8p; profit after tax up 15% to £206m.

• Underlying EBITDA grew 14% to £334m, margin up to 26.9%.

• Cash conversion at 115%, with free cash flow of £246m and strong liquidity of £1.2bn.

Outlook and guidance

• Organic total revenue growth for FY2025 expected at 9% or above, with operating margins trending upwards.

• Guidance remains realistic but cautious due to macroeconomic uncertainty; strong sales pipeline and product investments support confidence.